The crypto and innovative tech investment firm is confident that inflation will fall and the Fed will pivot in 2023.
Ark Invest CEO sees potential crypto rebound amid whiffs of a Fed pivot
Cathie Wood: Ark dumps 500K GBTC shares, adds Coinbase stock as Bitcoin recovers 40%
Ark’s GBTC weight in the portfolio actually increased despite the fund selling 500,000 shares in the past month.
‘Wall of worry’ led to digital wallets, blockchain tech ignored: Cathie Wood
Market uncertainty calls for an opportunity to take advantage of disruptive innovation which has historically “gained share during turbulent times,” says ARK Invest CEO.
Bitcoin clings to $17K as ARK flags ‘historically significant capitulation’
BTC price action is suffering from FTX, but decentralized blockchains are “as strong as ever,” says ARK Invest.
Cathie Wood’s ARK Invest adds more Bitcoin exposure as GBTC, Coinbase stock hit new lows
ARK Invest scoops up bargains as Coinbase shares hit all-time lows and GBTC trades at a near-50% discount to the already suppressed Bitcoin spot price.
Amid Macro Uncertainty, Bitcoin Stabilizes. Incredible October Stats Inside
The world is upside down. Is bitcoin stable now? Or is everything else extremely volatile all of a sudden? As the planet descends into chaos, bitcoin remains in a weird limbo that’s uncharacteristic of the asset and doesn’t seem to end. That’s both what it feels like and what the stats say. In the latest ARK Invest’s The Bitcoin Monthly report, they put it like this, “bitcoin finds itself in a tug of war between oversold on-chain conditions and a chaotic macro environment.”
What about the numbers, though? The stats support the thesis, “for the third month in a row, bitcoin continues to trade between support at its investor cost basis ($18,814) and resistance at its 200- week moving average ($23,460).” Three months in that range seems like too much. Something’s got to give. However, that’s what everyone’s been thinking for the last few months and we’re still here.
The Dollar Milkshake Theory
Bitcoin has been less-volatile than usual, sure, but the main factor here is that the whole world is falling to pieces. Every company is in the red, especially techy ones, and all of the world’s currencies except the dollar fell off a cliff. Are we seeing “the dollar milkshake theory” playing out in front of our own eyes? It sure feels that way. Global central banks have been printing bills like there’s no tomorrow, and that extra liquidity is there for the stronger currency to take.
According to professional investor Darren Winter, the “dollar milkshake theory views central bank liquidity as the milkshake and when Fed’s policy transitions from easing to tightening they are exchanging a metaphoric syringe for a big straw sucking liquidity from global markets.” If that’s what we’re seeing, what happens next? Back to The Bitcoin Monthly, ARK says:
“As macro uncertainty and USD strength have increased, foreign currency pairs have been impacted negatively while bitcoin has been relatively stable. Bitcoin’s 30-day realized volatility is nearly equivalent to that of the GBP and EUR for the first time since October 2016”
BTC price chart for 11/07/2022 on Bitstamp | Source: BTC/USD on TradingView.com
Bitcoin Vs. Other Assets In October
The macro-environment has been so bad lately, that there’s the perception that bitcoin has been doing better than stocks. The facts are that, for the first time since 2020, “bitcoin’s 30-day volatility is on par with the Nasdaq’s and the S&P 500’s.” And, we know past performance doesn’t guarantee future results, but “the last time bitcoin’s volatility declined and equaled the rising volatility of equitiy indices was in late 2018 and early 2019, preceding bullish moves in the BTC price.”
However, let’s not kid ourselves, bitcoin has not been doing good. The thing is, not much is prospering out there. Especially in the tech sector. “The price drawdowns from alltime high in Meta (-75.87%) and Netflix (-76.38) have exceeded that of bitcoin’s (-74.46%). To a lesser extent, Amazon also suggests a correction proportional to that of BTC’s “usual” volatility (-48.05%).”
According to The Bitcoin Monthly, the situation “suggests the severity of the macroeconomic environment and bitcoin’s resilience against it.”
The only constant is change, however. Bitcoin’s stability suggests a violent breakout, either up or down. The entire world can’t remain the red forever, something or someone has got to rise above the crowd and show everyone how it’s done. We’ve been waiting for a resolution for what feels like ages, and we’ll probably have to wait some more. There will be a movement, though. When we least expect it, probably.
Featured Image: Bitcoin 3D logo from The Bitcoin Monthly | Charts by TradingView
Bitcoin is now less volatile than S&P 500 and Nasdaq
A rare 2% daily loss for the U.S. dollar index gives Bitcoin and stocks an opportunity for gains, but BTC still undercuts the rest on volatility.
