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Spot Bitcoin ETF approval to propel BTC to $1M in ‘days to weeks,’ says Samson Mow

Bitcoin is likely to reach $1 million quickly due to a "torrent of money" coming from institutional investors in 2024, according to the JAN3 CEO.

Bitcoin (BTC) is likely to reach $1 million in the "days to weeks" following the approval of a spot BTC exchange-traded fund (ETF), according to JAN3 CEO Samson Mow. 

“You're hitting a very limited supply of Bitcoin on the exchanges and available for purchase with a torrent of money,” Mow said, referring to the inflow of institutional capital that is expected following a potential spot ETF approval. 

“This is why you can go really high all at one time,” he adds.

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Bitcoin Cash Rallies Ahead of Upcoming Halving and Upgrade

Nansen phishing emails flood crypto investors’ inboxes

On Sept. 22, one of Nansen’s third-party vendors suffered a security breach, which exposed the email addresses of 7% of the system’s users.

Numerous users of the crypto analytics platform Nansen have received phishing emails from scammers pitching an “exclusive opportunity” to participate in the fictitious “Nansen Airdrop.”

On Nov. 23, crypto community members on X (formerly Twitter) flagged an ongoing phishing campaign targeting Nansen users. The scammers are impersonating Nansen and sending fake invitations to an exclusive airdrop event.

Cointelegraph confirmed the hack from crypto investigator Officer’s Notes (Officercia), who initially warned the community about the ongoing attack. He suspects that user data from a previous third-party database leak is being used to target Nansen users.

On Sept. 22, one of Nansen’s third-party vendors suffered a security breach, which affected nearly 7% of the system’s users. The users affected by the breach reportedly had their email addresses exposed, along with some password hashes, and several had their blockchain addresses compromised. At the time, Nansen claimed it would identify and inform those affected and ask them all to change their passwords. It also clarified that wallet funds were unaffected by the event.

Nansen phishing email. Source: @offiercia (X)

The screenshot of the Nansen phishing email shared with Cointelegraph shows the sender was “mail@networkforgood.com,” an email address completely unrelated to the original analytics platform.

It said that for the next 48 hours, users could claim a guaranteed allocated amount of fake NANSEN tokens. The scammers attached a link to the email, which would redirect users to a potentially rigged website.

Officercia advises reporting suspected phishing links to databases such as chainabuse.com, cryptoscamdb.org and phishtank.org, which help the internet community reduce the success rates of such attacks.

Nansen has not responded to Cointelegraph’s request for comment.

Related: No ‘mass exodus of funds’ following Binance–DOJ settlement — Nansen

Even more crypto investors are potential phishing targets after user data from TrueCoin and FTX bankruptcy claims, among others, was leaked recently.

However, Friend.tech recently denied claims that its database of over 100,000 users was leaked. “It’s like saying someone hacked you by looking at your public Twitter feed,” explained the Friend.tech team, clarifying that the information came from scraping its public API.

Magazine: This is your brain on crypto: Substance abuse grows among crypto traders

Bitcoin Cash Rallies Ahead of Upcoming Halving and Upgrade

3 metrics DeFi traders can watch in order to spot the next crypto bull market

TVL, fee revenue and wallet activity are just three metrics investors can use to assess the health of the DeFi sector.

The decentralized finance (DeFi) market has been one of the most exciting and volatile sectors in the crypto outside of Bitcoin (BTC). In 2020, the DeFi sector experienced a bull market that saw the total value locked (TVL) in decentralized finance protocols surge from $1 billion to over $100 billion. However, the DeFi market has also been prone to significant corrections. In 2021, the DeFi market experienced a correction that saw the TVL fall from $100 billion to $40 billion.

Despite the volatility of the DeFi market, there are ways for traders to catch onto when the niche crypto sector begins to show sustained bullish momentum. Three of the most important metrics to watch are TVL, a platform’s fee revenue and the number of non-zero wallets holding tokens.

Let’s dig in a bit deeper to explore how these metrics can be used to guage the health of the DeFi sector.

