Grayscale Drops Bombshell Report: Crypto Bull Run Progresses To ‘Middle’ Phase, Future Outlook Detailed
02 Abril 2024 - 10:00PM
NEWSBTC
The cryptocurrency market has witnessed a significant surge after a
prolonged bear market and the intensified crypto winter caused by
the collapse of crypto exchanges and firms during 2022 and part of
2023. Notably, Bitcoin and other major cryptocurrencies have
experienced substantial price surges, accompanied by renewed
interest from institutional investors entering the market through
recently approved spot Bitcoin exchange-traded funds (ETFs).
Adding to the industry’s positive outlook, asset manager and
Bitcoin ETF issuer, Grayscale, believes that the current state of
the market indicates that the industry is in the “middle” stages of
a crypto bull run. Grayscale recently released a
comprehensive report detailing their key findings and insights into
what lies ahead. A closer analysis of the report by market expert
Miles Deutscher sheds light on the factors contributing to this
assessment. Related Reading: Dogecoin Hits Major Roadblock As
Whales Go On Massive Selling Spree On-Chain Metrics And
Institutional Demand Grayscale’s report starts by highlighting
several key signals indicating that the market is currently in the
middle of a bull run. These include Bitcoin’s price surpassing its
all-time high before the Halving event, the total crypto market cap
reaching its previous peak, and the growing attention from
traditional finance (TradFi) towards meme coins. To understand how
long this rally might sustain, Grayscale emphasizes two specific
price drivers: spot Bitcoin ETF inflows and strong on-chain
fundamentals. Grayscale notes that nearly $12 billion has flowed
into Bitcoin ETFs in just three months, indicating significant
“pent-up” retail demand. Moreover, ETF inflows have consistently
exceeded BTC issuance, creating upward price pressure due to the
demand-supply imbalance. Grayscale’s research focuses on three
critical on-chain metrics: stablecoin inflows, decentralized
finance (DeFi) total value locked (TVL), and BTC outflows from
exchanges. According to Deutscher, the increase in stablecoin
supply on centralized exchanges (CEXs) and decentralized exchanges
(DEXs) by approximately 6% between February and March suggests
enhanced liquidity, making more capital readily available for
trading. Furthermore, for the analyst, the doubling of the total
value locked into DeFi since 2023 represents growing user
engagement, increased liquidity, and improved user experience
within the DeFi ecosystem. The outflows from exchanges, which
currently account for about 12% of BTC’s circulating supply (the
lowest in five years), indicate rising investor confidence in BTC’s
value and a preference for holding rather than selling. Based on
these catalysts, Grayscale asserts that the market is in the
“mid-phase” of the bull run, likening it to the “5th inning” in
baseball. Promising Outlook For Crypto Industry Several key
metrics support Grayscale’s analysis, including the Net Unrealized
Profit/Loss (NUPL) ratio, which indicates that investors who bought
BTC at lower prices continue to hold despite rising prices.
According to Deutscher, the Market Value Realized Value (MVRV)
Z-Score, currently at 3, implies that there is still room for
growth in this cycle. Additionally, the ColinTalksCrypto Bitcoin
Bull Run Index (CBBI), which integrates multiple ratios, currently
stands at 79/100, suggesting that the market is approaching
historical cycle peaks with some upward momentum remaining.
Related Reading: Ethereum And Altcoins Crash: Why Is This Analyst
Super Bullish? Furthermore, retail interest has yet to fully return
this cycle, as evidenced by lower cryptocurrency YouTube
subscription rates and reduced Google Trends interest for “crypto”
compared to the previous cycle. Ultimately, Grayscale retains a
“cautiously optimistic” stance regarding the future of this bull
cycle, given the promising signals and analysis outlined in their
report. Featured image from Shutterstock, chart from
TradingView.com
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