Cryptocurrency

The surge in demand for Bitcoin has coincided with significant selling of gold ETFs, which experienced outflows of $7.7 billion over the same period, even as the price of gold reached an all-time high of $2,200 per troy ounce.The data indicates that outflows from gold ETFs began in April 2022 and have continued consistently since then, without acceleration triggered by the launch of U.S. spot Bitcoin ETFs. Approximately $46 billion has been withdrawn from gold ETFs over this period.This divergence in ETF flows challenges the notion that Bitcoin’s rise has directly led to gold’s decline in investor interest, as the trends in gold ETF outflows began before the significant rise of Bitcoin ETFs in the U.S.According to Galaxy report, in the first quarter of 2024, venture capitalists injected $2.49 billion into crypto and blockchain-focused companies through 603 deals, marking a 29% increase quarter-over-quarter in funding amount and a 68% increase in the number of deals.Traditionally, venture capital investment in the crypto sector has closely mirrored the movements of Bitcoin’s price. However, over the past year, this correlation has broken down. Despite Bitcoin’s significant price rise since January 2023, VC activity has not seen a proportional surge.Although Q1, 2024 witnessed a notable increase in Bitcoin’s value, the level of capital invested still remains below the heights seen when Bitcoin last surpassed $60,000.This divergence can be attributed to a combination of industry-specific catalysts (such as Bitcoin ETFs, advancements in areas like restaking and modularity, and Bitcoin Layer 2 solutions) and broader macroeconomic factors like interest rates.As the first digital, independent, global, rules-based monetary system, Bitcoin’s decentralization mitigates systemic risks associated with traditional financial systems relying on centralized intermediaries. It serves as a platform for transferring and storing Bitcoin, a scarce digital monetary asset.Unlike traditional financial systems, which rely on centralized institutions, Bitcoin operates as a single institution governed by a global network of peers, promoting automated, public and transparent enforcement of rules.Bitcoin’s volatility is paradoxically tied to its monetary policy, underscoring its credibility as an independent monetary system. Unlike modern central banking, Bitcoin does not prioritize price stability; instead, it controls Bitcoin’s supply growth to prioritize the free flow of capital. This dynamic explains Bitcoin’s price volatility, which is driven by demand relative to its supply.Comparing Bitcoin’s price with the Fed Funds Rate demonstrates its resilience across different interest rate and economic environments. Notably, Bitcoin’s price has appreciated significantly in both high and low interest rate regimes.Over the past decade, Bitcoin has proven resilient during risk-off periods, with its price consistently higher than during such events.This article was originally published on U.Today More

The tweet, which offered a perspective on the workings of the Federal Reserve, has sparked a reaction from the crypto community. In a compelling tweet, Musk drew an analogy between the United States Federal Reserve and the popular board game Monopoly.Musk compared the Federal Reserve’s ability to create money to the Monopoly game’s rule that allows the bank to never go bankrupt, implying that, like the game, the Fed can always print more money. This metaphor emphasizes concerns about the Fed’s quantitative easing (QE) program and its impact on inflation and currency value.In the aftermath of Musk’s X post, cryptocurrency communities like Bitcoin, XRP and Dogecoin responded in a variety of ways, offering their perspectives.In response to Musk’s post, financial analyst Michaël van de Poppe advocates Bitcoin, silver and gold, predicting that QE might be reintroduced.Some members of the Bitcoin community interpreted Musk’s post on how the Federal Reserve works as a recognition of the need for sound monetary policies and the potential benefits of a deflationary digital asset like Bitcoin. “Bitcoin fixes this,” they said. This belief stems from the idea that Bitcoin is sound money due to its supply cap and predictable issuance schedule.Some Dogecoin community members replied, including co-founder Billy Markus, also known as “Shibetoshi Nakamoto” on X. Prominent Dogecoin community member “Sir Doge of the coin” also noted, “Dogecoin fixes this.”XRP influencer “XRP crypto wolf” said, “Save yourself with XRP and crypto.”This article was originally published on U.Today More

