JPMorgan Chase just issued an update on the firm’s financial outlook. In a new note to clients, global investment strategist Madison Faller says JPMorgan has a “glass half-full” view after a month-long stock market dip, reports the financial technology firm TipRanks. “In any given year, there are good things and bad things that impact the […]
The post JPMorgan Chase Updates Market Outlook, Says One Stock Could Soar 116%: Report appeared first on The Daily Hodl.
Rising interest rates, delayed Bitcoin ETFs, global financial turmoil and other regulatory pressures are contributing to the crypto market's underperformance.
The cryptocurrency market has experienced a notable downturn recently, with the total market capitalization falling by 10% between August 14 and August 23, reaching its lowest point in over two months at $1.04 trillion. This movement has triggered significant liquidations on futures contracts, the largest since the FTX collapse in November 2022.
Several economic factors have contributed to this decline. As interest rates have surpassed the 5% mark and inflation remains above the targeted 2%, finance costs for both families and businesses have risen, placing pressure on consumer spending and economic expansion. That causes less money available for savings and could force people to let go of their investments just to cover monthly bills.
Since inflation expectations for 2024 stands at 3.6% and average hourly earnings increased by 5.5% year-over-year, at the fastest pace since 2020, the Federal Reserve (Fed) is likely to maintain or even raise interest rates in the coming months. Consequently, a high interest rate scenario favors fixed-income investments, which is detrimental for cryptocurrencies.
Inflation has receded from its peak of 9% to the current 3%, while the S&P 500 index is only 9% below its all-time high. This could indicate a "soft landing" orchestrated by the Federal Reserve, suggesting that the likelihood of an extended and profound recession is diminishing, temporarily undermining Bitcoin's investment thesis as a hedge.
Investor expectations had been high for the approval of a spot Bitcoin exchange-traded fund (ETF), particularly with heavyweight endorsements from BlackRock and Fidelity. However, these hopes were dashed as the SEC continued to delay its decision, citing concerns over insufficient safeguards against manipulation. Complicating matters, a substantial volume of trading continues to occur on non-regulated offshore exchanges based in stablecoins, raising questions about the authenticity of market activity.
Financial difficulties within the Digital Currency Group (DCG) have also had a negative impact. A subsidiary of DCG is grappling with a debt exceeding $1.2 billion to the Gemini exchange. Additionally, Genesis Global Trading recently declared bankruptcy due to losses stemming from the collapses of Terra and FTX. This precarious situation could lead to forced selling positions in the Grayscale GBTC funds if DCG fails to meet its obligations.
Further compounding the market's woes is regulatory tightening. The Securities and Exchange Commission (SEC) has leveled a series of charges against Binance exchange and its CEO Changpeng "CZ" Zhao, alleging misleading practices and the operation of an unregistered exchange. Similarly, Coinbase faces regulatory scrutiny and a lawsuit centered on the classification of certain cryptocurrencies as securities, highlighting the ambiguity in US securities policy.
Signs of trouble stemming from lower growth in China have also emerged. Economists have revised down their growth forecasts for the country, with both imports and exports experiencing declines in recent months. Foreign investment into China dropped by over 80% in the second quarter compared to the previous year. Worryingly, unpaid bills from private Chinese developers amount to a staggering $390 billion, posing a significant threat to the economy.
Despite the prospect of a deteriorating global economy, which could potentially bolster Bitcoin's appeal due to its scarcity and fixed monetary policy, investors are showing a propensity to flock to the perceived safety of U.S. dollars. This is evident in the movement of the DXY dollar index, which has surged from its July 17 low of 99.5 to its current level of 103.8, marking its highest point in more than two months.
As the cryptocurrency market navigates through these multifaceted challenges, the ebb and flow of various economic factors and regulatory developments will undoubtedly continue to shape its trajectory in the coming months.
Such a situation could possibly be an outcome of excessive optimism following the submission of multiple spot Bitcoin ETF requests in mid-June, so instead of focusing on what caused the recent 10% correction, one could question whether the rally in mid-July from $1.0 trillion market capitalization to $1.18 trillion was justified in the first place.
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 price is closely linked to several financial assets but the reasons for correlation with certain precious metals and stocks can be quite different.
The financial media often points out Bitcoin’s (BTC) correlation to big tech. “Bitcoin is trading like a tech stock” is a common narrative alongside BTC's often acute inverse-relationship with the United States dollar.
