Recent figures show that despite bitcoin’s downturn in price, premiums in South Korea have diminished yet remain around ,800 to ,000 higher than BTC’s weighted global average price. Further metrics reveal that the South Korean won still ranks as the second most traded fiat currency against bitcoin, accounting for 2.07% of all spot bitcoin trades, […]
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Analyst Narrows Down Timeline For Bitcoin Peak This Bull Cycle
Rekt Capital a popular cryptocurrency expert has set aside the potential timeline that Bitcoin, the largest crypto asset is expected to peak in the ongoing bull cycle, citing historical price trends. Rekt Capital’s analysis examines the current price action of Bitcoin and how it aligns with previous bull cycle peaks following the Bitcoin Halving event.
Bitcoin Peak On The Horizon
Today, May 9, BTC’s price witnessed a drop below the ,000 price level, demonstrating a potential move on the downside. However, Rekt Capital is unshaken by this move as he believes the more Bitcoin consolidates between current price levels and ,000 following the Halving, this cycle will slow down and resynchronize with its regular historically recurrent Halving cycle. As a result, given the price movements of past trends, he expects BTC to see a bull market top between the middle of September and October next year.
Furthermore, he noted that due to Bitcoin’s current two-month consolidation period, the present rate of cycle acceleration has dropped from 260 days to 210 days.
The analyst highlighted that about 518 days after the Halving in the 2015-2017 cycle, BTC reached its market peak. Meanwhile, in the 2019-2021 bull cycle, it took the digital asset approximately 546 days after the Halving to top out.
Thus, in the event that BTC reiterates these trends and the next bull market top takes place between 518 and 546 days post-Halving event, Bitcoin’s peak this cycle might occur during the aforementioned timeframes. This is the reason why the expert is confident that the more time Bitcoin takes to stabilize, the better off it will be for bringing this cycle back in alignment with the customary Halving cycle.
Possible Retracement Before An Uptrend
While the analyst anticipates BTC to experience a retrace large enough to persuade investors that the bull market is over, he urges investors not to be shaken out as it will turn around eventually to resume its upward movement. According to Rekt Capital, fortunate investors understand that there are moments to panic and moments to accumulate and that the two often go hand in hand.
Currently, the price of Bitcoin is moving on the downside after a slight recovery on Wednesday. BTC’s price has now fallen close to ,700 as it was unable to break above ,500 once more.
Related Reading: Bitcoin Peak Pre-Halving Doesn’t Guarantee Further Gains: Analyst
At the time of writing, the digital asset in the weekly timeframe is demonstrating a positive momentum, while in the daily timeframe, it is trending on the downside. In the past week, BTC has increased by over 4% and has decreased by about 2.29% in the past day, trading at ,860.
Both the trading volume and market cap are also down by 2.45% and 2.20% respectively in the last 24 hours.
GBTC Discount Narrows to Zero; Experts Say Return of Premium to NAV Is a Possibility
The recently disappeared GBTC discount may be “a sign of industry maturing and the improved enterprise acceptance of bitcoin.” While some see the disappearance of the discount as pointing to the re-emergence of the premium to the net asset value (NAV), one expert said he sees “the continued parity or even a resurgence of the discount” as real possibilities.
The Impact of Spot Bitcoin ETF Approvals
On or around January 26, the discount to the net asset value (NAV) of the Grayscale Bitcoin Trust (GBTC) narrowed to zero for the first time in nearly three years. Since descending to 44% in June 2023, the discount has gradually shrunk and by Dec. 20, 2023, it had reached the single-digit figure of 7%.
According to Ycharts data, the last time the discount to the NAV was around zero was sometime around February 21, 2021. The gradual disappearance of the GBTC’s discount to NAV has been attributed to many factors including the spot bitcoin exchange-traded funds (ETF) approval speculation that gripped the crypto market for much of the second half of 2023.
