The crypto market witnessed a significant surge after a prolonged bear market and an intensified crypto winter due to the crypto collapse. cryptocurrency exchange Companies between 2022 and part of 2023.
In particular, Bitcoin and other major cryptocurrencies have experienced significant price increases with renewed interest from around the world. Institutional investor Enter the market through the recently approved Spot Bitcoin Exchange Traded Fund (ETF).
Adding to the positive outlook for the industry, asset manager and Bitcoin ETF issuer Grayscale believes current market conditions indicate the industry is in the “mid-term” phase of the crypto bull market. .
Grayscale recently released a comprehensive report detailing key findings and insights about what's to come.closer analysis A report by market expert Miles Deutscher reveals the factors contributing to this valuation.
On-chain metrics and institutional demands
Grayscale's report begins by highlighting several key signals that indicate the market is currently in the midst of a bull market. These include the price of Bitcoin surpassing its all-time high before the halving event, the cryptocurrency's market capitalization reaching its previous peak, and increased traditional finance (TradFi) attention towards meme coins. included.
To understand how long this rally will last, Grayscale highlights two specific price drivers: spot Bitcoin ETF inflows and strong on-chain fundamentals.
Grayscale notes that nearly $12 billion has flowed into Bitcoin ETFs in just three months, indicating a significant “pent-up.” retail demand. Additionally, ETF inflows have consistently exceeded BTC issuance, creating upward pressure on prices due to the imbalance between supply and demand.
Grayscale's research focuses on three key on-chain metrics: stablecoin inflows, decentralized finance (DeFi) total value locked (TVL), and BTC outflows from exchanges.
According to Deutscher, the approximately 6% increase in stablecoin supply on centralized exchanges (CEX) and decentralized exchanges (DEX) from February to March is due to stronger liquidity and more This suggests that more capital is now readily available. transaction.
Additionally, for analysts, doubling the total value locked in DeFi after 2023 means increased user engagement, increased liquidity, and improved user experience within the DeFi ecosystem. Masu.
The outflow from exchanges, which currently accounts for about 12% of BTC's circulating supply (the lowest in five years), shows investors' growing confidence in BTC's value and a preference for holding rather than selling.
Based on these catalysts, Grayscale claims the market is in the “middle stage” of a bull market, likening it to the “bottom of the fifth inning” in baseball.
Promising prospects for the cryptocurrency industry
Several key metrics support Grayscale's analysis, including the Net Unrealized Gain and Loss (NUPL) ratio. This shows that investors who bought BTC at a low price continue to hold BTC. price increase.
According to Deutscher, the market value realized value (MVRV) Z-score is currently 3, indicating there is still room for growth in this cycle. Additionally, the ColinTalksCrypto Bitcoin Bull Run Index (CBBI), which integrates multiple ratios, is currently at 79/100, suggesting the market is approaching the peak of a historic cycle with upward momentum remaining. .
In addition, retail interest is still in full swing this cycle, as evidenced by the drop in YouTube subscription rates for cryptocurrencies and the decrease in interest in “cryptocurrency” on Google Trends compared to the previous cycle. I haven't returned to.
Ultimately, Grayscale remains “cautiously optimistic” regarding the future of this bullish cycle given the encouraging signs and analysis outlined in the report.
Featured image from Shutterstock, chart from TradingView.com
