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Dear EpicMiners,
Welcome to another exciting edition of the Epic Mining Newsletter! In this issue, we delve into the latest twists and turns of the Bitcoin market, focusing on the most recent developments that are shaping the future of Bitcoin and the broader market. As always, our aim is to keep you informed, engaged, and ahead of the curve in this rapidly evolving landscape.
Summary:
- FED Meeting: Interest rates remain unchanged for the fourth consecutive time.
- Jerome Powell’s Stance: Emphasizes caution, waiting for inflation to stabilize at 2% before considering rate cuts.
- Inflation Data: Shows stabilization but hasn’t reached the 2% target yet.
- Fidelity’s Bitcoin Allocation: Adds 1% Bitcoin to their All-In-One Conservative ETF, marking a shift in traditional asset management.
- GBTC Outflows Slowing: Notably affects Bitcoin’s price; inflows into Bitcoin ETFs surging.
- Bitcoin’s Price Action: Rose from $44k to $46k in 24 hours due to ETF inflows.
- Bitcoin surges past key resistance levels, aiming for next resistance between $47.7k to $50k.
- Bitcoin Short-Term Holder Realized Price: Shows recovery, aligns with market price indicating profitability for short-term holders.
- Number of Addresses with a Non-Zero Balance reached 51.2 million.
- Bitcoin Rainbow Chart: Indicates ‘buy’ territory, suggesting a favorable time for Bitcoin accumulation.
- Hut 8 Appoints Asher Genoot as new CEO following merger with US Bitcoin Corp, marking a strategic shift in leadership.
Bi-Weekly Market Changes
28 – 01 / 10 – 02
News
Results Of Latest FED Meeting: Interest Rates Don’t Change
The Federal Reserve’s Open Market Committee (FOMC) decided this Wednesday to maintain the interest rates steady for the fourth time in a row. Jerome Powell, the Chair of the Federal Reserve, emphasized a cautious approach, highlighting the need for more substantial evidence of inflation stabilizing at their 2% target before considering any rate cuts. This decision is scheduled to hold until at least the next meeting on March 20th. The graph below shows the latest inflation data of the US. We can see that it is stabilizing but still not near the 2% target.
Powell’s stance resonates with historical lessons in financial policy. History has repeatedly shown that premature loosening of policies, especially when inflation seems to be easing, can lead to a swift resurgence of inflation. Therefore, the Fed’s decision to continue its monetary tightening until there’s undeniable evidence that inflation is under control, is the right strategy.
The essence of this decision lies in balancing the act of taming inflation without causing significant job losses. The Fed’s current policies seem to be effective in achieving this delicate balance, yet they believe there’s more ground to cover before interest rates can go down.
The market currently anticipates the first rate cut to occur in the May meeting, with an 84% expectation that the interest rates will remain unchanged in the upcoming FOMC meeting. Only 16% foresee a potential decrease, while none expect an increase. This decision brings a sense of assurance to the financial markets.
Fidelity adds 1% Bitcoin to their All-In-One Conservative ETF
Fidelity Canada has recently allocated a 1% position of Bitcoin in their “All-In-One Conservative ETF”. This marks a significant shift in the traditional asset management especially because they added it to their conservative ETF.
The inclusion of Bitcoin into a conservative strategy ETF shows that the financial market are starting to see Bitcoin as a save haven. While a 1% allocation might seem small at first glance, the effects are large. With over $500 trillion in global equities and treasuries, even a small shift of capital, just 1% towards Bitcoin will, have a large impact on the market.
The potential market dynamics stemming from such shifts are significant. While the journey might not be smooth, the direction is clear, a gradual, yet substantial, integration of Bitcoin into traditional investment vehicles. This development could lead to a transformative phase in the financial markets, with Bitcoin playing a pivotal role in reshaping investment strategies.
GBTC’s Slowing Outflows and the Surge in Bitcoin ETF Inflows
The outflow of Grayscale Bitcoin Trust (GBTC) is slowing down. This week, daily outflows hovered around $100 million. This slowdown in GBTC’s outflows is a primary factor in the robust BTC price action observed this week.