Increases in the total value locked

TVL is one of the most widely used metrics to measure the overall health of the DeFi ecosystem. TVL represents the total amount of cryptocurrency assets locked in DeFi protocols. When TVL rises, it suggests increasing demand and use of DeFi services, which can signify a bull market.

While current TVL is slightly below the 2023 peak set on April 15 of $52.9 billion, it has risen since the start of the year. Since Jan. 1, TVL across the crypto market is up $7 billion, eclipsing $45 billion.

Crypto market TVL. Source: DefiLlama

Increased fee reveunue points to increased usage and interest

Protocol fees measure the amount of fee revenue received by blockchains for completing transactions. Layer-1 blockchains are a key part of the DeFi ecosystem, as they allow for the building of decentralized applications (DApps) in which users can interact without a centralized intermediary.

When layer-1 fees are rising, it suggests that there is increasing interest in DeFi and that traders are utilizing DApps to interact with blockchains. In the past 30-days, the top 16 layer-1 blockchains by market cap all have shown a positive increase in fees. The 30-day fee total collected by Ether (ETH) is over $2.2 billion when annualized.

Layer-1 blockchain fees. Source: TokenTerminal

Related: Breaking into Liberland: Dodging guards with inner-tubes, decoys and diplomats

Non-zero DeFi wallet addresses rise

The number of non-zero addresses is a good indicator of the number of people who are actively participating in crypto. When the number of non-zero addresses increases, it suggests that there is increasing demand, which can be a sign of a bull market.

Non-zero addresses are a typically reliable indicator of demand as users are only likely to hold a crypto token if they believe that it will appreciate in value or actively utilize a protocol. Isolating statistics from the entire crypto market to focus on DeFi tokens, the number of non-zero addresses hit an all-time high on Nov. 8 of 1.1 million addresses. When looking at Nov. 8, 2020, there were only 267,180 non-zero wallet addresses.

DeFi Blue-Chip tokens. Source: Glassnode

Related: Solana (SOL), Avalanche (AVAX) and dYdX produce double-digit gains as Bitcoin reclaims $37K

The DeFi market has recovered and evolved since the Terra Luna implosion, but it is also volatile, so it is important to carefully consider on-chain metrics and other macro factors that can help identify bull markets.

By watching these metrics, traders can better understand the DeFi market’s overall health and possibly get early signals on the emergence of a new bull market.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Bitcoin Cash Rallies Ahead of Upcoming Halving and Upgrade

Is it altseason? Altcoin 30-day performance and total market cap flash bullish

3 key data points highlight the 60-day strength shown by altcoins.

A wave of green has washed across the entire crypto market, and it won’t be long before traders on X (the social platform formerly known as Twitter) begin to explain that a new altcoins season has arrived. 

Altcoin season, or ‘altseason’ as the crypto bros say, typically measures the rallying of altcoins and a positive market capitalization increase of the total altcoin market cap.

Let’s take a look at some key indicators that market participants use to determine whether or not an altcoin season has emerged.

Total crypto market capitalization hits a 14-month high

The total crypto market cap recently hit a 14-month high, clearly reflecting the current bullish momentum.

Similar strength is seen in the total altcoin market capitalization chart (TOTAL2). The metric measures the crypto market cap minus Bitcoin (BTC).

Since Sept. 8, the metric has springboarded from $526 billion to $622 billion on Nov. 9. The change shows traders’ growing interest and investment interest in altcoins, along with an increase in the prices of altcoins within the metric.

Total crypto market cap minus Bitcoin. Source: TradingView

Related: Exclusive: 2 years after John McAfee’s death, widow Janice is broke and needs answers

Large-cap altcoins display multi-week strength

Data from CoinMarketCap shows the top 13 altcoins by market cap (excluding stablecoins) reflecting double-digit gains within the last 30 to 60-days.

In particular, Ripple (XRP), which has won a host of legal battles against the Securities and Exchange Commission (SEC), witnessed 45% gains in the past 60-days. On top of the legal victories that helped to boost investor sentiment, it is rumored that Ripple will be announcing an IPO on Nov. 9.

