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crypto is officially in the early stages
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of euphoria and how awesome does it feel
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a crypto sentiment is overwhelmingly
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positive and why wouldn't it be well why
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not why not pretty much everyone is in
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profit and the best part we're only just
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getting started and this was backed up
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by a recently released crypto report
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which shows just how early we still are
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today we'll break down this report for
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you in simp terms and tell you what this
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could all mean for the crypto Market
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stay
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tuned now the report will be summarizing
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today is titled quote digital asset
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report institutional perspective it was
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recently published by glass node and
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fanara digital we'll leave a link to the
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full report in the description for you
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if you want to check it out in full a
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fair warning though it was written right
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before BTC went on the Rampage to new
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all highs so not all the information
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will be applicable today it's just uh
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one of those things folks crypto moves
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very fast after all in any case we'll be
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giving you the key highlights in today's
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video anyway the report starts with a
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look at how the crypto Market has been
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performing as a whole starting with the
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two largest cryptos BTC and eth the
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authors note that since FTX
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spectacularly collapsed way back in 2022
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the market has recovered very well and
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this is an understatement for BTC which
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had gained
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372 at the time of the report's
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publication and it's been running on
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Rocket Fuel ever since as you'll know
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this is largely thanks to the spot
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Bitcoin ETFs which have encouraged
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institutional investors to enter the
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space in a more regulated fashion as for
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ethereum and The Wider crypto Market
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things have recovered in a similar
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fashion albeit not in quite a dramatic
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way to BTC in that same period eth
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recovered
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137% slightly underperforming the
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broader altcoin Market which gained
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158% naturally this is because BTC
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dominance has remained very high and new
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retail has yet to arrive and explore the
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broader crypto Market to back this up
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the report users onchain data to assess
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the capital rotation in crypto the chart
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provided it clearly shows that in the
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last cycle investors would allocate most
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of their Capital to BTC and then rotate
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to Els and stable coins once BTC hit its
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peak however because of the lack of
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retail in this cycle not much Capital
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has shifted away from BTC so far anyway
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now the next part of the report Zooms in
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on the spot Market the authors highlight
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that trading volume on centralized
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exchanges peaked when BTC hit its March
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alltime high but have been steadily
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climbing since May in fact trading
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volume on Sexes have been consistently
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climbing since October 2023 are showing
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that investors have been positioning
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themselves without really moving the
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market the authors then use a metric
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called cvd which stands for cumulative
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volume Delta to keep things simple the
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cvd metric basically measures cell
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pressure and as it so happens cell
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pressure has remained strong since btc's
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March high but this has less to do with
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price speculation and more to do with
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the supply shocks we saw earlier in the
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year like mount g distributions or the
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German government selling nearly 50,000
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BTC it's crazy how btc's parabolic rally
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can make even recent events feel like a
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a distant memory he the authors then
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turn their attention to bitcoin's
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derivatives Market which have grown a
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lot in recent years we won't go over
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everything here for the sake of time but
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there are a few key takeaways the first