Meanwhile, the disappearance of the discount has prompted some to predict the imminent return of the premium to the NAV. Others, however, have warned that this return to a premium is not a given because crypto assets like bitcoin are still volatile. They argue that the approval of spot bitcoin exchange-traded funds (ETF) alone will not change that.
Nevertheless, some experts, such as Mant Hawkins, the Core Contributor at Andromeda, see the disappearance of the discount as a sign of how far the crypto industry has matured. He cites the U.S. Securities and Exchange Commission (SEC)’s recent approval of spot bitcoin ETFs as proof of the extent to which cryptocurrencies like Bitcoin (BTC) are being adopted.
“I see the narrowing of the discount as a sign of the industry maturing and the improved enterprise acceptance of BTC. The BTC ETF approval decision, as welcome as it was, seems to be just one more slow turn of the adoption wheel,” Hawkins said.
The Return of the GBTC Premium
Another expert, Denis Petrovcic, co-founder and CEO of Blocksquare, said he does not rule out the market reacting to the disappearance of the discount by “pushing it to a premium we have not seen since 2020.” However, Petrovcic also concurred that crypto assets like BTC remain volatile, and not even the ETF hype can change this.
If indeed the GBTC’s premium is to return, Petrovcic said he foresees this ultimately gravitating to back NAV “to compensate for the ETF’s convenience and accessibility.”
Meanwhile, Zak Taher, the CEO of Multibank.io, indicated that he agrees with many of his peers’ views on what the disappearance of the discount likely means. However, Taher also told Bitcoin.com News that while a premium is a possibility, the “continued parity or even a resurgence of the discount are also potential scenarios.”
Andrey Stoychev, head of Prime Brokerage at Nexo explained that from an economic standpoint, one might suggest that the market has achieved a balance between the supply of and demand for GBTC shares. Hypothetically speaking, Stoychev said if inflows and outflows are equal, the present bitcoin price offers the most significant chance for profit realization in the past two years.
“With spot bitcoin ETFs approved, Grayscale investors have now been simply freed to realize gains,” Stoychev told Bitcoin.com News. “Fortunately, that selling pressure has been absorbed by newer market participants and investors, as evident from the disappearance of the GBTC discount. Predicting a meaningful premium is tricky; it depends on Bitcoin demand and industry-wide events, like the upcoming block rewards halving, that could shift supply dynamics and impact the GBTC discount.”
Stoychev added:
Arguably, right now, investors are spoiled for choice on how to gain exposure to Bitcoin. That field, dominated by the world’s leading asset managers, will possibly be characterized by miniscule margins and fierce price competition. Should this be the case, serious deviations toward a premium or discount for GBTC shares are unlikely without a significant, industry-wide event to disturb the markets and force investors into fear or greed.
Before dropping to zero in late February 2021, the digital asset investment product’s premium to NAV ratio had largely stayed above 10%. After the premium turned negative, the price of the GBTC stock also began to drop.
As shown by the data, the price of GBTC fell from one of its 2021 highs of just over to less than in December 2022. However, since then, the price has rallied. At the time of writing, one GBTC share was trading at just above . As of Jan. 30, 2023, GBTC’s BTC reserves are now under 500,000 at 496,573.81 BTC.
What are your thoughts on this story? Let us know what you think in the comments section below.
Grayscale’s Bitcoin Trust Discount to NAV Narrows Sharply to a 16.59% Gap
Grayscale’s Bitcoin Trust, known as GBTC, has witnessed a significant shift in its market dynamics. In January 2023, GBTC traded at a significant 48.31% discount to its net asset value (NAV). Today, that gap has narrowed to 16.59%, indicating changes in market sentiment and presenting potential implications for investors.
