November/December 2023

CRYPTO CURRENTLY

Bet on Bitcoin in 2024 The crypto complex is looking up (again)

B

half of Bitcoin’s market cap sits in the hands of investors who first bought the cryptocurrency more than two years ago. Those who bought at the end of 2022 and the beginning of 2023 are sitting on gains of 100% or more and still aren’t selling. If anything, they’re buying more. It’s the type of conviction that sets a strong foundation for any market. Meanwhile, the cryptocurrency’s protocol will reduce the new supply coming into existence.

Fewer new coins

In April 2024, Bitcoin’s protocol is scheduled to begin creating half as many new bitcoins each year. The new bitcoins always go to miners, the only people who sell them all the time in all market conditions to cover their costs and make money.

lative investments, appears likely to retain the crown in 2024. In the coming year, the world’s first and still-largest crypto may not beat its 2023 return of more than 150%, but will also go above $60,000—near its previous all-time high of $70,000. Thanks to the transparency of Bitcoin’s blockchain, we can see strong holding, hoarding and accumulation patterns among investors since June 2022’s collapse of the crypto lending platforms. Look what happened during that time. Beneficial global financial conditions evaporated. The largest crypto market makers collapsed. The second-biggest crypto exchange imploded. Central banks hiked rates. And people bought more Bitcoin. The number of wallets with one or more bitcoins set record highs this year. More than

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With 50% fewer bitcoins going straight to market, investors only need to continue holding and accumulating at the same pace they already do. Bitcoin’s price will have to go up.

Wall Street’s involvement

Expect a slew of U.S.-based spot bitcoin exchange-traded funds (ETFs), including some from established brands like Fidelity (FNF), Blackrock (BLK) and Franklin Templeton (BEN). A U.S. court told regulators they can’t deny these ETFs, and a bipartisan group in Congress has demanded the Securities and Exchange Commission approve them. But spot ETFs alone won’t bring money into Bitcoin. Many Bitcoin investment funds already exist, and they’re not having a big effect. They saw only $1 billion in net global inflows for the year, as of November, according to the Coinshares research firm.

What will bring more money in?

Wall Street incentives. With ETFs, they have a reason to sell broker-dealers, advisors and their clients a low-cost, easy way to gain

Upswing

BITCOIN, THE REIGNING KING of specu-

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TRADES&TACTICS

by Mark Helfman

After a period of stabilization, Bitcoin has surged in anticipation of government approval for additional exchange-traded funds. $70K $60K

BITCOIN: U.S. TO THE REST RESERVE RATIO

1.75

—— PRICE USD

$50K

$40K

—— U.S. TO THE REST RESERVE RATIO

$30K $20K

1.5

$10K $9K $8K $7K $6K

1.25

$5K

1

$4K $3K

0.75

2019 JAN

$2K MAY

SEP

2020 JAN

MAY

SEP

2021 JAN

MAY

SEP

2022 JAN

MAY

SEP

2023 JAN

MAY

SEP

S O U R C E : Data courtesy of CryptoQuant

LU C KBOX

12/21/23 6:14 PM