But are these correlations set in stone, and can they be useful for predicting future price moves? Let's take a closer look at several reports analyzing the relationship between Bitcoin and various asset types.
A report published in October 2022 by the Multidisciplinary Digital Publishing Institute arrived at several key conclusions regarding Bitcoin’s correlations with traditional financial assets, including:
While some of these points can be countered with newer price data over the last 9 to 10 months, such as a major drop in volatility, insight can still be gained from examining them. In addition, other researchers have gone deeper into the relationship of specific assets to Bitcoin during set timeframes.
A few crypto-related equities have been more correlated to Bitcoin than any other assets on the market. The 90-day correlation coefficient for BTC/MSTR, BTC/COIN, and BTC/RIOT have all remained near 1 for the last several months. The symbols "BTC/xxxx" indicate the correlation coefficient for each asset as measured against Bitcoin.
For MSTR, the coefficient has fallen no lower than 0.68 since September 2022. The coefficient for RIOT fell to roughly 0.75 in June 2023, while COIN trended near 0 for a time during May and June.
All of these stocks have outperformed Bitcoin so far this year while also showing greater volatility. Investors may be using these assets as proxies for Bitcoin, which can't be bought through a brokerage account.
One reason these three stocks are so closely correlated to Bitcoin has to do with the balance sheet of their respective companies. They all have a substantial amount of Bitcoin holdings.
As seen in the table below, MSTR has the most holdings of any public company with 152,333 Bitcoin. COIN comes in 4th place with 10,766 Bitcoin, and RIOT is in 8th place with 7,094 Bitcoin.
When it comes to correlation with commodities and precious metals, in particular, silver actually beats gold in mirroring Bitcoin's price moves since 2019.
A November 2022 report by Jordan Doyle and Urav Soni of the CFA Institute entitled “How do cryptocurrencies correlate with traditional asset classes?” shed some light on Bitcoin's most-correlated assets.
Silver has been the commodity most closely-correlated to Bitcoin from October 2019 and to October 2022 with a correlation coefficient of 0.26, according to the report. Gold’s correlation, by comparison, was just 0.15, perhaps due to silver’s greater volatility.
The report notes:
Silver has the highest correlation, peaking at 0.26 for silver and bitcoin. Bitcoin, the so-called 'digital gold,' exhibits only weak correlation with the precious metal.
When speaking of stocks as a whole and their correlation to Bitcoin, looking at an index or ETF would be the most common way to make a comparison. This provides an overview of the asset class in general rather than zeroing in on one specific stock, which may have any number of factors affecting it.
As might be expected, growth funds tend to be more correlated with cryptocurrencies, presumably due to their more speculative nature. Notably:
“Growth funds exhibit a stronger correlation to cryptocurrencies than value funds. The correlation coefficient between small-cap growth funds and bitcoin, for instance, is 0.41, compared to 0.35 for small-cap value funds and bitcoin.”
In other words, crypto markets as a whole are “weakly sensitive to interest rate dynamics” that were at least partially responsible for a broad drawdown in equities throughout 2022.
Finally, Bonds bear little to no relationship with Bitcoin. Passive bond funds showed a correlation of just 0.11, while active bond funds were just two basis points higher at 0.13. All data points are for the timeframe of October 2019-October 2022.
Due to Bitcoin’s large price swings, all correlations can change at a moment’s notice. Still, the data used here provides an accurate picture of the assets most closely correlated to Bitcoin in the recent past.
Related: Bitcoin and correlations: examining the relationship between btc, gold, and the nasdaq
It's likely that crypto-specific stocks will continue having a strong correlation due to their Bitcoin holdings, while the correlation with commodities and equity funds could quickly change course going forward.
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.
The US banking industry could see its stock prices plummet within the next 16 months, according to macro guru Hugh Hendry. In a new interview with Kitco News, the former chief investment officer of hedge fund Eclectica Asset Management says that US banking stocks could witness a deep devaluation if the economy goes through a […]
The post US Banking Industry Could Take Massive Hit To Stock Prices in Coming Months, Says Macro Guru Hugh Hendry appeared first on The Daily Hodl.
Digital securities firm Securitize will provide new alternative assets to major cryptocurrency firms like WisdomTree and Valkyrie Invest.
Tokenized asset firm Securitize continues expanding investor access to private market alternative assets with the acquisition of the cryptocurrency fund manager Onramp Invest, which manages more than $40 billion in assets.