Top altcoin performers. Source: CoinMarketCap

For the past 3-months, Solana (SOL) has rallied significantly and started to lose its “Sam coin” moniker. Sam coins are cryptocurrencies with exposure to Alameda Research, FTX and Bankman-Fried. SOL price gained over 107% in the past 60-days as the project continues to rebuild and gain users in the aftermath of the FTX collapse. BitMEX exchange co-founder Arthur Hayes recently joined the Solana train, announcing that he purchased the altcoin on Nov. 2.

Similar to Solana, Chainlink (LINK) has seen massive 60-day returns of over 100% due to consistent building and usage. Link also has posted 26% returns in 6-days.

Related: New BTC price levels to watch as Bitcoin avoids $36K

Other notable performances came from BNB (BNB), Cardano (ADA), Tron (TRX) and Polygon (MATIC), which also produced double-digit gains in a 60-day period.

The altcoin market performance seemingly coincides with an improvement in investor sentiment. A gauge of market sentiment is the Fear & Greed Index. Since starting September as fearful, the market has turned to greed on Oct. 23 and has not reversed.

Fear & Greed Index. Source: Newhedge

Whether it is truly altseason or not, it is clear that excitement is returning to the crypto market.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Bitcoin Cash Rallies Ahead of Upcoming Halving and Upgrade

3 reasons why Ethereum price is underperforming altcoins

Eth price trades at a key resistance level, but data highlights why the altcoin could struggle to hold $1,900.

Ether (ETH) price surged by 6.2% from Nov. 3 to Nov. 5, but the altcoin faces difficulty in breaking the $1,900 resistance. Despite the current bullish trend, Ether's 17% return over the last 30 days falls short of Bitcoin's (BTC) impressive 27% gain during the same period.

Regulatory hurdles and ecosystem centralization critiques linger

Analysts attribute some of Ether’s underperformance to uncertainty surrounding Consensys, a key player in the Ethereum ecosystem. Former employees have filed a lawsuit against the company and its co-founder, Joseph Lubin. Over two dozen shareholders of the Swiss-based holding company, Consensys AG, claim that Lubin, who is also a co-founder of Ethereum, violated a "no-dilution promise" made in 2015.

Consensys is responsible for developing and hosting infrastructure projects crucial to the Ethereum network. It was founded in October 2014, about nine months before the Ethereum blockchain launched in mid-2015. Furthermore, the High Court of Zug in Switzerland ruled in favor of the plaintiffs, exacerbating the current uncertainty.

Regulatory challenges have hampered the growth of the Ethereum ecosystem. The latest concern centers around PayPal's U.S. dollar-pegged stablecoin, PYUSD, which operates on the Ethereum network. This token is designed for digital payments and Web3 applications. On November 2, PayPal disclosed a subpoena it received from the U.S. Securities and Exchange Commission (SEC).

In addition to regulatory pressures, there has been notable criticism of the decentralization of financial applications (DeFi) within the Ethereum network. Chainlink, a preferred solution for oracle services, quietly reduced the number of participants in its multi-signature wallet from 4-out-of-9 to 4-out-of-8. Analysts have highlighted the lack of governance by regular users as a significant issue.

Ether’s underperformance to altcoins is an evidence of other issues

Several major altcoins, including Solana (SOL), XRP and Cardano (ADA) have outperformed Ether with returns of 75.5%, 37%, and 35% in the last 30 days, respectively. This discrepancy suggests that the factors holding back ETH are not solely related to regulatory pressure or reduced demand for DeFi and NFT markets.

One pressing issue for the Ethereum network is the high gas fees associated with transactions, including those executed by smart contracts. The latest 7-day average transaction fee was $4.90, negatively impacting the usage of decentralized applications (DApps).

Moreover, the total deposits on the Ethereum network, measured in Ether, have dropped to their lowest levels since August 2020. It's essential to note that this analysis does not consider the effects of native Ethereum staking.