What adds to the mystery is the alleged involvement of Huobi, a prominent exchange platform, in the chain of transfers. Sources indicate that the unknown Bitcoin wallet may indeed be linked to Huobi, deepening the mystery surrounding the destination of the digital funds.Shortly after, the same 1,000 BTC made its way from one of Huobi’s wallets to another undisclosed address labeled “1Fbsri.” This intricate movement of funds raises questions about the motivations behind such maneuvers and the identities of those orchestrating them.Remarkably, the journey of this substantial volume of cryptocurrency did not end there. On-chain data reveals that the Bitcoin eventually found its way to Binance, the world’s largest crypto exchange, further amplifying curiosity about the ultimate destination and purpose of these transfers.What prompted Tron DAO to initiate this significant transfer? Who are the intended recipients of these funds, and what are their intentions? These are the questions whose answers could lift the veil of mystery over these movements of millions of dollars in BTC on an ordinary Sunday afternoon.This article was originally published on U.Today More

According to Lookonchain’s latest findings, these wallets, inactive for precisely 10.7 years, have swiftly transferred their entire holdings of 1,000 BTC, currently valued at a staggering $60.9 million, within a mere 20-minute window.The wallets in question, identified as “16vRqA” and “1DUJuH,” received their initial deposits of 500 BTC each back in September 2013, when Bitcoin was valued at a modest $124 per coin.Fast forward to today, and these addresses have witnessed an extraordinary surge in value, boasting an astronomical profit margin of 49,274.2%. In monetary terms, this translates to a jaw-dropping $60.8 million windfall, equating to an astonishing $5.7 million in profit accrued annually over the past 11 years.The sudden reactivation of these dormant BTC whales has sparked intense speculation within the cryptocurrency community. Many analysts posit that such a move could signify a pivotal shift in market sentiment.Historically, the emergence of long-dormant Bitcoin holders has often been interpreted as a bearish signal, suggesting a potential sell-off to lock in profits. However, the unique circumstances surrounding these ancient wallets leave the market eagerly anticipating their next move.This article was originally published on U.Today More

Schiff has been vocal about his views on Bitcoin, often contrasting its value and utility against traditional assets like gold. His latest remarks emphasize his disbelief in the cryptocurrency’s value, likening the enthusiasm around it to being “drunk on the Kool-Aid.” Schiff’s analogy to “the emperor’s new clothes” suggests he sees Bitcoin’s value as largely imaginary, promoted by collective belief rather than intrinsic worth.This perspective is consistent with his previous statements on the dynamics of Bitcoin’s price. He has commented on the launch of Bitcoin ETFs, noting that initial lack of sellers due to overwhelming buyer interest had temporarily buoyed prices.However, he predicted that as more investors hold these ETFs, the increase in potential sellers would outstrip buying demand, leading to price declines. This viewpoint aligns with his broader skepticism about the sustainability of Bitcoin’s market performance.Critics of Schiff often argue that his continual critiques of Bitcoin are part of a personal branding strategy. They speculate that he might secretly own Bitcoin, using his public disparagement as a way to draw attention to himself and his preferred investment, gold. This theory suggests that Schiff’s criticism could be a calculated move to maintain relevance in social channels.Ultimately, whether Schiff’s position is a marketing strategy or a genuine philosophy, his statements are being noticed and analyzed. He has been right on numerous cases when criticizing Bitcoin and the path it has chosen. However, it’s important to note that Schiff predicted Bitcoin’s fall to all-time lows, ahead of mind-blowing rallies toward ATHs.This article was originally published on U.Today More