ARK Invest’s Cathie Wood Puts Bitcoin At $1 Million In 8 Years, Here’s Why
ARK Invest CEO Cathie Wood has been a long-time supporter of Bitcoin. The CEO had taken the bold step and become one of the first managers of a public fund to actually support the digital asset openly. ARK Invest had gone on to make some investments related to the cryptocurrency such as buying shares of Coinbase, the first crypto exchange to go public, and holding significant shares in the Grayscale Bitcoin Trust (GBTC). Now, the CEO has once more reiterated her belief in the long-term potential of the digital asset.
Bitcoin Headed To $1 Million
Over the last year, Cathie Wood has had some very bullish stances on bitcoin. This has seen the CEO reveal some very interesting forecasts for the digital asset. In 2021, Cathie Wood said that she believed the price of bitcoin was going to hit $500,000 in five years. This was when the bull run was in full swing and the digital asset had actually already hit multiple new all-time highs.
Despite the decline in the price of the digital asset since that time, the CEO is back once more to reiterate her bullish stance on the cryptocurrency. Speaking on the “What Bitcoin Did” podcast, Wood presented her bullish case for the digital asset once more.
According to the ARK Invest CEO, she believes that the bitcoin price will reach $1 million in 2030. Now, this is not the first time that Wood would be giving this exact forecast. Speaking at the Bitcoin 2022 conference in Miami earlier this year, Wood had given this exact same prediction. She explained that this is because institutions were starting to move into the market, which would give it the push it needed to beat such prices.
BTC recovers to mid-$19,000s | Source: BTCUSD on TradingView.com
Major Reasons For This
In the past, Wood has said that her firm believes that the entrance of institutional investors into bitcoin would be the main driving force behind its price. Back then, Wood explained that even if just 5% of institutional money were to move into the digital asset, it would surpass the $500,000 level, which she believes would happen by 2030.
Another reason given for this is the protection that bitcoin provides to investors. Over the years, there have been impacts on accumulated wealth on the part of investors due to the increase in inflation. Wood says bitcoin has become an insurance policy for investors worldwide, which is why she believes it is going to a million dollars.
“My background is both economics and finance. So I feel very confident in what I’m saying: this is the first global private, meaning no government oversight, digital rules-based monetary system. When I’m explaining it like that I ask everyone to listen to each of those words, each one of them is very important. This is one of the most profound innovations of our time.”
Wood is not the only one at ARK Invest who seems convinced of the growing power of bitcoin. The CEO explained that the price target is from the research arm of ARK Invest which has taken many factors into account before coming up with this number.
Featured image from Barron’s, chart from TradingView.com
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Bitcoin Monthly Stats: Cost Basis, Long-Term Holders, And The Cyclical Bottom
In this month’s The Bitcoin Monthly, ARK Invest focused on Ethereum and the Merge. As a side dish, they did publish some premium and review-worthy stats that we’re about to cover. Never mind the market, the Bitcoin network keeps producing block after block regardless. The stats that this whole activity produces can be critical in understanding the market, though.
That’s where ARK Invest’s The Bitcoin Monthly comes in. The publication defines itself as “an “earnings report” that details on-chain activity and showcases the openness, transparency, and accessibility of blockchain data.” So, the data we’re about to cover is The Bitcoin Monthly’s reason to be.
The Bitcoin Monthly: 200-Week Moving Average And Investor Cost Basis
- “After closing above its 200-week moving average in July,1 bitcoin’s price reversed and slipped below it in August. Currently at $22,680, the 200-week moving average now seems to be resistance.”
The center couldn’t hold. The price’s recovery was short-lived. Markets are red across the board and bitcoin is no exception. At the time of writing, bitcoin trades at $19,874. For those keeping score, that’s just below last cycle’s all-time high of $20K. Something that shouldn’t happen, but a few degrees of error are always understandable.
- “Bitcoin currently trades above investor cost basis at $19,360, its strongest on-chain support level (…) Importantly, throughout bitcoin’s history, trading at investor price usually marks a bottoming process.”
Times are tough, but bitcoin still trades above investor cost basis. The Bitcoin Monthly clarifies, “Investor price is calculated by subtracting the cost basis of miners from the general cost basis of the market.” As we see it, The Bitcoin Monthly is calling the bottom. They didn’t say it in those exact words, but they certainly insinuated it.
Is the bottom really in, though?
BTC price chart for 09/17/2022 on Gemini | Source: BTC/USD on TradingView.com
The Bitcoin Monthly: Short-Term Holder Vs. Long-Term Holder
- “The short-term-holder (STH) cost basis is approaching its longterm-holder (LTH) cost basis ––an event that has marked cyclical bottoms in the past. (…) Since the end of July, the difference between short- and long-term holders’ cost basis has shrunk from $5,840 to $2,500”
The Bitcoin Monthly sees it as a sign that “the market typically is capitulating and shifting back to long-term participation.” Bitcoin’s consolidation process might be ending soon. We could stay for a while in the bottom area, though. That has happened before. The point is, all of the indicators The Bitcoin Monthly highlighted this month point in the same direction. To the bottom.
