Grayscale: Bitcoin bull run has only reached its mid-point

Grayscale: Bitcoin bull run has only reached its mid-point

Where exactly are we in the Bitcoin bull market? 🐂 Will it repeat the previous patterns?
Grayscale has an answer to both these questions:
1- we’re right in the middle, and
2- no, this cycle can mark the departure from the traditional dynamics.

The issuer of the first BTC fund back in 2012, the firm has published a report assessing different markers of the Bitcoin market.
We have summarized it for you 👇

➡️ Key thesis: The distinguishing factors of this cycle lie in its unique catalysts

Catalyst #1: 💼 Spot ETFs

Since the ETF approvals in January, these inflows have consistently exceeded Bitcoin issuance more than 3 times, which has put upward pressure on the price. Concurrently, it also led to higher premiums on Coinbase, as US firms are buying BTC to support the issuance of ETF shares.

Catalyst #2: Stablecoin issuance increasing 📈, BTC held on exchanges decreasing 📉

Stablecoins serve as a primary base pair for trading on most exchanges. An increase in stablecoin liquidity means more capital is available for trading, which typically fuels bull market momentums.
The noticeable decrease in Bitcoin held on exchanges signals a supply squeeze partly driven by spot Bitcoin ETFs transferring BTC into custodian cold wallets for long-term storage. The proportion of total BTC held on exchanges has shrunk to approximately 12% of circulating supply, marking its lowest level in five years.

➡️ Patterns suggesting we’re in mid-phase:

A big gap between Market Value and Realized Value (MVRV Z-score) implies substantial room for additional upward movement.

Retail market sentiment is subdued (new youtube influencers subscriptions, “crypto” Google trend score are still lower than in the previous bull run). This means that retail is yet to fully enter the market.

➡️ Patterns suggesting we’re close to the peak:

Net unrealized profit/loss of 60% means investors who bought in at a lower cost basis still hang on to their coins. A historical peak of 70% would suggest we approach a cycle high on this measure.

The ColinTalksCrypto Bitcoin Bull Run Index, which synthesizes nine various historic and sentiment ratios to measure the bull run, indicates an 80/100 progress to the peak.

Such a divergence between the bull run markers, as well as an all-time high reached before the halving, could indicate that the specific catalysts of this cycle are going to change the historic trends.

However, as usual, we cannot know for sure to which side: the spot Bitcoin ETFs, for example, are likely to attract investors more comfortable with traditional investment vehicles, but at the same time, we don’t know how they will react to the price drawbacks that are inevitable in any Bitcoin cycle.