Securitize is planning to simplify the access of registered investment advisors (RIA) to private equity, private credit and secondary asset classes with the acquisition of Onramp.
The acquisition brings more than $40 billion in combined assets, which the Onramp platform handles for a community of RIAs across the United States. Onramp’s customer base features some prominent firms in the crypto industry, including the exchange-traded (ETF) fund WisdomTree, asset manager Valkyrie Invest, the ETF firm Global X, crypto media Coindesk and others.
As a result of the acquisition, RIAs will be able to offer their clients investments in alternative asset classes like private equity, private credit and real estate via Onramp Invest’s dashboard. According to the announcement, Securitize will increase and diversify the investments available to RIAs by giving them direct access to its alternative investment portfolio.
“Onramp already offered RIAs easy access to digital assets, so it is a very natural extension to offer them tokenized alternative assets to complement their portfolios,” Securitize CEO Carlos Domingo said, adding:
“Most wealth is generated in private market alternative assets and bringing Securitize and Onramp together enables registered investment advisors to give their clients access to that wealth generation.”
The latest acquisition builds on a previous partnership of Securitize and Onramp announced in March 2023. The partnership was focused on distributed access to tokenized private equity funds from investment firms like Hamilton Lane. At the time, Onramp’s platform had RIA firms with a combined AUM of over $35 billion.
Related: ‘XRP is not a security. Period’ — Crypto lawyers on Ripple’s case amid SEC appeal
The news comes soon after Securitize started tokenizing equity in the Spanish real estate investment trust Mancipi Partners in June. The firm expects to launch secondary trading on the Avalanche blockchain in September.
Securitize did not immediately respond to Cointelegraph’s request for comment.
Bitcoin price remains range bound as equities, gold and US Treasuries offer competitive rates with reduced risk. This week’s CPI report could shake things up.
The S&P 500 index is currently trading only 6% below its all-time high, which was reached in December 2021. Traditionally, such a situation would be seen as a bullish sign for risk-on assets, including commodities and cryptocurrencies, but this time, it appears that investors have been using the stock market as a means of protection against the recent inflation surge, which peaked at over 4% between April 2021 and May 2023.
For Bitcoin (BTC) and cryptocurrency investors, inflation has typically been viewed as a positive factor influencing the price, as evidenced by the previous all-time highs of $65,000 and $69,000 that occurred during a period of monetary expansion and increasing inflation in 2021. However, the current situation is different because inflation is making a comeback while the U.S. Federal Reserve (Fed) has been effectively reducing liquidity in the system. As a result, the impact of inflation on cryptocurrencies remains uncertain.
The recent 7-day decline in tech giants, including Fortinet (FTNT) with a decrease of 25.7%, Block Inc. (SQ) with a drop of 20.5%, Paypal (PYPL) down by 15%, Shopify (SHOP) down 14.8%, and Palo Alto Networks (PANW) down 13.9%, has caught the attention of investors, particularly in light of the expectation of an additional interest rate hike by the Federal Open Market Committee (FOMC) on Sept. 20.
Economists predict that the Consumer Price Index (CPI) for July, which will be revealed on Aug. 10, will be around 3.3%, surpassing the previous month's figure of 3% and exceeding the central bank's 2% target. Given the latest unemployment rate of 3.5% in June, nearing a 40-year low, the movement toward tightening the Fed's economy becomes more certain.
During uncertain times, gold, a traditional safe-haven has struggled to surpass the $2,000 mark on multiple occasions since 2020, indicating a lack of confidence in its ability to hedge against risks.
The real estate market has also been impacted, facing limited housing supply and rising mortgage rates, as evidenced by Redfin's 2Q revenue drop of 21% compared to the previous year. The company expects a further decline of 15% to 20% in transaction value for the 3Q.
Even traditionally considered safe assets like bonds are losing some of their appeal due to the ongoing increase in U.S. debt. Investment mogul and hedge fund billionaire Bill Ackman reportedly shorted 30-year U.S. Treasury bonds, expressing concerns about long-term inflation.
A July 31 report by the U.S. Treasury Department revealed a $1 trillion quarterly net borrowing estimate, and an unexpected Fitch Ratings downgrade of the U.S. debt further fueled concerns in the financial markets.
Consequently, investors are now seeking alternative markets, and Bitcoin whales have increased their leverage long positions using derivatives despite the cryptocurrency's price remaining around $29,500.
