Crypto Chronicle - 20/02/24

Welcome to the 26th edition of the Crypto Chronicle, brought to you by Imperial Wealth.

You can listen to todays episode here.

News

Gold ETFs See Outflow of $2.4 Billion in 2024, While Bitcoin ETFs Achieve Record Volumes

In 2024, gold-focused ETFs experienced substantial outflows of $2.4 billion, contrasting with Bitcoin ETFs, which recorded inflows of $3.89 billion and set record volumes since their January 11 launch.

Notably, only three gold ETFs saw minor inflows, while BlackRock’s iShares Gold Trust Micro and iShares Gold Trust faced significant outflows.

Bitcoin’s surge of 23.5% to $52,483 heightened the divergence as gold dropped 3.4% to $1,993 per ounce.

Despite initial expectations, gold’s lacklustre performance was attributed to global ETF outflows, speculative reductions, and challenges from long-term Treasuries and the strong US dollar.

The ongoing Bitcoin-gold comparison centres on their roles as stores of value amid economic uncertainty.

Read more here: https://imperialwealth.com/news/gold-etfs-see-outflow-of-2-4-billion-in-2024-while-bitcoin-etfs-achieve-record-volumes

Staked Ether Deposits Reach $85 Billion, 25% of Circulating Supply Currently Locked

The Beacon Chain’s staked Ether exceeds 30 million, valued at $85 billion, locking up 25% of the circulating supply. With 943,974 active validators, February saw a bullish trend as 600,000 Ether entered Ethereum 2.0 staking contracts, coinciding with ETH reaching yearly highs above $2,800; it currently trades at $2,774.

Ethereum’s proof-of-stake (PoS) network, introduced via the Beacon Chain in 2022, enjoys increased security and efficiency, with stakers receiving a 4% annualised rewards rate.

Post-Shanghai upgrade in April 2023, over 900,000 validators emerged, surpassing expectations, and as ETH nears $3,000, focus shifts to potential spot Ether ETFs, awaiting SEC approval.

Read more here: https://imperialwealth.com/news/staked-ether-deposits-reach-85-billion-25-of-circulating-supply-currently-locked

Major Banks Seek SEC Approval for Inclusion in the Bitcoin ETF Market

Major US banks and financial institutions are urging the SEC to broaden their role in the cryptocurrency space, including acting as custodians for newly approved spot Bitcoin ETFs.

In a letter to SEC Chair Gary Gensler, a coalition of trade groups highlighted the absence of US banks as approved asset custodians for recently sanctioned spot Bitcoin ETFs.

They urged the SEC to review crypto asset definitions and amend guidance on accounting for custody-related obligations.

The coalition seeks an exemption for banks from on-balance sheet requirements and aims for clearer guidelines, reflecting banks’ interest in the evolving digital finance landscape.

Read more here: https://imperialwealth.com/news/major-banks-seek-sec-approval-for-inclusion-in-the-bitcoin-etf-market

Inclusion of MicroStrategy in the S&P 500 Index may introduce Bitcoin to millions

MicroStrategy, a major Bitcoin holder, is nearing eligibility for inclusion in the S&P 500, potentially opening doors for Bitcoin exposure in numerous portfolios.

Despite needing to meet strict criteria and increase market capitalisation, recent data shows MicroStrategy’s climb to the 535th position in the largest publicly-listed US companies.

To join the S&P 500, it must meet criteria like a minimum market cap of $15.8 billion.

If successful, it could lead to significant automatic buying and positive feedback in ETF portfolios.

Presently holding 190,000 BTC, MicroStrategy has gained $3.9 billion on its investment, coinciding with its shift to a “Bitcoin development firm.”

Read more here: https://imperialwealth.com/news/https-imperialwealth-com-news-inclusion-of-microstrategy-in-the-sp-500-index-may-introduce-bitcoin-to-millions

Australian Police Officer Allegedly Involved in the Theft of 81 Bitcoin During a Raid

The National Anti-Corruption Commission (NACC) in Australia accuses a federal police officer, William Wheatley, of erasing data from a Trezor wallet with 81.62 Bitcoin during a drug raid.

Authorities allege he transferred the Bitcoin for personal gain. The wallet’s worth has surged from $309,000 in 2019 to approximately $4.2 million. 

Detective Sergeant Deon Achtypis suspects Wheatley after finding a device with the wallet’s seed phrase. Global enforcement agencies are increasingly using crypto-tracing software.

Canadian law enforcement adopted Chainalysis Reactor software in August 2023.

Despite charges, Wheatley maintains innocence amid a reported security breach affecting 66,000 Trezor users.

Read more here: https://imperialwealth.com/news/australian-police-officer-allegedly-involved-in-the-theft-of-81-bitcoin-during-a-raid

Technical Analysis

Bitcoin was $50k last week, we are $52k this week.

Steady lads.

We have now reached our first line of daily resistance after breaking the major .618 retracement (Golden Pocket).

Please see the chart below:

For now, we have flipped the Golden Pocket to support and rejecting from flipping the $52k level of our first daily candle high, to support.

As noted on the chart in the speech bubble, I expect BTC to see at least $57k, or begin to range between $48-$57k before the halving.

If we ranged, this would give a good chance for ETH and alts to catch up, but isn’t the end of the world if we do see a pullback.

The mistake most people made is they think currently, even now, that they’re too late.

They’re not – particularly for alts.

Please see the chart below:

Please see the chart below:

The first chart is the TOTAL 2 – Excluding BTC – THIS IS STILL DOWN -47%!

That means comparable to last cycle, we are only halfway back. But this is only to last cycle market capitalisation – not the new cycle, which could be much much larger too!

Similarly on the TOTAL 3 – Excluding BTC & ETH, this is still down over -50%! Same notion here.

In the last Cycle whenBTC hit near peak all-time-highs of 57,000 to 59,000 in Feb/March 2021, there was subsequently 266 GLORIOUS days of altcoin season, with alts and BTC both climaxing in Nov 2021.

You are early!