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is that the practice of using crypto as
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collateral for a 100x leverage Futures
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position is becoming far less common
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instead more Futures Traders are using
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USD backed stable coins which has
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changed the Dynamics of the crypto
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Market but that's a topic for another
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time now on top of this the authors
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point out that following the approval of
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the spot Bitcoin ETFs earlier this year
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we saw a wave of leveraged Traders
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getting liquidated in either direction
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especially after btc's peak in March
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however the amount of liquidations since
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then has actually been on the decline
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and this means that btc's current rally
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should have a fairly smooth ride ahead
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not many crazy liquidations at least for
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now the authors then look at the size of
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the borrowing and lending Market which
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they estimate to be roughly the same
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across both CI and defi platforms they
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note that thanks to various reaking
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incentives there's been a steady
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increase in the amount of borrowed
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crypto since March the stable coins made
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up around 1/3 of the demand here whereas
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eth and other tokens made up the
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remaining 23s and this makes sense when
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you consider that most of this activity
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would have been happening on Lio Finance
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which supports liquid Stak eth and by
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the way if you enjoying this video so
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far then let it be known give that like
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button a boost and don't forget to
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subscribe and ping the Bell
00:05:40
notifications as well so you don't miss
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our next video the next part of the
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report takes a look at the US spot
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Bitcoin ETFs which you'll know were
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approved back in January and opened The
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Floodgate to traditional and
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institutional investors everywhere
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according to the report the ETFs now
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hold roughly 5 % of btc's Supply which
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some would argue is more of a net
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negative than a positive as bullish as
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the ETFs have been some Bitcoin purists
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believe that btc's concentration in
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traditional Financial Vehicles goes
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against its core ethos as an alternative
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to the Legacy Financial system anywh who
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the authors note that whilst BTC was
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chopping sideways since March ETF
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volumes were consistently between 1
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billion and 2 billion per day but this
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began to spike as BTC went on its
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Mission To The Moon according to the
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report the average price that ETF
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investors accumulated BTC was around 62k
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what's impressive is that because ETF
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holders are typically inclined to hold
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longterm the outflows have been
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relatively low even as they move into
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profit although this does beg the
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question of how much damage this would
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do to btc's price once they do decide to
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start selling logically these outflows
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would push btc's price down just as fast
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as it pushed it up but uh well let's
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enjoy this for now and cross that bridge
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when we get there eh the authors then
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analyzed the amount invested into the
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ETFs relative to the capital inflow into
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BTC between 4 and 5% of the total
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Capital flowing into BTC can be
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attributed to the ETFs which aligns
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perfectly with the amount of BTC held by
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the ETFs themselves which you'll recall
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is also between 4 and 5% as the authors
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put it quote this provides a reasonable
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Baseline for evaluating their influence
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on the market and next the authors
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compare the spot ETFs for Bitcoin and
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ethereum and as you'll know the demand
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for the spot ethereum ETFs has been
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somewhat lackluster to say the least and
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as such the inflows and outflows have
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only managed to move eth's price up or
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down by about 1% meanwhile btc's price
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is much more affected which can move up
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or down by around 8% as a result of ETF
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inflows and outflows now the next part