Bitcoin quarterly futures typically trade at a slight premium relative to spot markets, as sellers’ demand more money to delay the settlement. Healthy markets usually display BTC futures contracts trading at a 5% to 10% annualized premium, a situation known as contango, which is not unique to crypto markets.
The BTC futures premium (or basis rate) on platforms like Deribit and OKX reached 8%, the highest in over three weeks. This higher premium signals pro traders are willing to pay an additional cost to engage in leverage longs, thus reflecting a positive sentiment toward Bitcoin.
Traders can also gauge the market’s sentiment by measuring whether more activity is going through call (buy) options or put (sell) options. A 0.70 put-to-call ratio indicates that put option open interest lags the more bullish calls and is, therefore, bullish. In contrast, a 1.40 indicator favors put options, which can be deemed bearish.
The put-to-call ratio has been below 1 since July 24 revealing a strong demand for call (buy) instruments. Such data suggests investors' optimism in the potential price appreciation of Bitcoin.
There is a growing indication that Bitcoin might potentially benefit from the inflation surge. However, if investors start to believe that the Federal Reserve's idea of a soft landing for the economy is unlikely and that a severe recession is on the horizon, they are likely to favor Treasuries and cash positions initially.
In the short to mid-term, there is not much evidence to suggest that Bitcoin will experience a significant surge if inflation becomes widespread in the U.S. Nevertheless, there is hope for bullish investors as the cryptocurrency has shown solid support at the $29,000 mark.
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 offers slight volatility after fresh U.S. macro data, but BTC price behavior remains firmly rangebound.
Bitcoin (BTC) inched higher at the Aug. 4 Wall Street open as mixed United States unemployment data rocked U.S. dollar strength.
Data from Cointelegraph Markets Pro and TradingView followed BTC price action as BTC/USD set daily highs of $29,273.
U.S. jobless figures came in below expectations on the day, at 3.5% versus an estimated 3.6%, while the number of jobs added was less than forecast.
Responding, financial commentator Holger Zschaepitz said that the data had “no clear message.”
“Despite the fastest rising rates of all time, the labor market remains strong,” financial commentary resource The Kobeissi Letter continued in part of its own synopsis.
“This is the most resilient labor market in history.”
While U.S. stocks and Bitcoin managed to eke out modest gains as a result, the U.S. dollar felt the pressure in what could still aid a more pronounced BTC price rebound.
The U.S. Dollar Index (DXY) was down 0.6% on the day at 101.8, setting new lows for August.
For Michaël van de Poppe, founder and CEO of trading firm Eight, there was reason to believe that BTC/USD could improve into the next round of macroeconomic data releases.
“This means $DXY down, stocks up & Bitcoin potentially up awaiting CPI next week,” he wrote about the jobs data.
Van de Poppe referenced the upcoming Consumer Price Index inflation print for June, due Aug. 10.
Turning to Bitcoin itself, popular trader Skew tracked rash moves among traders as brief BTC price volatility appeared.
Related: BTC price upside ‘yet to come’ at $29K after Bitcoin RSI reset — Trader
$BTC
— Skew Δ (@52kskew) August 4, 2023
Short taken out, some short float left still https://t.co/fVvHhrVr1y pic.twitter.com/zARYYyIZy8
He nonetheless described the broader market reaction to the data as “very interesting.”
On-chain monitoring resource Material Indicators likewise followed changes in bid and ask liquidity on the Binance BTC/USD order book.
Was watching the #Bitcoin PA in real time on #FireCharts 2.0 (beta) as the Economic Reports came across the wire. Purple Whales started eating resistance as the numbers came in, then a column of bids and asks were pulled and a few minutes later moved.
— Material Indicators (@MI_Algos) August 4, 2023
Out of respect and… pic.twitter.com/5bjloZM7DW
Going into the weekend, few expected a significant change in the overall sideways trading environment.
“I feel we will be stuck above this support zone for this weekend. For now no entry for now as we just remain range bound,” a typical prediction from popular trader Crypto Tony read earlier in the day, alongside a chart showing relevant levels.
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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.
Massachusetts securities regulators seek to ensure that AI applications in the securities industry will not harm the interests of their users.
Securities regulators in the United States state of Massachusetts have launched an investigation into the use of artificial intelligence (AI) in the securities industry after becoming increasingly concerned about the implications of the new technology.
