As Bitcoin surges to new highs, surpassing $41K and $42K in the past two days, several crypto stocks are responding positively to this rally.
However, investors should be mindful of the upcoming Bitcoin halving event in 2024, which may not be favorable for miners due to a reduction in the mining rate.
Historically, Bitcoin halving events have triggered rallies, benefiting investors holding Bitcoin. This positive trend extends to companies providing crypto custodian and investment services, positioning them for potential gains.
What will be the next trend for Bitcoin and BTC related stocks?
Below are some insights from Tiger @nerdbull1669. Which opinions do you agree with？
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1. @nerdbull1669: Crypto Stocks Winners As Bitcoin Continue Its Rally -> $50K maybe
Key Points:
Bitcoin Correlation With MSTR and COIN
$MicroStrategy(MSTR)$ Software Business Revenue Could Offset Downside Move In BTC
The firm started its bitcoin acquisition strategy on Aug. 10, 2020. From then, until Oct. 31 this year, Bitcoin was up 146% year-to-date.
MicroStrategy stock was up roughly 288% year to date, this has outpacing bitcoin’s price rise of about 142% so far in 2023.
Bitcoin is the highest traded crypto, so if there is a rally in Bitcoin, there will be investors who will be buying into or selling.
So $Coinbase Global, Inc.(COIN)$ would benefit from it even though they are not a miner for BTC. As more and more institutional are adopting crypto, I would foresee that more and more transaction of BTC would happen over the next few months.
2. @nerdbull1669: Time To Take Advantage Of Coinbase (COIN) Bullish Upside Breakout!
Key Points:
$Coinbase Global, Inc.(COIN)$ implied volatility (IV) is 68.8, which is in the 15% percentile rank. This means that 15% of the time the IV was lower in the last year than the current level. The current IV (68.8) is 2.3% above its 20 day moving average (67.3) indicating implied volatility is trending higher.
Shares touched above $130 recently, and there is a possible move up to a previous important resistance mark in the $207 to $217 range. But do note that the $150s might pose some challenges for the bulls, but I would see that there is a consistent build up of light volume up about 30% from Friday’s price compared to high-volume detected at $115 and below.
With Bitcoin crossing $40k at time of writing, I would think Coinbase might be having a bullish upside breakout and with light volume up to $207.
3. @nerdbull1669: Bitcoin Halving Event Advantage, Which ETF You Can Invest In?
Key Points:
When is the next bitcoin halving?
The next bitcoin halving is expected to occur in April 2024, when the number of blocks hits 740,000. It will see the block reward fall from 6.25 to 3.125 bitcoins. The exact date of the halving is not yet known as the time taken to generate new blocks varies, with the network averaging one block every ten minutes.
ProShares Bitcoin Strategy ETF (BITO) Year-To-Date Return
BITO has return more than 120% to investors over the year, and I believe it should be able to continue to do well when Bitcoin price trend close to $40,000.
One thing you might want to take note is the 0.95% per annum expense ratio, but it is worth considering as the last dividend yield is more than 15%.
ProShares Bitcoin Strategy ETF (BITO) Correlation With Bitcoin (HIGH)
As we can see BITO has a 1.0 correlation value to BTC, rising from around 0.7 from around 45 days ago, it is much higher than COIN and S&P 500.
With this correlation, as long as Bitcoin continue to move higher, and rallies after the halving, I do see that BITO to reach a new high.
Questions for you:
What's Next for Bitcoin and BTC-Related Stocks?
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⏰Duration
13 Dec (24pm EDT)
Comments
however, investors should be mindful of the upcoming Bitcoin halving event in 2024, which may not be favorable for miners due to a reduction in the mining rate.
Perhaps the biggest narrative surrounding the Bitcoin halving is that halving always pushes Bitcoin to another all-time high. Most recently, after the last halving event in May 2020, Bitcoin eventually reached its all-time high of $68,790 in November 2021. And the story was largely the same back in 2012 and 2016, when halving events catalyzed impressive bull market rallies.
The argument for a halving-induced rally focuses on the supply of Bitcoin. With any Bitcoin halving, the reward for mining a new Bitcoin block is also halved. As a result, the rate of supply of new Bitcoin is halved, introducing an element of scarcity. The scarcity effect means the price of Bitcoin should go up, provided demand stays the same or rises.
Perhaps the best advice for crypto investors is to take any Bitcoin halving price prediction with a grain of salt. The closer we get to the actual halving event, the more inflated these price predictions could become. The conventional wisdom is that Bitcoin will eventually test its all-time high of $68,790 after the next halving. More aggressive estimates call for Bitcoin to hit the $100,000 mark and beyond.
The short term pullback is normal after the huge spike but I believe the crypto will be bullish in mid term. $Coinbase Global, Inc.(COIN)$
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