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"Bitcoin reclaiming its all-time high yet again shows it is never going away," said Alex Thorn, head of research at Galaxy Digital. Catalysts driving the surge in the cryptocurrency include the U.S. spot bitcoin ETFs that started trading earlier this year, along with the tightening bitcoin supply ahead of the late April "halving." "The odds have always been against bitcoin," Thorn said, citing naysayers who have referred to it as "a bubble" and compared it to the "tulip mania" in Holland during the 1600s. "Retail interest is oftentimes momentum driven, and all-time high levels are a pivotal momentum driver for even more investment," he told CNBC. Nevertheless, U.S. spot bitcoin ETFs have brought legitimacy to it and been hugely popular, with BlackRock's iShares Bitcoin Trust (IBIT) passing $10 billion in assets under management last week.
Persons: Jaap Arriens, FTX, crypto's Lehman, Alex Thorn, bitcoin, Clara Medalie, Thorn, naysayers, Needham, John Todaro, Crypto, BlackRock's Organizations: NurPhoto, Getty, Metrics, Galaxy, CNBC, Securities and Exchange Commission Locations: U.S, Holland
A similar notice for the iShares Bitcoin Trust came on June 8, one week before BlackRock's filing for a bitcoin ETF. The price of ether jumped Thursday, topping the key $2,000 level for the first time since April, after BlackRock took initial steps toward filing for a spot ether ETF. Other crypto assets as well as crypto equities rode the bitcoin price wave Thursday. Meanwhile, shares of bitcoin miners rode the bitcoin wave too. Don't miss these stories from CNBC PRO:Correction: The price of bitcoin topped $37,000 for the first time since May 2022.
Persons: Clara Medalie, Ether, bitcoin, Solana, Darius Tabatabai, Gary Gensler, Microstrategy, CleanSpark, , Jesse Pound Organizations: Delaware's Division, Corporations, BlackRock, Metrics, Cardano, SEC, CNBC, Marathon, Iris Energy Locations: Coinbase
Thin liquidity and big playersCrypto "market depth" has been sitting at very low levels this year. Market depth is a measure of liquidity in a market. According to data firm Kaiko, bitcoin's market depth has fallen 20% since the start of this year. Low liquidity, which has been a feature of the crypto market all year, is also partly behind bitcoin's 80% year-to-date rally. "I think trading volumes and price volatility are two of the most telling indicators of crypto market activity.
Persons: Andriy Onufriyenko, Bitcoin, Kaiko, Jamie Sly, Sly, bitcoin, Clara Medalie, Morgan Stanley, Goldman Sachs, Carol Alexander, Alexander, you've, Vijay Ayyar, Ayyar, CCData's Sly Organizations: BlackRock, CNBC, BTC, Securities, Exchange Commission, Retail, University of Sussex, Citadel, Fidelity Locations: U.S, CoinGecko, Invesco, Blackrock
Bitcoin has been closely correlated with stock indexes, in particular the Nasdaq, which rose on Wednesday after the U.S. Federal Reserve hiked interest rates by 0.75 percentage point. The price of bitcoin was last lower by about 3% and trading at $29,202.54, while ether fell 5% to $1,977.28. Bitcoin slid toward $29,000 on Wednesday as traders mulled over the likelihood that Federal Reserve rate cuts may be further away than they thought. Meanwhile in the U.S., Atlanta Federal Reserve President Raphael Bostic said Tuesday that he anticipates one more 25 basis point interest rate increase and then a hold "for quite some time." "It is hard to trust any crypto rally with the state of market liquidity, so a sharp drop towards the downside is hardly a surprise."
Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailMedalie: Bitcoin's correlation with the Nasdaq is at the lowest level since the collapse of FTXClara Medalie, director of research at Kaiko, discusses the rally Bitcoin, Ether and other cryptocurrencies have seen in wake of the collapse of Silvergate, SVB and Signature Bank.
A pedestrian walks past signage for Ethereum, top, and Bitcoin outside the Hong Kong Digital Asset Exchange Ltd. digital currency trading store in Hong Kong, China, on Thursday, June 24, 2021. Bitcoin was last lower by more than 4% at $22,364.21, according to Coin Metrics. Cryptocurrency prices fell on Friday as investors weighed the latest financial woes at Silvergate Capital and assessed what a potential bankruptcy at the crypto bank could mean for the broader crypto industry. Bitcoin and ether prices remained flat throughout Thursday, while shares of Silvergate dropped 57%. "To start 2023, crypto markets enjoyed a solid rally to six-month highs following a slowdown in FTX-related contagion, but the Silvergate news has renewed concerns around liquidity and risk," Medalie added.
Investors have been pulling billions of dollars of funds off Binance amid growing scrutiny over the crypto exchange's reserves. On Tuesday afternoon, more than $6.6 billion in crypto had left the exchange over a 24-hour period, according to Nansen. This has investors spooked about the health of Binance in the wake of former competitor FTX's spectacular downfall, which ended Tuesday with CEO Sam Bankman-Fried's arrest and indictment . It remains to be see how wide the damage done by FTX spreads in the crypto market. Clara Medalie, research director at crypto data firm Kaiko, said liquidity on Binance has stayed stable and bitcoin's market depth is holding steady.
Alameda's success spurred the launch of crypto exchange FTX in the spring of 2019. A Twitter fight with the CEO of rival exchange Binance pulled the mask off the scheme. Alameda, FTX and a host of subsidiaries Bankman-Fried founded have filed for bankruptcy protection in Delaware. On Nov. 2, CoinDesk reported a leaked balance sheet showing that a significant amount of Alameda's assets were held in FTX's illiquid FTT token. On Nov. 6, according to Bankman-Fried, the exchange had roughly $5 billion of withdrawals, "the largest by a huge margin."
While bitcoin's price is stuck lately, there is one good thing to come from it for investors betting on crypto to become a legitimate asset class: It's less of a wild ride. After hovering in the $19,000 level for more than a month, bitcoin's volatility is now lower than that of both the Nasdaq and S&P 500, according to Kaiko. (Though bitcoin's correlation with stocks has eased, it remains high and its price continues to be driven by macro themes.) "Bitcoin volatility is at multi-year lows while equity volatility is only at its lowest level since July," Clara Medalie, head of research at Kaiko, told CNBC. The data suggests that cryptocurrency markets are less reactive to volatile macro events than they were earlier on in the year, whereas equity markets have remained highly sensitive."
The month of October, celebrated as "Uptober" by long-time crypto investors, has historically churned out some big gains for bitcoin. In seven of the last 10 years, bitcoin has posted a positive month. For four of the last six years, ether has ended the October trading month higher, according to Kaiko. Bitcoin was lower for the month by 0.3% as of Tuesday, while ether was down 1.4%, according to Coin Metrics. "Crypto market volatility has dipped to multi-year lows over the past month, with bitcoin's 20-day volatility now equal to that of the Nasdaq equity index," Kaiko head of research Clara Medalie told CNBC.
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