On Aug. 3, Massachusetts Secretary of the Commonwealth William Galvin officially announced an investigation into how firms use AI in their interactions with Massachusetts investors.
On Aug. 2, the commonwealth’s securities division sent letters of inquiry to a number of registered and unregistered firms known to be using or developing AI for business purposes in the securities industry. The authority sought data on the matter in which companies may be using AI in their activities and operations.
The firms included in the investigatory sweep have been given until Aug. 16, 2023, to respond to the regulator’s inquiries.
“Of particular interest to Galvin are the supervisory procedures that firms have in place regarding artificial intelligence, and whether those systems ensure that the AI will not put the interests of the firm ahead of the interests of their clients,” the regulator said. For those firms that have already deployed AI, the securities division will also be assessing the disclosure policies.
According to Galvin, U.S. securities regulators have a crucial role to play when it comes to AI and its possible implications for investor protection. He added:
“If deployed without the guardrails necessary to ensure proper disclosure and consideration of conflicts, I am concerned that this technology could result in harm to investors.”
Additionally, Massachusetts securities regulators are also questioning certain companies about any marketing materials provided to investors that may have been created using AI.
The Massachusetts securities division did not immediately respond to Cointelegraph’s request for comment.
AI has increasingly become a global regulatory concern in recent years due to the rapid growth of the technology. In the second fiscal quarter of 2023, mentions of AI in earnings calls of major tech companies skyrocketed. For example, companies like Intel mentioned AI nearly 300% more in Q2 2023 than in its first-quarter call.
Related: SEC’s Gary Gensler believes AI can strengthen its enforcement regime
But some major regulators have been alarmed by potential risks coming with AI for several years. For example, the Financial Stability Board (FSB) raised concerns about AI and machine learning in financial services back in 2017.
The FSB specifically argued that AI and machine learning services were increasingly being offered by a small handful of large technology firms. “There is the potential for natural monopolies or oligopolies,” the FSB wrote, adding that competition issues could be translated into financial stability risks.
“If one of them were to face major disruption or insolvency, there would be major repercussions in the world of finance,” the regulators argued at the time.
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Israel’s only public stock exchange is preparing to offer new regulated cryptocurrency services through another partnership with Fireblocks.
Israel is set to introduce more regulated cryptocurrency opportunities, with the country’s only public stock exchange preparing to offer new crypto services.
Tel Aviv Stock Exchange (TASE) has signed an agreement with the digital asset platform Fireblocks to jointly offer a range of new digital asset products and services.
Announcing the news on Aug. 1, TASE noted that the new partnership will enable the stock exchange to provide institutional-grade digital asset solutions for regulated entities.
The collaboration is designed to combine TASE's experience and presence in the Israeli market with Fireblocks' technology focused on moving, storing, and issuing digital assets.
According to TASE clearing executive Orly Grinfeld, the new partnership between TASE and Fireblocks is a “monumental leap forward in the global digital assets landscape.”
“We are unwavering in our pursuit of revolutionizing the industry and the local capital market, and this collaboration epitomizes our dedication to delivering secure, regulated, and innovative digital asset solutions,” Grinfeld said.
Fireblocks co-founder and CEO Michael Shaulov mentioned that the firm’s latest collaboration with TASE builds upon the success of Project Eden, an initiative dedicated to the application of blockchain infrastructure in the issuance and settlement of digital government bonds. Fireblocks and the crypto firm Blockfold participated in the proof-of-concept phase of the project completed by early June 2023.
“With Project Eden, our work with TASE has been one of the most exciting and ground-breaking digital asset use cases to date,” Shaulov said, adding:
“The digital asset products and services that TASE is exploring will no doubt play foundational roles in the future of Israel’s economy.”
TASE officially announced plans to create a blockchain-based digital asset platform in October 2022. As part of the plan, the Israeli stock exchange wanted to examine multiple options, including conversion of existing infrastructure to innovative technologies, deployment of innovative technologies into specialized platforms. The stock exchange was also looking to offer a basket of services and products for digital assets and more.
Related: Bill to exempt foreigners from crypto taxes passes preliminary reading in Israel
In March 2023, TASE issued a proposal to approve an expansion of crypto trading activities to non-banking members. According to the proposal, non-banking members will act as licensed providers for crypto trading and custodial services.
TASE did not immediately respond to Cointelegraph’s request for comment.