End of 2023 Sees GBTC’s Discount to NAV Tighten
The largest bitcoin (BTC) trust known as GBTC has seen a significant improvement in terms of its previous discount to NAV. Essentially, net asset value (NAV) serves as a financial barometer, indicating the per-share value of a fund’s underlying assets. In the context of GBTC, the NAV represents the value of BTC it holds, adjusted for liabilities, and divided by its outstanding shares. Simply put, it’s a measure of what each GBTC share should theoretically be worth based on bitcoin’s market value.
GBTC’s market price can deviate from its NAV, leading to either a discount or premium status. When GBTC trades at a higher price than its NAV, it’s at a premium. Conversely, if it trades lower than its NAV, it’s at a discount. This percentage difference provides insights into market perceptions and investor sentiment around GBTC. Since the end of February 2021, GBTC has traded at a discount to its NAV. Unlike traditional stocks, GBTC doesn’t offer an easy way to redeem shares for actual bitcoin, and shares are traded over-the-counter (OTC).
This structure can cause its market price to diverge from the underlying BTC value. External factors, such as investor sentiment, market speculation, regulatory news, and liquidity considerations, can further influence this price disparity. A 48.31% discount in January 2023 meant GBTC shares were trading significantly below the value of the bitcoin they represented. Investors could have been acquiring bitcoin exposure via GBTC at a bargain.
Fast forward to the present, and the discount has reduced to 16.59%, suggesting a change in market dynamics and a potential increase in demand for GBTC shares. The shrinking discount implies a potential positive shift in GBTC’s market sentiment. For investors, buying GBTC at a discount might seem like a lucrative deal, as they gain exposure to BTC at a reduced price. However, the future remains uncertain, and there’s no guarantee that the discount will continue to narrow at the same pace or even flip to a premium.
At the moment, Grayscale is fervently working to persuade the U.S. Securities and Exchange Commission (SEC) to transform GBTC into an exchange-traded fund (ETF). With a nudge from the judiciary, Grayscale has carved out a bit of wiggle room in this endeavor, but the outcome is still hanging in the balance. Simultaneously, the SEC is sifting through more than half a dozen spot bitcoin ETF proposals from industry giants such as Fidelity, Blackrock, and Franklin Templeton.
What do you think about GBTC’s discount tightening? Share your thoughts and opinions about this subject in the comments section below.
GBTC’s Discount Narrows Amid Bitcoin’s Downturn, But A Bullish Trend Is Coming?
The Grayscale Bitcoin Trust (GBTC) share price has again made headlines. Its premium or discount to Bitcoin’s net asset value (NAV), often viewed as an indicator of institutional sentiment towards the cryptocurrency, has displayed a notable trend recently, even amid the prevailing bearish atmosphere.
GBTC’s Evolving Price Dynamics
The phenomenon of GBTC’s share price inching closer to Bitcoin’s market price is worth noting. The correlation between the two has been historically significant, with price differences often shedding light on broader market sentiments.
According to data from CoinGlass, a renowned crypto monitoring platform, the GBTC shares were recorded trading at a 17.17% discount to the BTC/USD rate as of September 9th, the last update.
Such levels haven’t been witnessed since December 2021, highlighting a potentially shifting sentiment in the market. The so-called “GBTC Premium,” previously a surplus, has been a discount to the net asset value for a while now.
The shift was drastic at one juncture that the differences neared roughly 50% last November. Such variance has led to a divergence between GBTC’s performance and Bitcoin’s price strength, especially as Bitcoin revisits price zones it hasn’t seen in the past six months.
What This Could Mean For Bitcoin
The narrowing of GBTC’s discount isn’t just an isolated event. It paints a broader picture of potential market sentiment shifts and future movements.
Notably, a shrinking discount can be interpreted as a sign of growing institutional interest, as the GBTC serves as a prominent avenue for institutions to gain exposure to Bitcoin without directly holding the asset. If institutional interest is indeed on the rise, this could bode well for Bitcoin’s mid to long-term price outlook.
