To The Moon

Institutional demand driven by Bitcoin ETFs will bring “new highs in 2024,” With halving just a few months out, all eyes are on Bitcoin miners’ performance.

The crypto sector is primed to pop and picked two key mining stocks for investors to get exposure. It is time to really consider “Buy Bitcoin — and its miners.” As of now, most of the US-listed miners look relatively well positioned.

The halving which is slated for April 20, will see the Bitcoin network cut the rewards it doles out to miners by half. Miners receive rewards – today, it’s 6.25 Bitcoin – for maintaining the network and verifying transactions.

These outfits will essentially be expected to continue the same work for less reward, tightening the field and putting pressure on any inefficient miners. The event occurs every four years, but the dynamic this time around is different writes Bernstein.

Bitcoin ‘supply crunch’

With the industry’s Bitcoin ETF era well underway, analysts expect an influx in pent-up demand to pour into the market. This demand will meet head-on with miners issuing – selling to fund their operations – fewer Bitcoin on the market, creating a “supply crunch.”

“This combination of growing BTC demand and miners selling less BTC, creates the unique supply crunch in the market. Except this time, the demand from the ETFs already looks strong pre-halving,” writes Bernstein.

As prices for original-blend Bitcoin soar, investors can also gain exposure to this dynamic by scooping up shares in $Riot Blockchain, Inc.(RIOT)$ and $CleanSpark, Inc.(CLSK)$.

Riot is tipped to almost double and CleanSpark to gain roughly 53%. Though Riot, in particular, has been weak versus others, but with the expected capacity growth in Corsicana coming up, starting Q2, we expect better price action.”

The Corsicana facility has been pitched as the world’s largest Bitcoin mining outfit, sprawled out across 265 acres. Authorities have approved a total capacity of one gigawatt of power, or enough energy to power 100 million LED bulbs.

Spot Bitcoin (CRYPTO: BTC) ETFs recorded the third-biggest day of inflows since their launch on Jan. 10, 2024 as two spot Bitcoin ETFs topped the chart for all ETF inflows after one month. Each ETF crossed $3 billion in total assets.

BlackRock’s $iShares Bitcoin Trust(IBIT)$ , and $Fidelity Wise Origin Bitcoin Fund(FBTC)$ have emerged as leaders among the Top 25 ETFs by asset inflows one month into their launch.

IBIT boasts of $3.75 billion in assets, while FBTC stands at $3.16 billion. Notably, both ETFs have reported inflows on all days since their launch. Other spot Bitcoin ETFs that made the list are ARK 21Shares’ spot Bitcoin ETF (BATS:ARKB) and Bitwise Bitcoin Fund (NYSE:BITB), with total assets of $845.2 million and $791 million, respectively.

Cointucky Derby Update. BIG net inflow day of over $400 mln. With almost 8 of the newborn nine took in money yesterday. $FBTC officially crossed $3 billion in AUM. $GBTC outflow streak continues with -$101.6.

Spot Bitcoin ETF Took Shorter Time to Surpass Previous

Last Thursday we saw spot Bitcoin ETFs experienced their third-largest day of inflows ($4.5 billion) since their launch. The top two inflow days thus far are Jan.30 ($6.86 billion) and Jan. 19 ($4.81 billion). The strong demand has contributed to push Bitcoin over the $47,000 mark for the first time after the Spot Bitcoin ETF approval, recording its biggest weekly surge in four months.

Balchunas noted that for a newly launched ETF, it typically takes five to 10 years to surpass the previously leading ETFs in terms of liquidity. However, spot Bitcoin ETFs have done so in less than a month. Crypto investor Fred Krueger highlighted that the nine new Bitcoin ETFs have surpassed MicroStrategy in Bitcoin holdings, indicating their growing influence in the market.

 Cryptoslate lead analyst states that he is impressed with Bitcoin ETF flows coming at a time when retail investors think Bitcoin is dead. He also expects inflows to ramp up even further after the halving. Bitcoin ETFs inflow would be even higher if the outflow of Grayscale, which was forced by FTX liquidation, decreases. He sees the current price surge as the "start of a bull cycle and a Bitcoin of $250,000+.”

Looking ahead, the upcoming halving event in April 2024 may further contribute to the price rally, as high demand meets a supply shock. Estimating inflows into Bitcoin ETFs: Based on these market size estimates, if we assume that BTC is adopted by 10% of total available assets in each wealth channel with an average allocation of 1%, we estimate $14bn of inflows into a Bitcoin ETF in the first year following an ETF launch, ramping up to $27bn by the second year and $39bn by the third year post-launch. Of course, if Bitcoin spot ETF approvals are delayed or denied, our analysis would be altered by timing and access restriction. Or if poor price performance, or any other factor, leads to lower-than-expected access or adoption to a bitcoin ETF, our estimates could prove too aggressive. On the other hand, we believe our assumptions on access, exposure, and allocation are conservative, so inflows could also be higher than expected.

Summary

I personally would think that this is a good time for us to look at these crypto mining stocks and Spot Bitcoin ETFs, there will be potential as miners would geared up for the halving events happening in April.

Appreciate if you could share your thoughts in the comment section whether you think crypto mining stocks and ETFs would have potential rally ahead of Bitcoin halving.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.