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Bitcoin miners make moves in preparation for the BTC block reward halving, which is scheduled for April 2024.
In July, Bitcoin mining stocks continued their positive 2023 run, with the top 10 stocks by market cap gaining 23.10% on the month on average, with a year-to-date return of 277.34%.
In comparison, the Bitcoin (BTC) price lost 3.59% in July as it failed to build support above $30,000 for the sixth week since June. Despite a difficult July, the BTC price is still up 78.88% in 2023.
The decline in Bitcoin’s price reduced the profitability of miners. To make conditions more challenging for miners, the mining difficulty reached a new all-time high, reducing miner profitability.
Historical trends show that the network’s hash rate could continue to rise leading up to the halving on April 26, 2024 as miners increase their hashing power by installing new efficient machines.
Besides adding to their processing power, miners are also adopting other hedging techniques like selling Bitcoin futures to lock in current prices.
As the network’s hash rate is expected to increase through the year as miners reinvest in new machines and adopt other hedging techniques, miner profitability and stock valuations will continue to face pressure in the lead-up to the event.
While the BTC price has increased by around 80% year-to-date, the mining difficulty has also increased by 51%, offsetting the rise in profitability from the price surge.
In mid-July, Bitcoin’s difficulty set a new all-time high of 53.91 trillion units. The increase in difficulty triggered a capitulation event in the sector, which was already reeling under pressure at the start of the month.
Bitcoin’s hashprice index, a metric used to quantify the average daily miner earnings from 1 TH/s across the industry, dropped from $78.30 per TH/s on July 1 to $72 per TH/s by the end of July, per Hashrate Index data.
The network’s hash rate deflated in the second half of July, resulting in a 2% decline in its difficulty in the adjustment on July 26.
The adjustment will likely ease the pressure on miners, but only slightly. The total hash rate is still ranging above last month’s lows after rising consistently since the start of 2023.
Moreover, historical trends suggest that miners will likely continue adding to their fleet, which could cramp profitability further.
Before the previous halving, Bitcoin’s hash rate grew consistently for a year, peaking only a month before the halving in May 2020. The current rise in the network’s hash rate is showing a similar trend.
Besides increasing hash power, the miners are adopting various strategies to prepare for the event.
These strategies involve improving the cash flow and profits of their operations by managing the existing and newly mined BTC before the halving.
In the previous cycle, Bitcoin miners had started accumulating BTC a year before the event and began unloading only after the rewards were slashed. However, with less than nine months, or three quarters, before the next halving, the trend hasn’t repeated yet. Miners have been seen sending large amounts of BTC to exchanges.
The one-hop supply of miners, which represents the coins received from mining pools, dipped toward a 2023 low in July.
Data from Bitfinex also shows that miner inflow to exchanges is part of a de-risking strategy to hedge their BTC on derivatives exchanges. For instance, selling BTC one-year futures allows miners to lock in a selling price of $30,000 for next year.
Some miners could also be selling to improve their cash balances before the halving.
Miners are selling record amounts of newly mined #Bitcoin to cover operational costs. Despite the prolonged bear market, mining firms like @Hut8Mining , @Foundry & @Brains remain confident and bullish on #BTC's future. Many are looking to derisk their operations by hedging in the… pic.twitter.com/xVyAmb8BTE
— Son of a Tech (@SonOfATech) July 26, 2023
According to data from TheMinerMag, public miners have liquidated nearly all of their newly mined Bitcoin in the last two months.
Meanwhile, Bitcoin mining stocks have continued their impressive positive rally from the start of the year and could be en route to another positive monthly closing in July.
Related: Buying Bitcoin is preferable to BTC mining in most circumstances — Analysis
Notably, miner stocks were fueled by reports of a $500 million investment by the United States-based investment fund Vanguard, a $7.2 trillion asset management firm. The fund added to its allocations of Riot Platforms (RIOT) and Maraton Digital Holdings (MARA) in certain indices.
The potential for further upside could be triggered by an ongoing short squeeze, as Marathon Digital Holdings, Riot Platforms and Cipher Mining are heavily shorted, with 20-25% of their float shares, according to Fintel data.
Nevertheless, the mining stocks showed the first signs of weakness in the second half of July, as most mining stocks recorded two negative weekly closings.
Given that the competition in the Bitcoin mining industry is expected to increase throughout the year, miners’ profitability and stock valuations may remain under stress leading up to the halving.
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.
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.
