After a brief dip below $91,000 on November 26, Bitcoin (BTC) has reclaimed the $95,000 level, marking a 5% two-day rally that decouples from traditional markets. This shift in investor sentiment comes amidst growing concerns over global economic uncertainty.
US Government Bonds vs. Bitcoin
The correlation between US government bonds and Bitcoin’s price has been on a decline in recent weeks. The chart below illustrates the trend:
US 2 Year Treasury Price vs. Bitcoin/USD
As investors seek refuge from traditional assets, the likelihood of Bitcoin reaching $100,000 by year-end increases. With some of the world’s largest economies facing growth challenges, scarce assets like Bitcoin are likely to perform well.
Global Economic Uncertainty
Several global economic powerhouses are facing significant challenges:
France
- France’s 10-year yield on government debt has risen to 3%, matching Greece’s debt yields. This indicates growing concerns over political turmoil in the country.
- The French government’s budget deficit is projected to reach 6.1% in 2024, exceeding the eurozone’s proposed limit of 3%.
Russia
- Russia’s domestic currency, the ruble, has dropped to its lowest level since March 2022, prompting intervention from the central bank.
- President Vladimir Putin has dismissed concerns over inflation, which soared to 8.5% in October.
Bitcoin ETF Inflows and Miner Accumulation
Inflow into US spot Bitcoin exchange-traded funds (ETFs) has improved investor sentiment, reversing a two-day negative streak on November 27:
US Spot Bitcoin ETFs
- $103 million of net inflow was primarily directed into Fidelity’s FBTC and Bitwise’s BITB, while BlackRock’s leading IBIT fund remained flat.
- This marked a significant turnaround from the previous $548 million in outflows on November 25 and 26.
Bitcoin Miners’ Flows
- Glassnode data indicates that miners’ flows have ended a 10-day stretch of average outflows, with increasing deposits on miner-controlled addresses.
- While this is an estimate lacking official confirmation, it has contributed to a more bullish market sentiment.
Typical Miner Accumulation Signals Confidence in the Ongoing Bull Market
Miners’ accumulation typically signals confidence in the ongoing bull market, while profit-taking often generates fear, uncertainty, and doubt (FUD).
30-Day Average Miners’ Revenue
- The 30-day average miners’ revenue stands at 476 BTC, suggesting that at least 30% of outflows should be expected to cover expenses.
MicroStrategy’s Bitcoin Holdings
A report from Bernstein Research estimated that MicroStrategy will control 4% of the total Bitcoin supply by the end of 2033:
MicroStrategy’s Large Premium
- The firm currently holds a record 331,200 BTC in its treasury and plans to continue its strategy, including issuing debt and stock.
Bitcoin’s Path to $100,000
The likelihood of reaching $100,000 before year-end also depends on how the US economy and dollar respond to current macroeconomic conditions. However, on-chain data and institutional interest remain robust, indicating strong bullish momentum that could propel BTC toward new highs.
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