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⚡Bitcoin's Path to Growth🎑

Croxroad

26 Oct 2023 — 4 min read

☕️ GM Dear Plebs!

Here is Crox Road, your daily dose of orange pill that will turn you into a Bitcoin Maxi.

The menu for today:

🌠 Bitcoin's Potential 74% Upswing After ETF

Galaxy Digital, an investment firm, has made an interesting projection about Bitcoin's future. They believe that once Bitcoin exchange-traded funds (ETFs) are introduced in the United States, the price of Bitcoin, currently at $34,508, could surge by a substantial 74.1% in the first year. This estimate is based on the idea that the total market for Bitcoin ETFs would be around $14.4 trillion in the first year post-launch. They arrived at the 74% increase by analysing how money flowing into Bitcoin ETFs could affect its price, drawing a comparison to the impact of gold ETFs. According to their calculations, Bitcoin's price might rise by 6.2% in the first month after an ETF's launch and then gradually stabilise at a 3.7% monthly increase by the end of the first year. It's an optimistic outlook for Bitcoin enthusiasts.

Markus Thielen, the head of research at Matrixport, a digital asset financial services company, has also come up with a comparable estimate. In an October 19th update, he suggested that if BlackRock's application for a spot Bitcoin ETF gets the green light, Bitcoin's price could potentially climb to a range between $42,000 and $56,000. Charles Yu, on the other hand, foresees a substantial growth in the market for U.S. Bitcoin ETFs, projecting it to reach $26.5 trillion in the second year following the launch and a whopping $39.6 trillion by the third year. These projections indicate a potentially exciting future for Bitcoin and the ETF market.

Charles Yu recognized that the approval, delay, or denial of spot Bitcoin ETFs could have a significant impact on their price predictions. However, he also noted that their estimates are relatively conservative and do not account for the potential "second-order effects" that might arise from the approval of a spot Bitcoin ETF. Yu is optimistic about the near-term outlook, expecting other global markets to follow the U.S. in approving and offering similar Bitcoin ETF options to a broader investor base. He pointed out that 2024 holds the potential to be a pivotal year for Bitcoin, driven by factors such as ETF inflows, the upcoming April 2024 Bitcoin halving, and the possibility that interest rates have either peaked or are close to peaking in the near future. All these factors combined suggest an exciting period ahead for Bitcoin enthusiasts and investors.

🫶 MicroStrategy's Bitcoin Bet

MicroStrategy's investment in Bitcoin (BTC) has once again become profitable as Bitcoin's price surged towards $31,000. At the end of 2022, the company's Bitcoin holdings were in the red, largely due to Bitcoin's sharp drop of nearly 80% from its peak in November 2021. However, recent developments like the potential launch of a spot ETF and an upcoming halving event have boosted Bitcoin's value, resulting in nearly doubling its price this year. Michael Saylor, the former CEO and current executive chairman of MicroStrategy, has been a prominent advocate of Bitcoin and continues to be a prolific buyer. Notably, the company has sold its Bitcoin holdings only once, in December 2022, when they disposed of 708 Bitcoins, worth $11 million at the time. Saylor's unwavering support for Bitcoin and the company's strategic moves have contributed to their renewed profitability in the cryptocurrency market.

MicroStrategy's most recent public Bitcoin purchases occurred just before September 24 of this year when they acquired 5,445 Bitcoins for nearly $150 million, averaging about $27,053 per Bitcoin. This increased their total Bitcoin holdings to 158,245 Bitcoins, which they've acquired at an aggregate cost of approximately $4.68 billion, averaging around $29,582 per Bitcoin. With the current Bitcoin price at $30,650, MicroStrategy's Bitcoin investment is now in the green by roughly $1,000 per coin, resulting in a total gain of approximately $160 million. Notably, the company's Bitcoin holdings are significantly larger than other institutional holders, with nearly 14 times the amount held by the nearest competitor, as per data from Bitcoin Treasuries. MicroStrategy appears poised to continue its Bitcoin buying spree, as they announced plans in August to potentially raise up to $750 million by selling more stock, with intentions to use some of the proceeds for further Bitcoin acquisitions.

🪂 Hanging man

The Hanging Man is a candlestick pattern that appears at the conclusion of an uptrend and serves as a signal for a potential shift towards a bearish reversal. This pattern features a small real body located at the top of the candle, with a lower shadow that should be more than twice the size of the real body. Typically, there is little to no upper shadow in this pattern. The psychology underlying this candle formation is that, initially, prices opened, and sellers exerted downward pressure on the market. However, buyers entered the scene and attempted to push prices upward, but their efforts were unsuccessful, resulting in prices closing below the opening price. This pattern suggests a potential change in market sentiment from bullish to bearish, and it's closely watched by technical analysts to anticipate future price movements.