Newsletter Volume 68
THE MARKET THIS WEEK
The resurgence of interest in Tesla’s Bitcoin holdings has drawn attention within the cryptocurrency community following the integration of a Bitcoin wallet tracking feature by Arkham Intelligence. Tesla’s wallet now holds approximately 11,509 BTC, a significant increase from the 9,720 BTC reported during its last earnings report. This uptick in holdings suggests continued bullish sentiment towards Bitcoin from Tesla, a major player in both the automotive and cryptocurrency industries.
Pantera Capital, a prominent crypto-focused asset management firm, has initiated fundraising efforts for the Pantera Solana Fund. The fund aims to purchase up to $250 million worth of Solana (SOL) tokens from the estate of the bankrupt FTX exchange. This move underscores the growing interest in Solana, a blockchain platform known for its high throughput and low transaction fees, among institutional investors seeking exposure to promising cryptocurrency projects.
In regulatory news, the Philippines National Telecommunications Commission (NTC) has taken action against crypto companies offering investment products without the necessary licenses. The NTC has begun blocking websites of such firms, including MiTrade and OctaFX, following an order issued on Feb. 21. This crackdown reflects ongoing efforts by Philippine regulators, particularly the Securities and Exchange Commission (SEC), to enforce regulations and protect investors in the rapidly evolving crypto market.
London-based fintech firm Revolut has announced a new integration allowing customers in the United Kingdom and the European Economic Area (EEA) to make direct cryptocurrency purchases on MetaMask. This integration enables Revolut’s clients to use fiat currency balances, debit, and credit cards to buy new tokens directly into their MetaMask wallets. With over 40 million users, Revolut’s move to facilitate cryptocurrency transactions reflects the increasing mainstream adoption of digital assets and decentralized finance (DeFi) tools.
Sentix, an AI-powered crypto market tool, offers traders the ability to sift through the noise of daily news, separating FOMO from fact by analyzing media sentiment and its impact on crypto asset prices. As an ecosystem moved by investor sentiment, the crypto space is heavily influenced by media, especially news revolving around regulatory actions, legal updates, or major partnerships. This underscores the importance of tools like Sentix in helping traders navigate the volatile and dynamic cryptocurrency market.
KEY METRICS
Total Crypto Market Cap : $2.69 T
Bitcoin Market Cap : $1.32 T
Ethereum Market Cap : $474.98 B
ETH/BTC Ratio : 0.06
Ethereum Gas Price : 66 gwei
DeFi TVL : $158.49 B
Fear and Greed Index : 81 (Extreme Greed)
Federal Reserve Balance Sheet : $7.63 T
Weekly Spotlight on IC15
The digital currency markets exhibited resilience and upward momentum, with the IC15 Index rising by 3,668 points to reach 82,670 by 4 p.m. Dogecoin, Shiba Inu, and Polkadot led the gains, with increases ranging from 9% to 19%, while Litecoin was the only coin to experience a minor loss of 0.14%. Despite fluctuations, the market showed strength amid regulatory developments and institutional inflows.
Regulatory activity was notable, particularly in the United States and the United Kingdom. US Senators, led by Cruz, introduced the CBDC Anti-Surveillance State Act, challenging President Biden’s efforts to implement a central bank digital currency (CBDC). Meanwhile, the UK strengthened its crypto policing with the implementation of the Financial Crime and Corporate Transparency Bill, scheduled to take effect in April. In Indonesia, where crypto tax revenues have faced challenges, there are proactive considerations for tax policy amendments to promote enhanced compliance.
Bitcoin continued to dominate non-fungible token (NFT) sales, recording significant gains, closely followed by Ethereum. This market activity was mirrored in venture capital investment surges, particularly in crypto startups, indicating growing investor confidence and a promising trajectory for the industry. Institutional inflows and the anticipation of upcoming halving events contributed to the continued rally in the global cryptocurrency market.
However, the market experienced a decline after reaching all-time highs, attributed to profit booking activities. The IC15 Index was down 188 points to 85,477 at 4 p.m., with major losses seen in coins like Shiba Inu, Dogecoin, Polygon, and Cardano, while Ethereum and BNB were among the few gainers. Despite setbacks, ongoing regulatory discussions and infrastructure developments, particularly in countries like China, suggest continued evolution and potential growth in the cryptocurrency landscape.