- “The supply held by long-term bitcoin holders is 34,500 coins away from reaching 13.55 million– its all-time high. Long-term-holder supply constitutes 70.6% of total outstanding supply.
This one is the most bullish of all the featured stats. To clarify, coins that haven’t moved in 155 days or more qualify as “long-term holder supply.” The tourists and the people with high hopes left a long time ago. And the lion’s share of the bitcoin supply is now in the true believers’ possession. A remarkable situation that doesn’t get mentioned enough.
About The Ethereum Merge
- “In August, ether outperformed bitcoin by 7.6% (…) Historically, ether has outperformed bitcoin during “riskon” bull markets and underperformed during “risk-off” bear markets.”
The merge’s effects affected the market throughout the whole narrative. Even though we’re in a “risk-off bear market,” ETH took over and lead the market for a while there. They accomplished the mythical feat and… the market turned on them. After what seemed like mission accomplished, ETH’s price started to bleed.
Hidden behind a secret door, that’s what The Bitcoin Monthly contained.
Featured Image by Maxim Hopman on Unsplash | Charts by TradingView
Summary Of The Contagion Event That Brought On The Bear Market
Are we in a bear market? Opinions vary, but it certainly feels like one. Markets across the board and across the world are in the red, and the bitcoin and crypto ones are no exception. If you’ve been paying attention, you know how all of this happened, but a refresher course wouldn’t hurt. Using ARK Invest’s latest Bitcoin Monthly report as a guide, let’s go through the tragic sequence of events and evaluate the bitcoin market as it stands.
According to ARK, the road to the bear market went like this:
“Beginning with the Terra collapse in early May, contagion spread to major crypto lenders including Blockfi, Celsius, Babel, Voyager, CoinFlex, contributing to the insolvency of the once highly-respected hedge fund, Three Arrows Capital (3AC). Since Terra’s collapse, total crypto market capitalization has dropped ~$640 billion.”
Nevertheless, there seems to be a light at the end of the tunnel. “Promisingly, however, recent fallout (Babel, Voyager, CoinFlex, Finblox) appears lower in magnitude compared to Terra, Celsius, and 3AC.” That doesn’t mean the end of the bear market is near, nor that capitulation is already over. Especially if the Mt. Gox victims receive the rumored 150K BTC.
First, let’s follow ARK as they analyze two of the main players in this drama. Then, let’s check the stats of the bitcoin market to see if we can find signs and clues that point out to the end of the capitulation stage. SPOILER ALERT: The jury is still out on that one. Some signs point to an early end, others to further downside. Aren’t bear markets fun?
Celsius And The Bear Market
When Terra fell, the earth trembled. The Luna Foundation Guard sold nearly all of their 80K BTC reserve trying to defend the UST peg to the dollar. This event could’ve been the catalyst for the bear market. The worst was yet to come, though. Several once-respected institutions were heavily exposed to Terra through its Anchor protocol, and the UST collapse sent them all into a still ongoing death spiral.
According to ARK, “Celsius froze withdrawals on June 12th in response to significant outflows. Its DeFi debt outstanding is $631 million but the magnitude of its nonDeFi exposure is unclear.” There was still hope for its clients, as the company paid several loans. However, Celsius filed for Chapter 11 bankruptcy, leaving them all high and dry.
What really happens to the coins you deposit to reputable lending platforms. pic.twitter.com/RQh7jfrrNZ
— softsimon (@softsimon_) July 13, 2022
The Chief Commercial Officer at Choise.com, Andrey Diyakonov, analyzed the situation for NewsBTC:
“To put things into perspective, we need to turn it upside down, and ask, how much of the recent price action on the markets was influenced by or outright created by Celsius’ actions? What goes around always comes around. It’s so much more ironic given those credible reports that Celsius withdrawals were among those that sent UST and Terra position down the rabbit hole to find out where the bottom is.”
Our team covered that particular claim and the company’s response.
Three Arrows Capital And The Death Spiral
Then, there was “Three Arrows Capital (3AC), a highly regarded crypto hedge fund reportedly managing $18 billion at its peak, appears to be insolvent after taking on too much leverage.” That’s according to ARK, who also says, “Seemingly, 3AC took on excess leverage to try and recover the losses. Its creditors included major players in the industry like Genesis, BlockFi, Voyager, and FTX.”
All of those companies except FTX seem to be counting down to extinction.
BTC price chart for 07/15/2022 on Velocity | Source: BTC/USD on TradingView.com
Is The Bear Market Just Beginning Or About To End?