Nevertheless, Bitcoin is currently seeing a downtrend. The asset has plunged nearly 15% in the past month and 2% in the last 24 hours. As a result, its price has fallen below the recently established ,000 mark, trading at ,175 at the time of writing.
According to Cryptocon, a trader and analyst, Bitcoin might see a weaker performance this month as October often brings a turnaround and more decisive price action.
September is historically a pretty bad month for #Bitcoin, that’s just the facts.
October is historically very bullish.
But maybe, it’s November that will bring the turn around we need according to our performance since the halving dates.
To be… pic.twitter.com/Olg0XHVxKG
— CryptoCon (@CryptoCon_) September 11, 2023
This perspective aligns with a prevalent crypto community theory that marks November 28th as a quadrennial “bull run launch” for Bitcoin.
Featured image from iStock, Chart from TradingView
IEA Report: Oil Prices on the Brink of Soaring as Supply Narrows and Demand Shatters Records
The stage is set for a potentially striking upswing in global oil prices, as supply constricts and demand ascends to unprecedented levels. With oil reserves dwindling at a breakneck pace, OPEC’s spare capacity restrained, and powerhouse consumers like China and India snapping up record quantities of Russian crude at discounted rates, a confluence of these factors is signaling the likelihood of an enduring escalation in oil prices, the International Energy Agency (IEA) warns in its August report.
IEA Report Sheds Light on Skyrocketing Oil Demand in the Face of Production Slump
According to the IEA’s projections, the world’s thirst for oil is set to swell by 2.2 million barrels per day (mb/d), reaching a new peak of 102.2 mb/d in 2023. In stark contrast, OPEC+ saw its supply contract by 1.2 mb/d in July, plummeting to 50.7 mb/d, due to Saudi Arabia’s voluntary reductions. This downtick in production occurs as U.S.-led non-OPEC production inches up a mere 1.5 mb/d for the entire year.
Refineries are feeling the pinch, grappling to keep up, as margins for gasoline and diesel touch multi-month peaks. The depletion of crude and product stocks is accelerating, with OECD inventories falling over 100 mb below 5-year averages in July.
The IEA anticipates that stocks may plunge an additional 3.4 mb/d in the latter half of 2023 if OPEC+ sticks to its slashed output objectives. With the world’s cushion of spare capacity wearing thin, extra OPEC barrels will be vital to bolster refining operations.
In a significant move, U.S. president Joe Biden authorized the withdrawal of 180 million barrels from the nation’s strategic oil reserve in March 2022, depleting the stockpile to its most anemic levels since the 1980s. Yet, with oil prices stealthily climbing above a barrel, the Biden administration made a calculated decision to postpone replenishing the country’s vital strategic oil reserve.
Moreover, OPEC’s prudent stance implies that supplies might continue to be stretched thin. “If the bloc’s current targets are maintained, oil inventories could draw by 2.2 mb/d in [the third quarter] and 1.2 mb/d in [the fourth quarter], with a risk of driving prices still higher,” the IEA report states.
Much like the U.S., the United Kingdom finds itself with dwindling reserves and a reliance on imports. In terms of proven petroleum reserves, the U.K. is estimated to have a back-up of roughly four times its annual consumption. Europe’s oil supply has historically been sourced from various regions, but until 2021, Russia held the crown as the EU’s principal petroleum supplier.
The dynamic shifted dramatically, however, with the onset of the Russia/Ukraine conflict, leading to the U.S. supplanting Russia as Europe’s foremost provider of crude oil. In the meantime, an RT report further indicates that leading importers such as China and India are capitalizing on discounted Russian crude in record amounts, as Western sanctions redirect trade currents.
RT staff writers explain that Russia, having held onto its position as China’s primary supplier for half a year, accounted for a fifth of China’s June imports. India, too, sourced a staggering 45% of its June crude from Russia, maintaining it as the top provider for a full year.