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of the report takes a look at crypto's
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adoption by assessing the active
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entities metric which is a neat little
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metric that combines any active
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addresses that could belong to a single
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entity the benefit here is that it gives
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us a much more accurate user count when
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the market is in uptrend the number of
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active entities grows in response
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interestingly enough the number of
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active entities will also Spike when the
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market capitulates according to the
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report while BTC was chopping sideways
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throughout the year there were between
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180,000 and 300,000 active entities
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transacting on the Bitcoin Network
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what's crazy is that there have been
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almost 42 million active entities since
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Bitcoin was first launched back in 200 9
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while this is impressive it's also
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insanely bullish when you consider that
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42 million users equates to around 0.5%
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of the world's population of course this
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assumes that everyone is self- custody
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in their Bitcoin uh most people are
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probably using exchanges as custodians
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and if that's you stop it get a hardware
00:09:23
wallet a link to our deals page in the
00:09:25
description and speaking of which not
00:09:27
only does it have discounts on Hardware
00:09:29
wallets but also Exchange sign up
00:09:31
bonuses of up to
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$100,000 and trading fee discounts of up
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to 70% these uh won't be available
00:09:39
forever so check that out below Pronto
00:09:42
anyway another adoption metric is how
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much daily onchain volume takes place on
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the Bitcoin Network according to the
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authors's quote on an unfiltered basis
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Bitcoin currently sees around 41 billion
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daily onchain volume similar to
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traditional payment processes like visa
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and MasterCard that's insane however the
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caveat is that word unfiltered basically
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once you filter out the number of
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transactions taking place on centralized
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exchanges the real volumes are closer to
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8 billion per day which is still pretty
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damn impressive for perspective that's
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higher than the market cap of every
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single crypto outside of the top 20 next
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the authors take a look at bitcoin's
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realized cap now for those who don't
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know realized cap is similar to market
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cap except that instead of valuing BTC
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based on its current price a realized
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cap values BTC based on the price of BTC
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when that Bitcoin was last transacted on
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chain essentially this gives you a less
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volatile picture of btc's overall value
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and as you'd expect btc's realized cap
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has been increasing in recent weeks
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suggesting continued BTC buying even at
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higher prices and this dovet tales with
00:11:03
a tokenization of real world assets or
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rwas which has been another narrative
00:11:08
attracting investors to crypto and this
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makes sense considering rwas consist of
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assets investors are familiar with like
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gold treasuries and other Securities as
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you'll also know stable coins have
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become the backbone for the crypto
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industry now being the primary trading
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pair for most cryptocurrencies and used
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also as collateral within defi protocols
00:11:31
what you may not know is that stable
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coins are technically also rwas as
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they're backed mostly by us Bonds in
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recent months we've seen the likes of
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Black Rock and Franklin Templeton
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dipping their toes into tokenized rwas
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giving them first mover advantages and
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notably asset managers have adopted the
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more simplified tokenized treasuries
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above all other tokenized rwas whereas
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more complicated products have seen much
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slower adoption in the next part of the
00:12:01
report the authors take a look at
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institutional allocators now starting
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with funding from Venture capitalists or
00:12:08
VC's despite btc's ungodly rally to new
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all-time highs VC investment has been
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surprisingly slow which is in stark
00:12:18
contrast to previous bull cycles if you
00:12:21
watched our recent video on the lack of
00:12:23
VC investment you'll know that VC
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interest today is about as low as it was
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in 2020 3 and this is likely because
00:12:31
they're waiting for the next big