Is the bottom in? Opinions vary. In a section titled “Market Contagion Sets Bitcoin Into Capitulation,” ARK analyzes all of the indicators and can’t reach a final conclusion. The numbers are extremely interesting, though.
- “Down 70% from its all-time high, bitcoin is trading at or below some of its most important levels: its 200-week moving average, the general cost basis of the market (realized price), the cost bases of long-term (LTH) and short-term holders (STH), and its 2017 peak.”
This “suggests extremely oversold conditions,” which is a great sign. However…
- “Historically, global bottoms occur when the MVRV of short-term holders exceeds the MVRV of long-term holders. That condition has not been met, suggesting the potential for more downside.”
The “condition has not been met,” but it’s close. Very close.
- “This month, miners generated revenues only 45% of that for the last twelve months, breaching a threshold that usually correlates with market bottoms.”
Miners who didn’t practice proper risk management have been selling at the present low levels. Miners who know what they’re doing will keep holding until we come out of the bear market. The question is, how many companies are in the first group and haven’t sold just yet?
- “Net realized losses in bitcoin recently reached a 2-year low, breaching 0.5% for only the fourth time since 2013.”
Historically, this suggests capitulation is over. Or is it?
- “Bitcoin’s net unrealized loss has hit a 3-year low, highlighting that its current market value is nearly 17% lower than that of its aggregate cost basis. Historically, global bottoms have formed when losses hit 25%+.”
If we’re going to reach 25%, that means there’s still a long way to go.
Is the bear market just beginning or about to end? The data is unclear. But capitulation seems to be nearing its end, which would be the first step in the right direction.
Featured Image by Marc-Olivier Jodoin on Unsplash | Charts by TradingView
ARK Invest ‘neutral to positive’ on Bitcoin price as analysts await capitulation
ARK argues that bearish continuation has limited room left to run, as on-chain indicators bottom out.
ARK: “Bitcoin’s Correlation With The S&P 500 Reached” ATH, Opportunity Knocks
This counterintuitive thinking by ARK Investment is the reason why we subscribe to their “The Bitcoin Monthly” report. While everybody complains about bitcoin’s dance in unison with the stock market, they keep it cool and even frame it as an opportunity. Which it is. It’s not ideal that traders treat bitcoin like a risk-on asset, but there’s certainly logic behind it. Short-sighted people see bitcoin as an investment vehicle and little else.
Excited to introduce the first official issue of “The Bitcoin Monthly”
Starting this month, ARK will be publishing an in-depth report covering Bitcoin’s market action and sharing where we think the market's headed.
Here are the major highlights from this month’s report:
— Yassine Elmandjra (@yassineARK) June 3, 2022
In our first article about “The Bitcoin Monthly,” we defined it as:
“Over at Twitter, ARK Analyst Yassine Elmandjra described “The Bitcoin Monthly” as: “Starting this month, ARK will be publishing an in-depth report covering Bitcoin’s market action and sharing where we think the market’s headed.” On ARK’s website, they describe the new venture as: “Considering the market’s fast pace of change, ARK publishes The Bitcoin Monthly, an “earnings report” that details relevant on-chain activity and showcases the openness, transparency, and accessibility of blockchain data.”
BTC p- S&P500 Correlation | Source: “The Bitcoin Monthly”
ARK On Bitcoin’s Correlation With The S&P 500
When the Russia/ Ukraine conflict started, it seemed like bitcoin was not in synch with traditional markets anymore. However, the tide quickly turned. By May, “Bitcoin’s correlation with the S&P 500 reached an all-time high of 80%.” The previous ATH was way back in October 2020, near that magical time when bitcoin woke up from a hundred years’ nap to pass the $20K line for the first time.
"If your time horizon is one month, Bitcoin looks like a volatile asset. If your time horizon is 10 years, it looks like a risk-off store of value."
– @saylor
I couldn't agree more.
— Dr. Jeff Ross (Pleb counselor) (@VailshireCap) June 15, 2022
So, what’s ARK ‘s take on the situation? Well…
“Based on fundamentals, we believe bitcoin and most equities should not be highly correlated, highlighting a potentially significant market inefficiency.”
A “significant market inefficiency” is an investor’s wet dream. It means that you’re seeing something that the market’s not. It means opportunity. If you play your cards right, it could mean money. How to use that “significant market inefficiency” in your favor, that’s another question altogether. Take into account that “Bitcoin still faces an uncertain macro environment, as the global economy shows signs of a recession,” though.
Let’s also take into account these recent words by MicroStrategy’s Michael Saylor, “If your time horizon is one month, Bitcoin looks like a volatile asset. If your time horizon is 10 years, it looks like a risk-off store of value.” Apparently, bitcoin traders suffer from high time preference. And that probably explains the correlation with the S&P 500.