Ethereum network applications' total deposits in ETH. Source: DefiLlama

According to DefiLlama data, Ethereum DApps had a total value locked (TVL) of 12.7 million ETH on November 5, down 4% from the 13.2 million ETH two months earlier. In comparison, TVL on the Tron network increased by 13% during the same period, while Arbitrum deposits remained at 1 million ETH. Data on DApps activity on the Ethereum network supports the notion of reduced activity.

Ethereum network top DApps, 30-day active addresses. Source: DappRadar

Even excluding the significant 60% decline in the Uniswap NFT Aggregator, the average number of active addresses across the top Ethereum network DApps decreased by 3% compared to the previous month. In contrast, Solana's top applications saw an average 18% increase in active users during the same period, according to DappRadar data.

Related: Aave pauses several markets after reports of feature issue

Finally, on-chain activity indicates increased user deposits of ETH at exchanges. While this data doesn't necessarily signal short-term selling, the mere availability of coins is typically viewed as a precautionary measure by analysts.

Average 7-day daily ETH deposits at exchanges, ETH thousands. Source: CoinMetrics

The present daily ETH deposit average of 255,614 represents a 30% increase from two weeks earlier, indicating that holders are more inclined to sell as Ether's price approaches $1,900.

The data suggests that reduced TVL, declining DApps activity and a higher rate of ETH exchange deposits are negatively impacting the likelihood of Ether breaking the $1,900 resistance. The price level could be more challenging than initially expected and for now, Ether bears can take a breath.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Bitcoin Cash Rallies Ahead of Upcoming Halving and Upgrade

CME Bitcoin futures hit record high, but uncertainty looms above $36K

CME Bitcoin futures hit a 2-year high, but options market data reflects investors’ hesitancy.

Bitcoin (BTC) futures open interest at the Chicago Mercantile Exchange (CME) hit an all-time high of $3.65 billion on November 1. This metric considers the value of every contract in play for the remaining calendar months, where buyers (longs) and sellers (shorts) are continually matched.

Bullish momentum on CME Bitcoin futures, but cautious BTC options markets

The number of active large holders surged to a record 122 during the week of Oct. 31, signaling a growing institutional interest in Bitcoin. Notably, the Bitcoin CME futures premium reached its highest level in over two years.

In neutral markets, the annualized premium typically falls within the 5% to 10% range. However, the latest 15% premium for CME Bitcoin futures stands out, indicating a strong demand for long positions. This also raises concerns as some may be relying on the approval of a spot Bitcoin exchange-traded futures (ETF).

Contradicting the bullish sentiment from CME futures, evidence from Bitcoin options markets reveals a growing demand for protective put options. For instance, the put-to-call open interest ratio at the Deribit exchange reached its highest levels in over six months.

Deribit Bitcoin options put-to-call ratio. Source: Laevitas.ch

The current 1.0 level signifies a balanced open interest between call (buy) and put (sell) options. However, this indicator requires further analysis, as investors could have sold the call option, gaining positive exposure to Bitcoin above a specific price.

Regardless of demand in the derivatives market, Bitcoin's price ultimately relies on spot exchange flows. For instance, the rejection at $36,000 on Nov. 2 led to a 5% correction, bringing the price down to $34,130. Interestingly, the Bitfinex exchange experienced daily net BTC inflows of $300 million during this movement.

As analyst James Straten highlighted, the whale deposit coincided with the fading momentum of Bitcoin, suggesting a potential connection between these movements. However, the downturn did not breach the $34,000 support, indicating real buyers at that level.

Bitcoin's latest correction occurred while the Russell 2000 Index futures, measuring mid-cap companies in the U.S., gained 2.5% and reached a two-week high. This suggests that Bitcoin's movement was unrelated to the U.S. Federal Reserve's decision to maintain interest rates at 5.25%.

Additionally, the price of gold remained stable at around $1,985 between Nov. 1 and Nov. 3, demonstrating that the world's largest store of value was not affected by the monetary policy announcement. The question remains: how much selling pressure do Bitcoin sellers at $36,000 still hold?