The IEA’s study concurs with the RT report and notes, “Russian oil exports held steady at around 7.3 mb/d in July, as a 200 kb/d decline in crude oil loadings was offset by higher product flows.” It goes on to note, “Crude exports to China and India eased month-over-month but comprised 80% of Russian shipments.”
This combination of strained supplies, depleted reserves, and burgeoning Asian markets sketches an alarming scenario of looming price surges. As the global economy finds its footing, any proliferation of Russian crude sales to major importing nations could potentially magnify the peril. For the time being, the IEA alerts that the market teeters on the brink, dangerously skewed towards price amplification.
What do you think about the IEA’s latest report? Share your thoughts and opinions about this subject in the comments section below.
South Korea Narrows Down 11 Cryptocurrency Exchanges To Shut Down
The Financial Services Commission, the top financial regulator in South Korea, is supposedly staging a closedown for some cryptocurrency exchanges. This move is linked to allegations of fraud in these exchanges.
The first move from the FSC is to temporarily stop the operations of about 11 average South Korean crypto exchanges. Reporting on Sunday, The Korea Herald, a local news agency, claimed that the FSC move is based on some unclear operations by these exchanges.
Related Reading | Commercial Paper Reserves Of Tether Under Heavy Regulatory Scrutiny
The report has it that these exchanges all allegedly had fraudulent collective accounts and some illegal activities.
According to a news publication, while citing unknown industry sources, there are still no name disclosures of the exchanges. However, these exchanges are likely never going to get approvals for operations from the authorities.
From the news sources, the FSC will decline the operational approval for all the affected crypto exchanges. Furthermore, this South Korean financial regulator plans to enforce stricter regulatory actions on minor exchanges.
The news on the supposedly crash comes in the middle of the recent suspension of operations by some minor crypto exchange in South Korea. One of such suspensions is the announcement made by Bitsonic, a local cryptocurrency exchange, on Friday.
A post on its official Telegram channel said the exchange would make temporary operational discontinuation due to internal and external challenges.
Related Reading | Cardano Aims To Facilitate Users With Smart Contracts
Similarly, CPDAX, another smaller crypto exchange, said it would cease operation from September 1. Aforenow, Darlbit exchange had closed operations. This was after it suspended withdrawals and deposit services the previous month.
However, the FSC is yet to respond to its recent plans to crash these growing crypto exchanges.
Stricter Regulatory Measures For Cryptocurrency Exchanges in South Korea
Going by the recent trend of events, there has been stricter regulatory moves on crypto exchanges in South Korea. The country’s financial regulators mandated the full registration for all local crypto service platforms.
The cryptocurrency market has been flourishing for the past few days till today | Source: Crypto Total Market Cap on TradingView.com
In addition, the authorities gave them till September to establish non-fictitious trading accounts and recording systems. According to the report, customers’ real-name or non-fictitious accounts are part of the prerequisites to operate their businesses.
In line with its regulatory measures, the FSC is planning to ban cross-trading among crypto exchanges. The agency views it as illegal trade since it conceals the flow of transactions.
Cross trading is the means through which trading platforms buy or sell orders for an asset without a reflection in their order book. In addition, Cross-trading allows these cryptocurrency exchanges to earn trading fees. Thus, its banning will make a significant negative impact on their revenue stream.
Related Reading | Tether To Conduct An Audit To Negate Claims Concerning Transparency
Both the country’s average and minor crypto exchanges have been in a fix working by the instruction. For them, it’s not been easy trying to get approvals from the relevant authorities. However, the bigger shots like Coinone, Korbit, Bithumb, and Upbit get no daunt in the hurdle.
Also, the recent regulatory measures in South Korea spread to the larger crypto exchanges in the country. A report from Yonhap News reveals that the Seoul Metropolitan Police Agency on Monday called up an investigation case.
The case was an alleged fraud that connects Bithumb’s former chairman, the largest cryptocurrency exchange in the country.
Featured image from Pixabay, chart from TradingView.com
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