Notably, the Bitcoin Spot ETF update on Friday, after 20 trading days, shows an very exciting trend. While GBTC outflows remained between $80k-$100m, The other Bitcoin ETF’s experienced an extraordinary day with inflows surpassing $500m. BlackRock led the pack with over $200m ($204m), followed by Fidelity’s impressive $128m inflow. ARK&21Shares and BitwiseInvest also saw significant inflows of $86m and $60m, respectively.
It was predicted that the introduction of the ETF would make way for more capital inflow in the Bitcoin market, and this is to see in the rising Bitcoin’s price, which moved from $44k to $46k in just 24 hours. The net inflow of $403m, with Bitcoin’s price at around $45k, equates to the net buying of approximately 8,955 Bitcoins. This volume is about 20 times higher than the daily impact of Bitcoin halving, underscoring the substantial influence of ETF flows on the market.
The introduction of Bitcoin into ETFs has been very good for bitcoin. As passive capital continues to flow into these accessible investment vehicles, we will see the price of Bitcoin only rise more.
Technical Analysis
The Bullish Momentum of Bitcoin: Surging Past Key Resistance Levels
Bitcoin’s price action this week has been exceptionally bullish, marking the most significant surge since its October breakthrough above $30k. The previous analysis accurately anticipated the critical resistance zone between $42.3k and $43.9k, which Bitcoin has now successfully breached. This momentum sets the stage for a challenging climb towards the next resistance band of $47.7k to $50k. Notably, Bitcoin has demonstrated resilience by finding support at the 100 daily moving average, reinforcing a strong bullish sentiment.
The ability to surpass this range hinges largely on the dynamics of market demand. Key factors include the potential for ETF inflows to outweigh profit-taking strategies and short selling, which are typical responses at these higher price levels. If demand remains robust, breaking the $50k barrier could see Bitcoin’s price trajectory aiming for approximately $52.5k.
Chain Analysis
Bitcoin Short-Term Holder Realized Price
The Short-Term Holder Cost Basis, also known as the Realized Price, indicates a full recovery from the dip that followed the ETF approval. With continuous ETF inflows, the anticipated 2024 Bitcoin halving, and sustained levels of illiquid supply, the market’s confidence in Bitcoin is good.
As seen in the latest chart, the Realized Price of Bitcoin has aligned closely with its market price, suggesting that short-term holders are now in a profitable position. This trend is an encouraging sign for the market, reinforcing the positive sentiment as we approach the halving event.
Number of Addresses with a Non-Zero Balance Reach 51.2 Million.
The total number of non-zero Bitcoin addresses has surged to a record 51.2 million. A striking display of Bitcoin’s growing adoption. This chart illustrates a robust upward trajectory, indicating a widening embrace of Bitcoin as an asset. The correlation between the increasing addresses and Bitcoin’s price suggests a healthy, bullish market sentiment. As more participants hold Bitcoin, the foundational strength of the network intensifies, hinting at a deepening trust in Bitcoin’s value proposition and potential for further growth.
There are only 21.000.000 Bitcoins. The more people will use it, the fixed supply will make sure that the value per Bitcoin has to go up like the graph supports.
Bitcoin Rainbow Chart
The Bitcoin Rainbow Chart is an insightful tool to roughly see the sentiment of the market. It currently suggests that Bitcoin remains firmly in the ‘buy’ territory, indicating a good moment for accumulation of Bitcoin. As we look ahead, with significant events like the Bitcoin halving, investments made now are poised to be successful in the future.
Mining News
Bitcoin Miner Hut 8 Appoints New CEO
Hut 8, a leading figure in the Bitcoin mining industry, has announced a significant change in its leadership. Asher Genoot, previously the President and a Board Member, steps up as the new Chief Executive Officer, succeeding Jamie Leverton, seen in the picture here above. This shift in executive command follows closely on the heels of Hut 8’s merger with US Bitcoin Corp, a move described by the board as a “pivotal inflection point”. The decision for this change in leadership is aligned with the company’s strategy to navigate this new phase in its growth trajectory.
Genoot’s appointment marks a new era for Hut 8, emphasizing a fresh strategic direction post-merger. His leadership is expected to bolster Hut 8’s position in the market and unlock new potential, following a disciplined and proven approach. This change is pivotal for Hut 8, especially considering its stature as a major player in the Bitcoin mining sector
We wish you a good week and keep those mining rigs running!
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