Reduced Bitcoin availability on exchanges can be deceiving

As demonstrated by the $300 million daily net inflow to Bitfinex, merely assessing current deposits at exchanges does not provide a clear picture of short-term sale availability. A lower number of deposited coins may reflect lower investor confidence in exchanges.

Apart from legal challenges against Coinbase and Binance exchanges by the U.S. SEC for unlicensed brokerage operations, the FTX-Alameda Research debacle has stirred more concerns among investors. Recently, U.S. Senator Cynthia Lummis called on the Justice Department to take "swift action" against Binance and Tether for their involvement in facilitating funds for terrorist organizations.

Related: SEC seeks summary judgment in Do Kwon and Terraform Labs case

Lastly, the cryptocurrency market has been impacted by increased returns from traditional fiat fixed income operations, while the once lucrative cryptocurrency yields vanished following the Luna-TerraUSD collapse in May 2022. This movement has had lasting effects on the lending sector, leading to the collapse of several intermediaries, including BlockFi, Voyager, and Celsius.

At the moment, there is undeniable growing institutional demand for Bitcoin derivatives, according to CME futures data. However, this may not be directly related to lower spot availability, making it difficult to predict the supply between $36,000 and $40,000—a level untested since April 2022.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Bitcoin Cash Rallies Ahead of Upcoming Halving and Upgrade

3 reasons why Ethereum price is down against Bitcoin

ETH price continues to lose ground against Bitcoin. Cointelegraph takes a closer look at the factors behind the weakening ETH/BTC pair.

The price of Ethereum’s native token, Ether (ETH) is trading around a 15-month low versus Bitcoin (BTC), and the lowest since Ethereum switched to proof-of-stake (PoS).

Cointelegraph takes a closer look at some of the reasons for the continuous drop of the ETH/BTC pair.

Ether’s historical price action has changed

In previous market cycles, Ethereum often outperformed BTC during bullish market trends, but this relationship began to change at the start of 2023. Ether and numerous altcoins struggled as the narrative around altcoins use within Web3, DeFi and NFTs came under pressure in 2022 and 2023.

Stringent regulations against the crypto industry, severely muted inflows from retail and institutional investors, an uptick in investors seeking shelter in US-dollar-pegged stablecoins also impacted sentiment for Etheruem.

Bitcoin dominance rises

In addition to a change in Ether’s performance in its BTC pair, ETH was negatively impacted by the steady rise in Bitcoin dominance. As reported by Cointelegraph,

“Bitcoin’s market dominance has reached 54%, its highest in the last 30 months, indicating the top cryptocurrency is strengthening just before the halving event scheduled for April 2024.”
Bitcoin market dominance chart. Source: TradingView

Bitcoin dominance is a measure of BTC’s market capitalization relative to the overall crypto market and it highlights the assets’s strength and if often used by investors as a sentiment gauge. With the Bitcoin halving fast approaching (April 2024) and investors’ belief that a spot BTC ETF is imminent, the drop in Ether’s value in its BTC pair suggests that investors feel more bullish about BTC and possibly allocating less money to Ether investments.

Related: Bitcoin dominance hits 54% — Highest in 2.5 years as BTC halving approaches

Ethereum price breaks below critical support vs. Bitcoin

The ETH/BTC pair dropped to 0.050 BTC on Oct. 23 and has remained in a downtrend since then. A notable occurrence was the pair’s fall below its 200-week exponential moving average near 0.058 BTC,which raises the possibility for further downside in the short-term.

According to Cointegraph contributor Yashu Gola,

“The 200-week EMA has historically served as a reliable support level for ETH/BTC bulls. For instance, the pair rebounded 75% three months after testing the wave support in July 2022. Conversely, it dropped over 25% after losing the same support in October 2020.”

These factors are likely to continue impacting Ethereum's price relative to Bitcoin. The multifaceted market dynamics, investor sentiment and staunch regulatory environment could remain the dominant headwinds against the ETH/BTC pair for the foreseeable future.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Bitcoin Cash Rallies Ahead of Upcoming Halving and Upgrade

Bitcoin price trades near key $31.7K pivot point — Can BTC bulls keep up the volume?