BTC price chart for 06/16/2022 on Binance | Source: BTC/USD on TradingView.com
Arcane Research Weights In
ARK isn’t the only game in town. Our friends at Arcade Research have the most recent information regarding bitcoin’s correlation with the S&P 500, “BTC followed U.S. markets closely on Friday and, in extension, also during this weekend. However, as prices plummeted, new ghosts emerged, and the dangers of impactful insolvencies have contributed to further drag on the crypto market,” they say in “The Weekly Update’.”
When Arcane Research says “ impactful insolvencies,” they certainly refer to the Celsius case.
“While the crisis in Celsius has contributed to putting a further drag on the market, the initial catalyst was the inflation surprise in the U.S. We note a decline in the 90-day correlation between BTC and S&P 500. However, short-term correlations grew heavily following Friday’s inflation news – with the market preparing for more hawkish policies enacted by the FED.”
The fact of the matter is that bitcoin’s price is determined at the edges of the network. And high time preference people are trading there. And if they want to treat bitcoin as a risky asset, there’s nothing anyone can do about it. Except, somehow, taking advantage of the opportunity it brings.
Featured Image by Sergei Tokmakov Terms.Law from Pixabay | Charts by TradingView and “The Bitcoin Monthly”
ARK: Now Decoupled From Terra, “Bitcoin’s Selling Pressure Should Subside”
The Terra / Luna / UST collapse keeps on generating headlines. This time, we’ll use the data in ARK’s “The Bitcoin Monthly” report to establish its impact on the bitcoin ecosystem. Remember that the non-profit organization LFG, AKA as the Luna Foundation Guard, was accumulating BTC to defend UST’s peg to the dollar. In a then-delated May interview, Terra’s Do Kwon said that they were trying to get to $1B in BTC so that “besides Satoshi, we will be the largest single holder of Bitcoin in the world.” He also proclaimed, “within the crypto industry, the failure of UST is equivalent to the failure of crypto itself.”
Related Reading | Terra Beats Tesla As Second-Largest Corporate Bitcoin Holder After $1.5B Purchase
At one point, it appeared that BTC and UST destinies were inextricably linked, but the bitcoin network absorbed the collapse nearly unscathed. Let’s look at ARK’s numbers and try to figure out how it did it.
Terra, The Largest L-1 Blockchain Failure Ever
At this point, everybody knows what happened with Terra. Nobody knows how it happened, though. Was it a coordinated attack or did the natural market’s forces trigger the death spiral event? We wouldn’t know, but the fact of the matter is that the UST de-pegged from the dollar causing a bank run in the Anchor protocol, and the eventual demise of the algorithmic stablecoin and its twin, LUNA.
How big was the collapse? According to ARK’s report:
“In addition to causing the crash in UST and Luna, we believe Terra is the largest layer-1 blockchain failure in crypto history, wiping out a combined $60 billion of market capitalization between UST and Luna.”
Huge in size by any metric, but, how does it compare to previous crypto collapses? The only comparable collapse was “the Mt. Gox hack that stole 5.7% of total crypto market cap in 2014, Terra’s collapse destroyed roughly 2.7% of crypto’s total market capitalization.” The Mt. Gox hack almost destroyed the bitcoin network at a time when it was more vulnerable. The Terra collapse felt like a breeze in comparison, but, as the numbers show, it wasn’t.
BTC price chart for 06/07/2022 on Eightcap | Source: BTC/USD on TradingView.com
How Did The Terra Collapse Affect BTC?
Besides the LFG foundation reportedly selling its 80K BTC, the collapse created extreme selling pressure on bitcoin. According to the report, “exchanges recorded net inflows of 52,000 bitcoin, the largest daily inflow in BTC terms since November 2017 and the largest inflow ever in USD terms.” These are notable numbers.
Bitcoin Net Flows To and From Exchanges | Source: ARK’s “The Bitcoin Monthly”
According to the bitcoin blockchain, the account associated with “LFG currently holds 313 BTC, down from 80,934 BTC held prior to Terra’s unraveling”. Did they sell the rest, though? Nobody knows for sure. Back to the report:
“To backstop UST’s peg, The Luna Foundation Guard (LFG) reportedly sold most of its ~80,000-bitcoin reserves, contributing to this record inflow.”
Surprising even hardcore bitcoiners, the network resisted this massive sell-off without breaking a sweat. Sure, bitcoin’s price suffered, but the blow wasn’t even close to being fatal. And ARK’s prediction reflects that fact, “now decoupled from the Terra blockchain, bitcoin’s selling pressure should subside, yet contagion in the crypto markets is still inconclusive.” Why? Because “bitcoin’s more secure and conservative blockchain should gain market share.”
