Grayscale Drops Bombshell Report: Crypto Bull Run Progresses To ‘Middle’ Phase, Future Outlook Detailed

In late 2022 and throughout early 2023, the cryptocurrency market experienced a major rebound following a lengthy downturn. This resurgence came after a harsh crypto winter that set in due to the failure of several exchanges and businesses in the industry during this period.

Significantly, Bitcoin and other significant cryptocurrencies have seen large price increases, drawing in institutional investors who have started buying through newly authorized Bitcoin ETFs.

Based on the optimistic perspective within the industry, Grayscale, a key player as an asset manager and Bitcoin ETF provider, considers that the present market situation suggests we are in the “intermediate” stages of a cryptocurrency market uptrend.

Recently, Grayscale published a detailed report outlining their significant discoveries and predictions for the future. Market analyst Miles Deutscher has since provided valuable insights into the reasons behind these findings.

On-Chain Metrics And Institutional Demand

Grayscale’s report begins by pointing out several significant indicators suggesting that the cryptocurrency market is experiencing a bull run at present. Some of these signs are: Bitcoin’s price breaking its all-time high prior to the Halving, the total value of the crypto market reaching its past record high, and an increasing interest from traditional financial sectors towards meme coins.

Grayscale highlights two key factors that can help determine the duration of this rally: the inflow of investments into Bitcoin ETFs at current market prices, and robust on-chain fundamentals.

Approximately $12 billion has been invested in Bitcoin ETFs over the past three months, revealing strong hidden interest from retail investors. Notably, the amount of money flowing into these ETFs surpasses the issuance of new Bitcoins, resulting in increased demand and upward price movement due to the imbalance between supply and demand.

Grayscale’s research concentrates on three essential on-chain indicators: the amount of stablecoins flowing in, the overall value locked in Decentralized Finance (DeFi), and Bitcoin withdrawals from exchanges.

Based on Deutscher’s analysis, the growth of about 6% in stablecoin supply on both centralized and decentralized platforms from February to March indicates an improvement in market fluidity. This increase makes larger sums of money easier to trade with.

Grayscale Drops Bombshell Report: Crypto Bull Run Progresses To ‘Middle’ Phase, Future Outlook Detailed

In addition, the analyst notes that the DeFi ecosystem has experienced significant growth, as indicated by the doubled amount of value locked in since 2023. This signifies rising user participation, enhanced liquidity, and a more seamless user experience for DeFi platform users.

Twelve percent of Bitcoin’s total circulation is currently being withdrawn from exchanges, which is the smallest amount in the last five years. This suggests that investors have growing faith in Bitcoin’s worth and prefer keeping it over selling it.

According to Grayscale’s analysis, we are in the middle part of a bull market based on these catalysts. Using the analogy of baseball, this is similar to the fifth inning.

Promising Outlook For Crypto Industry

Grayscale uses several important indicators for their analysis, such as the Net Unrealized Profit/Loss (NUPL) ratio. This figure shows that investors who bought Bitcoin at lower prices are still holding onto it even as prices increase.

Based on Deutscher’s analysis, the Market Value Realized Value (MVRV) Z-Score being 3 means there’s likely more growth in this market cycle. Moreover, according to the ColinTalksCrypto Bitcoin Bull Run Index (CBBI), with a reading of 79/100, we’re close to reaching past peak levels, but some upward trend persists.

In addition, the retail enthusiasm for cryptocurrencies hasn’t fully recovered in this market cycle. This is indicated by a decrease in YouTube subscriptions and fewer searches for “crypto” on Google Trends when compared to the past cycle.

Grayscale Drops Bombshell Report: Crypto Bull Run Progresses To ‘Middle’ Phase, Future Outlook Detailed

In the end, Grayscale remains hopeful yet cautious about the future of this bull market based on the positive signs and insights presented in their report.

Grayscale Drops Bombshell Report: Crypto Bull Run Progresses To ‘Middle’ Phase, Future Outlook Detailed

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2024-04-03 04:16