00:12:33
narrative spoiler alert but it won't be
00:12:36
the so-called mecoin super cycle we'll
00:12:39
leave a link to that video in the
00:12:41
description for you by the way next the
00:12:44
authors turn to the largest publicly
00:12:46
traded companies holding BTC on their
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balance sheets it comes as no surprise
00:12:52
that the company that takes the crown
00:12:54
here with well over 270,000 BTC is micro
00:12:58
Strat
00:12:59
thanks in large part to Michael sailor's
00:13:02
insanely bullish outlook on bitcoin
00:13:04
incidentally we also put out a recent
00:13:07
micro strategy update and you can learn
00:13:08
more about what sailor and Co have been
00:13:11
up to using the link in the description
00:13:13
of course other listed companies holding
00:13:15
BTC include Bitcoin mining companies
00:13:18
like marathon and Riot and a few
00:13:20
companies unrelated to the crypto
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industry although to be fair one of
00:13:25
these is Tesla and it's a bit hard to
00:13:27
say that it's completely unrelated to
00:13:29
when its founder and CEO is Elon Musk
00:13:33
the uh Doge father himself anyway other
00:13:36
companies mentioned include AKA which is
00:13:38
an Energy Services Company and Boya
00:13:41
which is an online gaming company uh for
00:13:44
anyone wondering Tesla holds
00:13:47
9,720 BTC whereas AO holds
00:13:51
1,170 BTC and Boya holds 1,100 BTC at
00:13:57
least at the time of shooting this video
00:13:59
What's even more bullish is that Tech
00:14:01
Giant Microsoft also has an upcoming
00:14:04
call with its shareholders where they
00:14:05
will vote whether it should start
00:14:07
holding BTC as well and if Microsoft
00:14:10
adopts BTC on its balance sheet you can
00:14:13
bet your bottom satachi that other tech
00:14:16
companies will follow suit uh the call
00:14:19
is scheduled to take place on the 10th
00:14:21
of December by the way so uh mark your
00:14:24
calendars guys now in the final section
00:14:26
of the report the authors take a look at
00:14:28
where we are in this cycle but as we
00:14:31
said at the beginning this has become
00:14:33
much more obvious now that BTC is
00:14:36
rallying like crazy in a nutshell the
00:14:39
authors explained that BTC experienced a
00:14:41
lot of profit taking once it hit its
00:14:43
peak back in March and would only enter
00:14:46
a stage of euphoria once it broke above
00:14:49
that 69k resistance level of course this
00:14:53
means that we are now well and truly
00:14:56
feeling that uh Euphoria the authors
00:14:59
then assess the annualized volatility of
00:15:01
the crypto Market which has been
00:15:02
declining with each and every Market
00:15:04
cycle on the one hand this is a good
00:15:07
thing because a key reason why people
00:15:09
are put off from investing into crypto
00:15:11
is because of how volatile it is and the
00:15:14
inherent risks that would bring to their
00:15:17
portfolio logically then reduced
00:15:19
volatility would mean more adoption and
00:15:21
more money flowing into the market on
00:15:24
the other hand the reduced volatility
00:15:27
also results in diminishing returns for
00:15:29
each market cycle put differently those
00:15:33
crazy 1,000x returns are going to be
00:15:36
harder to come across and it's safe to
00:15:38
say that those kinds of gains are long
00:15:40
gone for BTC and other large cap
00:15:43
altcoins apologies to any Moon boys out
00:15:47
there in all seriousness the authors
00:15:49
provid some stats about the realized
00:15:51
volatility for the last three cycles and
00:15:54
in case you were wondering realized
00:15:56
volatility is a measure of how much a
00:15:58
crypto currency price has actually
00:16:01
fluctuated over a given period of time
00:16:04
btc's realized volatility in the 2017
00:16:07
bull market was between 120 and
00:16:10
150% whereas the realized volatility in
00:16:13
the 2021 bull market was between 80 and
00:16:17
100% according to the report the
00:16:19
realized volatility for the bull market
00:16:21
this year is just between 40 to 60% and
00:16:26
finally the authors round off this
00:16:28
report by looking in at aetric called
00:16:30
the realized cap hodle waves which
00:16:32
assesses the composition of network
00:16:34
wealth historically when BTC hits a
00:16:37
cycle top there is a sharp spike in
00:16:39
investor wealth which makes sense
00:16:41
because at that point pretty much
00:16:43
everyone is in profit as more and more
00:16:46
people find themselves in the green new
00:16:49
retail investors on the outside will
00:16:51
feel the fomo and start aping into the
00:16:54
crypto Market however so far this time
00:16:57
around we haven't seen those levels
00:16:59
being hit in other words this bull cycle
00:17:03
is far from over and if you worried that
00:17:06
you missed the boat this could help put
00:17:09
your mind at ease so then the big
00:17:12
question what does all this mean for
00:17:15
crypto well in case it wasn't already
00:17:18
clear we are right at the beginning of
00:17:20
An Almighty rally that could take crypto
00:17:23
to Valhalla and given the result of the
00:17:26
US election there's no telling where
00:17:28
that rally could stop not only do we
00:17:31
have a pro Bitcoin president of the US
00:17:33
which is the world's largest economy but
00:17:36
the Republicans have control of the
00:17:38
Senate and the House of Representatives
00:17:40
this means there are now an overwhelming
00:17:42
number of pro crypto politicians across
00:17:45
all three major decision makers in the
00:17:47
US this all but guarantees that the US
00:17:51
will finally introduce positive
00:17:53
regulations that will allow the crypto
00:17:55
industry to thrive starting in 2025
00:17:59
what's more is that assuming Trump
00:18:00
sticks to his promises one of crypto's
00:18:03
biggest obstacles Gary Gensler will soon
00:18:06
be pushed out of his role as the
00:18:08
chairman of the SEC assuming that he
00:18:10
doesn't resign before then it's fitting
00:18:13
that his initials are literally GG
00:18:16
hopefully this means that the days of
00:18:18
pointless overreach and unclear guidance
00:18:20
are finally put in the past who knows we
00:18:23
might even finally get to learn what
00:18:25
defines a security and a commodity it
00:18:28
goes without saying that this will bring
00:18:30
more legitimacy to the crypto industry
00:18:32
which will attract new investors to the
00:18:35
space particularly the more traditional
00:18:37
investors who would normally rather play
00:18:39
it safe so to speak and this is
00:18:41
especially true when you consider that
00:18:43
BTC is now in price discovery mode which
00:18:46
is blowing up everyone's portfolio like
00:18:49
a balloon it's only a matter of time
00:18:51
before Outsiders want a piece of that
00:18:54
action and start going further down the
00:18:56
risk curve and this is where you guys
00:18:59
have already won the game you've managed
00:19:02
to front run every single one of them
00:19:04
especially when it comes to altcoins and
00:19:07
that's because once BTC tops out
00:19:10
investors will start the great rotation
00:19:12
into Els in order to maximize their
00:19:15
gains the fact that nobody believes it's
00:19:17
going to happen is just evidence of the
00:19:20
fact that if you watching this you're
00:19:22
early as Bitcoin dominance floats around
00:19:25
60% at the time of shooting it may be a
00:19:28
good idea to start planning your altcoin
00:19:31
rotation not Financial advice of
00:19:35
course okay that's all for today's video
00:19:38
guys uh but I'd love to get your
00:19:40
feedback so let me know down in the
00:19:42
comments where do you think Bitcoin is
00:19:43
going in the next few months H and of
00:19:47
course you enjoyed this video you know
00:19:48
what to do smash that like button
00:19:50
subscribe button and Bell icon too and
00:19:53
if there is someone you know who would
00:19:55
benefit from this video well why don't
00:19:57
you take a second to share it with them
00:20:00
as always thank you very much for
00:20:01
watching and I'll see you in the next
00:20:03
one this is Nick signing off
00:20:06
[Music]