Bitcoin is known for its extreme volatility, with significant price swings like a roller-coaster ride — plunging over 64% in 2022 and then rallying 160% in 2023. This volatility can be challenging for crypto traders.On the other hand, the S&P 500 offers more stable performance, averaging 9% to 10% annual returns and serving as a benchmark for the U.S. economy. Despite lower returns compared to Bitcoin, the S&P 500’s consistency and reliability make it a favored choice for risk-averse investors seeking predictable investment outcomes.Allocations to cryptocurrency can diversify risk and enhance returns in traditional portfolios, according to Glassnode.For example, adding small allocations to the Coinbase (NASDAQ:COIN) Core Index (COINCORE), a market-cap weighted crypto index primarily composed of Bitcoin (70.9%) and Ether (21.9%), to a 60/40 portfolio (60% MSCI ACWI and 40% U.S. Agg) increased both absolute and risk-adjusted returns over a five-year period ending March 31, 2024.Bitcoin (BTC) had an impressive first quarter in 2024, posting a 69% return and outperforming most traditional asset classes, according to Coinbase and Glassnode joint report.Despite the launch of BTC ETFs, which many thought would lead to a stronger correlation with traditional finance assets, BTC displayed minimal correlation with major asset classes, using data from a recent Glassnode and Coinbase Institutional report. This suggests its potential as a valuable component for diversification within a portfolio.Bitcoin negatively correlated with the DXY index and gold, while its correlation with the S&P 500 was low at 0.11. This suggests that Bitcoin’s price movements are largely independent of traditional markets.However, at the start of Q2, BTC is down 15% from its highs, coinciding with the DXY index rising above 106, further highlighting the negative correlation between the two.The Q2 report also noted a decrease in Bitcoin’s volatility since January 2020, with peaks becoming less pronounced. Although volatility currently sits just under 60%, the report emphasizes a long-term downward trajectory despite occasional spikes above the trendline, mainly during 2020 and 2021.As Bitcoin continues to mature into a major asset class, its volatility is expected to continue to decline over time.According to Tastylive research, generally, there is little correlation between Bitcoin and the S&P 500, except during significant price movements of Bitcoin (+5% or more to the upside, or less than -5% to the downside).When Bitcoin’s price movement exceeds 5%:This created a favorable environment for risk-on trading, leading to bull rallies for both Bitcoin and the S&P 500 index despite the bearish sentiment following the 2022 correction.As Bitcoin’s correlation with traditional equity markets like the S&P 500 and Nasdaq increases while its correlation with gold decreases, it suggests that Bitcoin is behaving more like a risk-on asset rather than a safe haven.When investors are feeling adventurous, they often gravitate toward stocks and digital coins for the potential of higher profits.The increasing involvement of institutional and retail investors in both equity and cryptocurrency markets could lead to simultaneous buy and sell decisions, aligning the price movements of these assets.This article was originally published on U.Today More

Demeester stressed that this timeline was chosen to demonstrate the long-term effects of Ethereum’s (ETH) migration to the proof-of-stake (PoS) consensus.He recalled that Ethereum (ETH) managed to replace PoW with PoS 18 months ago, in mid-September 2022. After this game-changing upgrade was activated, Bitcoin (BTC) became the only major cryptocurrency leveraging the proof-of-work (PoW) consensus.As covered by U.Today previously, Ethereum (ETH) founder Vitalik Buterin called its now-deprecated proof-of-work version too vulnerable to centralization.Buterin recalled that PoW always was nothing but a “temporary stage” before migration to proof of stake, which replaced mining with staking as a way to secure blockchain consensus.As of now, Ethereum’s (ETH) proof-of-stake (PoS) ecosystem features more than 1 million active validators, U.Today reported in April.Followers of Demeester indicated that this metric can be different should we zoom out. For instance, on a 10-year time frame, it would demonstrate 76,000% growth instead of a 36.4% decrease.However, veteran trader Peter Brandt noticed that in three years, ETH/BTC might be 57% down, according to Demeester’s model.This article was originally published on U.Today More

In a recent analysis, McGlone highlighted the slumping Bitcoin/gold cross, particularly to the S&P 500 and its broader implications for risk assets. The analysis also reflects on Bitcoin’s rally post-SEC approval of spot Bitcoin ETFs.According to McGlone, the January U.S. ETF launches boosted inflows, strengthening Bitcoin’s status as a leading indicator. It was a near-perfect storm as Bitcoin attained all-time highs in Q1, but it did not make new all-time highs versus gold and S&P 500, failing to surpass peaks set in 2021.Given that the inflows into the Bitcoin ETFs have relatively slowed, the hangover may have implications for risk assets, including cryptocurrencies.McGlone explained that Bitcoin was climbing against gold the last time the S&P 500 e-mini future crossed above its 50-week moving average in November, but now the Bitcoin/gold cross is falling.The slumping Bitcoin/gold cross, in contrast to the S&P 500’s performance, might indicate a potential reversal in risk assets that could have far-reaching consequences.In late April, Bitcoin experienced its halving event, which has historically been a chopping sell-the-news event in the immediate term. The fourth halving was no exception, with the Bitcoin price falling shortly after and trading near $57,000. This is the lowest price in the past two months, and the market has been flat since the halving date.Measured from the above $73,000 all-time high reached in mid-March, Bitcoin prices fell by nearly 20%, which is the deepest correction on a closing basis since the FTX lows in November 2022. Howbeit, Glassnode deduces that this macro uptrend might be one of the most resilient in history, with comparatively shallow corrections thus far.This article was originally published on U.Today More