Are Algorithmic Stablecoins Even Possible?
To answer this we’ll quote NYDIG’s report “On Impossible Things Before Breakfast,” which comes with the subtitle, “a post-mortem on Terra, a pre-mortem on DeFi, and a glimpse of the madness to come.” As the titles gave away, NYDIG believes that not algorithmic stablecoins nor DeFi as it currently stands are possible. Why? Well…
“No matter how well intentioned, all algorithmic stablecoins will fail and the vast majority – possibly all – of DeFi’s current versions will fail, where “fail” here means not gaining sufficient critical mass to matter, being hacked, blowing up, or being altered by regulation to the point of non-viability. In the end, the Terra project could control the supply of its money, but it couldn’t make its people value it. A printing press was the only (non)answer. Sound familiar? Lacking a lender of last resort, DeFi (re)creates the problems solved by central banks. Bitcoin solves the problems created by central banks.”
Related Reading | TerraLabs Sold Over 80,000 BTC To Rescue Its Stablecoin
As it usually happens, we could summarize this whole article with the old adage: “Bitcoin fixes this.”
Featured Image by Louis Maniquet on Unsplash | Charts by TradingView
ARK Invest: Despite The 9 Red Candles, “Bitcoin’s Fundamentals Remain Strong”
The inaugural edition of ARK ’s “The Bitcoin Monthly” report contains some gems. It also contains a simple compilation of facts that paint a clear picture of the bitcoin market as it currently stands. A blockchain is an unalterable fountain of evidence, and ARK put their best analysts to review it in-depth and get stats and insights for us. Get some coffee and take a seat, let’s forget about the Fear & Greed index and see what the numbers are really saying.
Excited to introduce the first official issue of “The Bitcoin Monthly”
Starting this month, ARK will be publishing an in-depth report covering Bitcoin’s market action and sharing where we think the market's headed.
Here are the major highlights from this month’s report:
— Yassine Elmandjra (@yassineARK) June 3, 2022
Over at Twitter, ARK Analyst Yassine Elmandjra described “The Bitcoin Monthly” as: “Starting this month, ARK will be publishing an in-depth report covering Bitcoin’s market action and sharing where we think the market’s headed.” On ARK’s website, they describe the new venture as: “Considering the market’s fast pace of change, ARK publishes The Bitcoin Monthly, an “earnings report” that details relevant on-chain activity and showcases the openness, transparency, and accessibility of blockchain data.”
Related Reading | Bitcoin Price Closes Two Consecutive Weekly Red Candles, First Time Since Bottom
Let’s check the data and insights available in May’s edition.
The State Of The Bitcoin Market, With ARK
According to “The Bitcoin Monthly”:
- “Bitcoin closed the month of May down 17.2%, declining from $38,480 to $31,835.”
Let’s be honest, this looks like the beginning of a bear market. And the Terra/ Luna crash appears to be the catalytic event. However, subsequent data will show that we might not be in one after all.
- “Bitcoin closed the month down 17.2%, printing its ninth consecutive negative weekly decline for the first time in history, suggesting a possible oversold condition.”
Nine consecutive red candles, a new record. That’s a horrific fact no matter how you dress it. However, according to ARK, it suggests “a possible oversold condition.” Which is promising.
- “Bitcoin is down 57% since reaching an alltime high in November 2021. For perspective, the average peak-to-trough drawdown during previous bear markets stands at 76%.”
Does this mean things could get worst? Or does it mean we’re not near bear market levels? It definitely feels bear-markety, but the stats are the stats.
BTC price chart for 06/04/2022 on Exmo | Source: BTC/USD on TradingView.com
The Bitcoin Network Stands Strong
- “Despite the continued sell-off, bitcoin has not broken below any major trendline. It is trading above its onchain cost basis at ~$24,000 and its 200- week moving average at ~$22,000.”
The bitcoin network absorbed Terra/Luna’s massive sell-off and the market’s subsequent one like a champ. The worst seems to be behind us and bitcoin “has not broken below any major trendline.”
- “An all-time of nearly 66% of bitcoin’s supply has not moved in over a year, a testament to the market’s longer-term focus and a holder base with stronger conviction.”
Despite the massive market movement, bitcoiners keep HODLing like it’s the only chance at economic freedom that they’ll see in their lifetimes. Because it is.
- “Short-term holder positions fell -35% below their breakeven price, on average.”
If bitcoiners are HODLing, who’s selling all those cheap sats? Short-term holders, that’s who. And they’re not even close to breaking even. It’s a short-term holders massacre out there.