BATTLE OF THE BULL AND BEAR
The recent surge in Bitcoin’s price has coincided with a decrease in accumulation, indicating a potential shift in the market dynamics. Data from Glassnode suggests that Bitcoin is emerging from a prolonged accumulation phase that began at the end of the 2022 bear market. The decline in Bitcoin held in accumulation addresses, which are wallets with no outgoing transactions and at least two inbound transactions, marks a departure from the trend observed since the first quarter of 2023. This reduction in accumulation comes as Bitcoin reaches all-time highs, suggesting that long-term hodlers are now capitalizing on profits.
Since February 11, there has been a noticeable decline in the balances of aggregator wallets, which have fallen by 2.6% to 3,176,293 BTC. Despite this decrease, these wallets have historically been accumulating coins during price dips and only started selling at the beginning, rather than the end, of upward price movements. This broader trend of accumulation has been observed since mid-2018, contrasting sharply with the significant decrease observed prior to that, coinciding with Bitcoin’s rush to its previous all-time high of $20,000 in 2017.
The recent approval of spot Bitcoin exchange-traded funds (ETFs) in the US has had a significant impact on supply dynamics. Timothy Peterson, a leader and investment manager at Cane Island Alternative Advisors, suggests that the demand generated by ETFs could propel Bitcoin to six figures as early as 2024. Peterson’s analysis compares unspent transaction output (UTXO) numbers to Bitcoin’s price performance, noting a daily growth rate of 0.34%.
In El Salvador, the government’s adoption of Bitcoin as legal tender has resulted in substantial profits. The government, led by President Nayib Bukele, has purchased approximately 2,380 BTC since announcing plans to buy 1 BTC every day. With Bitcoin’s recent all-time high, El Salvador’s Bitcoin holdings are now valued at over $150 million, representing a 53% increase from their initial cost basis. Bukele has defended the government’s Bitcoin strategy, emphasizing the potential gains and the positive impact on the country’s economy.
Despite criticism and skepticism from traditional media outlets, El Salvador remains committed to its “Bitcoin standard.” Samson Mow, CEO of Jan3, believes that nation-states will continue to embrace Bitcoin, alongside corporations and institutional buyers. As Bitcoin’s price continues to rise, there is increasing interest from various stakeholders, including retail investors, signaling growing confidence in the long-term viability of cryptocurrency adoption at the national level.
Weekly Spotlight
The cryptocurrency community has been abuzz with renewed interest in Tesla’s Bitcoin holdings, which have surged to approximately 11,509 BTC from 9,720 BTC reported previously. This increase, coupled with the integration of a Bitcoin wallet tracking feature by Arkham Intelligence, indicates Tesla’s sustained bullish sentiment towards Bitcoin. Concurrently, Pantera Capital’s fundraising efforts for the Pantera Solana Fund highlight the growing institutional interest in Solana (SOL), known for its high throughput and low transaction fees. Meanwhile, regulatory actions by the Philippines National Telecommunications Commission against unlicensed crypto investment firms underscore ongoing efforts to protect investors in the rapidly evolving crypto market. London-based fintech firm Revolut’s integration with MetaMask further demonstrates the increasing mainstream adoption of digital assets, allowing users in the UK and the EEA to make direct cryptocurrency purchases.
Bitcoin’s recent price surge has coincided with a decline in accumulation, signaling a potential shift in market dynamics. Glassnode data indicates a departure from the accumulation trend observed since early 2023, as Bitcoin reaches all-time highs. The reduction in accumulation addresses, alongside a decline in aggregator wallet balances, suggests that long-term hodlers are capitalizing on profits. The recent approval of spot Bitcoin exchange-traded funds (ETFs) in the US is expected to impact supply dynamics, potentially driving Bitcoin to six figures by 2024, according to Timothy Peterson. Additionally, El Salvador’s adoption of Bitcoin as legal tender has resulted in significant profits, with the government holding over 2,380 BTC valued at over $150 million, despite criticism from traditional media outlets.
In the digital currency markets, resilience and upward momentum have been evident, with the IC15 Index rising by 3,668 points to reach 82,670 by 4 p.m. Notable gains were led by Dogecoin, Shiba Inu, and Polkadot, while Litecoin experienced a minor loss. Regulatory developments, particularly in the US and UK, have been significant, with the introduction of the CBDC Anti-Surveillance State Act challenging President Biden’s CBDC efforts and the UK’s implementation of the Financial Crime and Corporate Transparency Bill. Meanwhile, Indonesia considers tax policy amendments to enhance compliance. Despite a market decline after reaching all-time highs, ongoing regulatory discussions and infrastructure developments suggest potential growth in the cryptocurrency landscape, fueled by institutional inflows and venture capital investments.