Bitcoin started the week with a bang, but the real question is, what is driving the move and is it sustainable?

Bitcoin (BTC) price pushed above the $31,000 mark on Oct. 23, notching a near 4-month high last seen when BTC price traded at $31,800. 

The fresh upside push comes as analysts and investors express their excitement over new developments which could point to the impending launch of a spot Bitcoin ETF.

Referring to Johnsson’s post, Bloomberg Senior ETF analyst Eric Balchunas cautioned his followers to not get overly excited, and explained that the amended iShares (Blackrock) S-1 document shows BlackRock could be preparing to seed their ETF and that “and disclosing it shows another step in the process of launching.”

Balchunas clarified the process, saying:

“Background: Seeding an ETF is when initial funding is provided (typically) by a bank or broker dealer used to purchase a few creation units (in this case bitcoin) in exchange for ETF shares which can be traded in open market on Day One.”

Related: Bitcoin ETF to trigger massive demand from institutions, EY says

Bitcoin spot volumes and institutional investor activity make waves

From the vantage point of market analysis, Bitcoin’s swift move through the $30,000 zone appears driven by spot volume.

BTC/USDT 1-hour chart. Source: Velo

Data from CoinMetrics also shows an uptick in weekly crypto asset inflows by institutional investors into digital asset investment products.

Weekly crypto asset flows. Source: CoinShares

CoinShares analyst David Butterfill said,

“Digital asset investment products saw inflows for the 4th consecutive week totalling US$66m, bringing the last 4 week run of inflows to US$179m. Following recent price appreciation, total Assets under Management (AuM) have risen by 15% since their lows in early September, now totalling nearly US$33bn, the highest point since mid-August.”

Volumes for CME futures also doubled, a reflection that spot and futures traders have fresh bullish sentiment about Bitcoin’s recent price action.

Bitcoin futures volume and open interest. Source: CME Group
Bitcoin futures volume and open interest. Source: CME Group

The uptick in CME volumes and spot volume, as opposed to a surge in Binance futures open interest suggests that this week’s move could be more than just the standard leverage-loving retail trader attempting to open margin longs and shorts on the recent price move.

From the technical analysis side, Bitcoin’s 20-day moving average has slightly pushed above the 200-day moving average, which is a positive move, but many traders will be waiting for the supposed all-important golden cross where the 50-day moving average moves above the 200-day moving average.

BTC/USDT daily chart. Source: TradingView

In terms of Bitcoin’s market structure on the longer timeframe, successive daily closes above the $31,700 level would be notable as daily or weekly higher high candles above this level puts the price above a key pivot point and enters territory not seen since May 2022.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Bitcoin Cash Rallies Ahead of Upcoming Halving and Upgrade

Why the 2024 Bitcoin halving may play out differently than in the past

While the halving event is considered one of the main catalysts for Bitcoin bull markets, it may play out differently next year.

The impact of the Bitcoin halving on crypto prices is often overestimated and the next halving, set for April 2024, may play out differently than previous ones, according to a leading analyst.

The halving event, which every four years, cuts in half the rate by which new Bitcoins are created, and is generally considered one of the main catalysts driving Bitcoin’s biggest upside moves.

Despite the bullish narrative surrounding the halving, however, the event by itself does not guarantee the appreciation of Bitcoin.

If the reduced supply of new Bitcoin is not accompanied by significant demand, prices are unlikely to surge.

Also, the halving is an entirely predictable event: that means all market participants know in advance when it will occur and therefore its current price may already be reflective of the halving's impact before it happens.

“Things that we most anticipate generally don't happen,” said Bloomberg analyst Mike McGlone, commenting on the much anticipated event.

“And that's what I'm concerned about. It's complete consensus,” he continued.

Also, each time the halving occurs, its impact on the new Bitcoin supply decreases; over time, its impact will eventually become irrelevant. Changes in demand, rather than supply, are therefore becoming the dominant factor influencing the price of Bitcoin.