ARK Sees A Way For The Market To Jumpstart Itself
Look, hear ARK out. First of all, “bitcoin’s open interest in the futures market has reached an all-time high of approximately 450,000 BTC.” Also, “perpetual contract basis typically hints at market direction. Currently, it is trading at a bullish discount to spot.” This is very important because, “given the high open interest outstanding, we believe the perpetual futures discount indicates a potential upward trajectory in BTC’s next major price movement.”
Related Reading | Revisiting Dorsey’s Hyperinflation Tweet: Elon, Wood, Saylor, Balaji, Chip In
That’s right, ARK closes “The Bitcoin Monthly” report predicting “a potential upward trajectory.”
Featured Image by Ricardo Gomez Angel on Unsplash | Charts by TradingView
Cathie Wood’s Ark Invest dumps PayPal favoring Bitcoin-friendly Cash App
Wood believes that Venmo is merely a follower of Cash App, which has generated more than double Venmo’s revenue from almost half the number of users.
Bitcoin risks final ‘bear market capitulation’ as rich investors continue BTC selloff — analyst
But more inexperienced investors have been choosing to become long-term Bitcoin holders, limiting sell-side risks below $30,000.
Cathie Wood’s ARK Invest Puts Bitcoin At $1 Million By 2030
Investment firm ARK Invest has revealed its bullish outlook for bitcoin. It is not the first time that the company would be taking such a bullish stand on the digital asset. But it is the first time that it is putting the price of the cryptocurrency at such a high price point. This comes following the recent market crash that saw bitcoin lose about 50% of its all-time high value but this has done nothing to deter the firm from seeing a largely successful future for the digital asset.
Bitcoin At $1 Million
The latest prediction from the investment firm came in a recently published report that held a particularly promising outlook for the blockchain and the technologies that surround it. This included the application of public blockchains, of which the report put forward that bitcoin was the “most profound application” of this.
Related Reading | Bitcoin Inflows Suggest Institutional Investors Are Moving Back Into The Market
For the value of bitcoin itself, the points expressed in the report held closely to that of its leading figure, Cathie Wood. Wood had earlier said that she believed that the price of bitcoin would hit the $500,000 mark in the next five years, propelled forward by institutional investors moving just 5% of their portfolios into the digital asset. The report suggested that they believed this number would double in the following half a decade, putting its price at $1 million by 2030.
BTC resumes another downtrend | Source: BTCUSD on TradingView.com
Citing market research carried out by the firm, it put the growth rate of bitcoin in the next decade at 25-fold, saying that the digital asset possessed significant appreciation potential over this time period.
“According to our research, Bitcoin’s market capitalization could scale more than 25-fold in the next decade, with each exceeding $1 million in value,” the report read.
Where Does Ethereum End Up?
Bitcoin was not the only digital asset that received much praise and positive outlook in this report. As stated above, the report’s stance on the market, in general, was gleaming and Ethereal was no different in this regard.
Ethereum which has been one of the fastest-growing crypto projects has been put forward as being a valuable investment option going forward and ARK Invest does not disagree. It put the second-largest cryptocurrency by market cap at a whopping $20 trillion market cap by 2030.
Related Reading | Goldman Sachs: Mainstream Adoption Won’t Boost Bitcoin Price
Given that this time frame is less than a decade away, it means that the digital asset would have to grow at least 7,000 times from the current market value to hit this valuation. However, ARK Invest remains confident in the digital asset’s ability to appreciate due to its dominance on financial services existing on the blockchain.
If ethereum does reach the $20 trillion market cap, then the asset’s value would rise to around $170,000-$180,000 apiece. Still less than half of bitcoin’s expected valuation by the firm, but a growth rate that would rival even the best of the best in any financial market.
Featured image from Blockchain News, chart from TradingView.com
ETH to hit $20 trillion market cap by 2030: Ark Invest
ARK Invest’s new report predicts Ether’s market cap will reach $20 trillion and the Bitcoin price will exceed $1 million by 2030 based on BTC’s use cases and how ETH captures market share from TradFi.
ARK Invest: Why Bitcoin Could Be Worth $1 Million Per Coin By 2030
ARK Invest, the brainchild of savvy investor Cathie Wood, has had a rough go over the past few months. The flagship fund ARKK is down nearly 60% from it’s record high last year, however Wood and her team of analysts aren’t stopping their full-focus on innovative and forward-thinking investments – even when fundamental investments are running the show.
This week was host to ARK’s ‘Big Ideas Summit,’ and ARK crypto analyst Yassine Elmandjra supplemented that material with a boisterous bitcoin tweet that will be music to BTC maxi’s ears.
Cathie Wood & ARK Invest: Notorious Bulls
Elmandjra’s tweet, which can be found below, showcases how a single BTC unit could hit $1M in value, with a couple prime assumptions:
The price of a single bitcoin could exceed $1 million by 2030.
