According to the latest K33 Research report, the recovery of Bitcoin price to all-time highs will be “significantly faster” this cycle.
The decline has lasted 755 days so far, and is currently about 36% off Bitcoin’s all-time high of about $69,000 in November 2021. This compares to K33 Senior’s 1,178 days to recovery since 2013 and 1,092 days since 2017. Analyst Vetle Lunde and Vice President Anders Helseth said:
“Neither of the past cycles have seen institutional demand comparable to what we see now. All major financial institutions have participated in this space and have vocally endorsed it. BTC
+2.86%
“Publicly,” analysts said. “A final ruling on the US ETF is expected within 36 days and the market is showing significant demand to accumulate exposure ahead of the expected launch,” they added. He argued that the current upswing is driven by realistic and compelling stories.
Bitcoin bear market falls. Image: K33 Research.
However, “whether we get back to the all-time high of $69,000 will depend on the actual flows that the ETF will bring in its first few weeks of trading. Otherwise, you are setting yourself up for a classic ‘sell the news’ moment next year,” analysts at QCP Capital warned today.
The Securities and Exchange Commission has not yet approved a spot Bitcoin ETF in the United States, having previously approved futures-based funds in 2021. BlackRock, Bitwise, VanEck, WisdomTree, Invesco, Fidelity and Valkyrie fall in mid-January. Bloomberg analyst James Seyffart recently said that the potential spot Bitcoin ETF approval window is likely to take place between January 5 and January 10.
Data from institutional traders at the Chicago Mercantile Exchange shows that Bitcoin and Ethereum are yet to take advantage, with annual premiums exceeding 17% and open interest hitting record highs, Lunde and Helseth noted. Premium is the difference between the spot price and the futures price of an asset.
CME Premium. Image: K33 Research.
Retailers ‘not wild yet’
Bitcoin’s 164% year-to-date price rise has not been reflected in increased retail participation, Lunde and Helseth said. Retail demand is currently lower than in the third quarter of 2022, according to website traffic data and exchange reports, they added.
Visitors to cryptocurrency websites, often used as a proxy for retail profits, are down about 50% from a year ago. This is consistent with Coinbase’s third quarter report, which highlights a continued decline in trading volume since 2021.
Web traffic by quarter. Image: K33 Research.
Google search volume for Bitcoin, Ethereum, and other cryptocurrency-related terms shows similar trends, according to The Block’s data dashboard.
Cryptocurrency derivatives trading in offshore markets is also showing no signs of a “retail bubble” and funding rates remain neutral, analysts said. K33 analysts added that while there were signs of increased retail demand due to long-term exposure, it was “certainly not at a worrying level yet.”
Lunde and Helseth argued that “retail participation is still a shallow point that gives BTC the real ability to advance further if the cryptocurrency returns to the limelight.”
Bitcoin price rise continues
Bitcoin is currently trading at $43,747, according to price data from The Block. The largest cryptocurrency by market capitalization is currently up more than 16% in the past week and 25% in the past month, returning to levels not seen since the collapse of the Terra ecosystem in May 2022.
BTC/USD price chart. Image: Block/TradingView.
As for altcoins, Ethereum is up 10% over the past week to over $2,260. This is an 86% increase compared to the previous year. Solana is up 5% over the same period and is up more than 500% this year. Meanwhile, BNB was flat last week due to Binance’s legal and regulatory issues that caused the cryptocurrency’s price to decline in 2023. It’s down 6% since the beginning of the year.
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