So, how will the next Bitcoin halving impact the crypto market? And, if not the halving, what is the catalysts behind Bitcoin’s cyclical upside moves?  To find out, check out our latest Cointelegraph Report on our YouTube channel and don’t forget to subscribe!

Bitcoin Cash Rallies Ahead of Upcoming Halving and Upgrade

Inflation and war impact markets, but Paul Tudor Jones says, ‘I love Bitcoin and gold’

Billionaire investor Paul Tudor Jones says he is bearish on U.S. stocks, and bullish on Bitcoin and gold.

Investing legend Paul Tudor Jones has revealed that he’s bearish on stocks and bullish on gold and Bitcoin (BTC).

The two main reasons he cites are the potential for an escalation of the conflict between Israel and Hamas, and subpar fiscal conditions in the United States. While an inverted yield curve wasn’t included in Tudor’s comments, it’s yet another important factor for investors to consider.

Geopolitical conflicts exacerbate macro uncertainty

In a recent interview with CNBC, Jones mentioned the factors he’s keeping an eye on with regard to the Israel-Palestine conflict before deciding that market uncertainty has been reduced. His general thesis is that if things escalate further, a risk-off sentiment could prevail in financial markets.

Despite the potential for geopolitical tensions escalating in the near-term, the major U.S. indexes have all posted gains for the first two trading days of this week. If Jones is right, this rally will likely be short-lived.

Dow Jones Industrial Average, QQQ, and SPY 5-day chart. Source: TradingView

The yield curve remains deeply inverted

One of the greatest predictors of recession historically has been the yield curve. Every recession since 1955 has been preceded by an inversion of the curve between the yields of the 2-year and 10-year Treasury Bonds.

In July, the 2s/10s yield curve for US Treasuries hit a low of 109.5 basis points (BPS). This level had not been seen since 1981. While this inversion has since steepened, things still look bad from the perspective of shorter duration Treasuries.

The 1-month and 3-month US T-bills are currently yielding close to 5.5%, while the 2-year note is yielding close to 4.96%. The 10-year is yielding 4.65%, meaning the 2s/10s curve is inverted by 31 BPS.

A flatter yield curve compresses margins for banks because it limits their ability to borrow cash at lower rates while lending at higher rates, which can lead to restricted lending activity and a resulting economic slowdown. It also means that investors are less optimistic about the near-term future of the economy, as they sell shorter duration debt, causing yields to rise.

See related: Binance Freezes Hamas Linked Accounts at Israeli Request 

The Federal Reserve's attempt to fight inflation by raising rates at the fastest pace in modern history has also played a role. Higher rates create additional stress on the banking system, which has seen 3 of the 4 largest collapses in U.S. history this year alone with the failures of Signature Bank, First Republic Bank, and Silicon Valley Bank.

Some market observers speculate that the Fed will have to begin lowering rates as soon as early 2024 to prevent further economic fallout, even if inflation has not come down to the Fed’s desired level.

Easier monetary policy and its corresponding liquidity boost tends to be bullish for crypto markets. If rates do fall going into the 2024 Bitcoin halving cycle, the stage could be set for significant market moves.

2s/10s chart, 1983 - present. Source: Markets.businessinsider.com

Bitcoin and gold remain the preferred safe havens

Amidst all this chaos, gold and BTC have remained resilient.

BTC has fallen 2% in the last two trading days, being flat over the last 5 days, while gold is up 2% during the same time.

Paul Tudor Jones summarized his position on gold and BTC, saying:

“I can’t love stocks,” he said, “but I love bitcoin and gold.”

The billionaire has said on the record that he maintains a 5% allocation to BTC and he sees gold and BTC as being safe haven bids during uncertain times. Tudor first announced that he made a 1% allocation to BTC in May of 2020 during the COVID pandemic lockdowns.

Gold and Bitcoin 5-day chart. Source: TradingView.

All things considered, Paul Tudor Jones could be right. Time will tell if his bearish call for equities plays out, or if risk-on sentiment somehow prevails in spite of recent events.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Bitcoin Cash Rallies Ahead of Upcoming Halving and Upgrade