We are still early. pic.twitter.com/rvja2h2vi5
— Yassine Elmandjra (@yassineARK) January 25, 2022
Let’s take a look at that graphic specifically to drill down on the assumptions being made here, and why they’re important:
The core key assumption here, of course, is the staggering growth in bitcoin’s market cap over the next 9 years. In this model, the ARK team is projecting growth from a current market cap of $1.1T to a $28.5T market cap. How does this scale? According to an October 2021 report from securities trade group SIFMA, the U.S. equity markets carry a market cap around $50T – making a $28.5T market cap for a global bitcoin market seem not all that unreasonable. Elmandrja’s graphic also states anticipated breakdown of the use case allocated within the market cap, and it’s representative contribution towards the price per BTC.
Related Reading | Bitcoin Recovers From Seven Month Low Of $33K
ARKK, the flagship innovation fund behind ARK Invest, has had a difficult year following strong success. Can growth stocks and innovative investments turn around? | Source: NYSE: ARKK on TradingView.com
More From The Research Desk…
Elmandrja and the ARK Invest team continue on to note that even assuming a $28.5T market cap could be more conservative than ambitious. Elmandrja added, “If Bitcoin does hit $1 million, it will still only represent a fraction of global asset values” and also highlighted the notorious ‘diamond hands’ that bitcoin holders often exhibit, stating that “market participants are maturing and remain long term focused. Aggregate cost basis (realized cap) is at all time highs and more than 13.5 million btc are held by long-term holders.”
This, of course, isn’t likely anything groundbreaking to those who have studied the bottom-line extensively. Compared to other relative global markets, a $28.5T bitcoin market cap today would even be trading at multiples less than comparable markets, such as the global real estate market, global bond market, or global equities market.
Elmandrja’s full thread is a worthy read for these reasons and several others that take deep dive into ARK’s optimism around bitcoin (and crypto at large) as an investment vehicle. You can also read their broader Big Ideas 2022 report here.
Related Reading | Bitcoin Whales Take Advantage Of Market Crash To Gobble Up Millions In BTC
Featured image from ark-invest.com, Charts from TradingView.com
The writer of this content is not associated or affiliated with any of the parties mentioned in this article. This is not financial advice.
ARK Invest CEO Cathie Wood On What Will Drive Bitcoin Correction
The price of bitcoin continues to struggle and investors look towards various indicators to know when the price of the digital asset would begin to correct once again. While some indicators have shown promise in predicting what may yet come, it remains a guessing game as bitcoin has always been known to have a mind of its own when it comes to price movements.
To this end, Cathie Wood, famed CEO of ARK Invest, has shared some interesting thoughts around the market correction and what will drive it. The bitcoin bull continues to look towards the crypto market through a positive lens as she shares what will bring about the market correction.
Related Reading | Bitcoin Discount? Peter Brandt On Why You Shouldn’t Buy The Dip
Crypto Market Succumbs To Strike Against Technology
The whole of the crypto market is built on the back of new technology and as such, will sometimes follow technology trends in the broader market. ARK Invest CEO Cathie Wood posits in a new video on the ARK Invest YouTube channel that this is what is behind the recent crashes.
Basically, there has been a strike against technology, growth, and innovation in the equity markets and the spillover of this strike is what brought down prices across the crypto market. However, the CEO does not expect this strike to last long.
Related Reading | Galaxy Digital CEO Mike Novogratz Says Bitcoin Has Hit The Bottom
Addressing the concerns about technology and innovation stocks being in a bubble, the CEO discounts this theory. Instead, explaining that these stocks are merely in what she refers to as a “deep value territory.”
Wood is known to take risky bets on technology and innovation assets, which have paid off in the long run for her fund, as well as her clients. For the CEO, Bitcoin falls into this territory and has been vocal about her support for the digital asset.
She also predicts a highly profitable future for tech and innovation assets, expecting a 10x growth in the next 10 years.
“Based on the last eight years of our research, the opportunities will scale from $10-12 trillion today, or roughly 10% of the global public equity market cap, to $200+ trillion during the next ten years.”
Where Is Bitcoin Headed?
The new year is now in full swing and the implications of the holiday spending have been showing on the markets. Bitcoin which hit its all-time high of $69K last year has since lost over 30% of its value. The price is not in the $41,000 range, where it continues to struggle as bears try to pull it down.
BTC trading north of $41K | Source: BTCUSD on TradingView.com
For Cathie Wood, it has always been about the long game. Last year, the CEO, at various times, said that she expects the price of bitcoin to grow 10x from its value at the time. She attributes this growth to institutional investors finally moving at least 5% of their portfolios into the digital asset, at which point, bitcoin’s price will grow as high as $500,000 apiece.
Featured image from Page One, chart from TradingView.com
