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🎁 Holiday spirits

Need some holiday cheer this Monday morning? Don’t worry, I’ve got you: Bitcoin at $120,000 could be a thing by Christmas. 

Or so Steven McClurg, Canary Capital CEO, thinks. 

“There’s a lot of appetite” for bitcoin and bitcoin ETFs, which could fuel the run, he added. 

I’m not going to sugarcoat it. That type of run looks tough right now. Over the weekend, bitcoin mostly sat below six figures, unable to take — and hold — $100k.

But McClurg told me all of the work he’s done has led him to believe that a rally could happen. And even if $120,000 remains elusive into the next year, he’s hopeful that it’s a matter of when we see it rather than if. 

And, if we don’t see that number by Christmas, he’s fairly certain we’ll see it before we ring in the new year. 

Keep in mind, McClurg’s price target is fairly similar (a mere $5k short) to Ledn’s John Glover’s PT.

As I wrote last week, some analysts are concerned that late January could mark a turning point for bitcoin.

K33’s Vetle Lunde, in a note, wrote: “The average distance between BTC’s first cycle ATH and its last ATH during its past three cycles is 318 days. Under the assumption that average trajectories hold, a peak would occur on January 17. This is not unlikely, given that Trump’s inauguration will take place on January 20.”

McClurg doesn’t think we’ll see the market peak next month. Instead, he reckons it could last anywhere from June to October, which is specifically based on the fact that bitcoin historically runs for roughly six months after a new president takes office. 

When I asked whether or not the four-year cycle will hold moving forward, McClurg said yes… with a twist. 

“I believe that cycle will still be there, but that being said, bitcoin will begin to follow the broader macroeconomic cycle closer over time than the typical four-year cycle,” he told me.

Now this is important to note for a few reasons: We have a few macro events incoming. Not only are we getting the all-important November CPI this week, but we also have the Federal Reserve meeting next week. Both of which could have a positive (or negative, depending on the data and what’s said) impact for bitcoin. 

It seems like it’ll be par for the course to see continued fluctuation between the upper $90k’s and $100k.

Still, who knows. The market could feel merry and bright in light of the holidays, and a $120k run is just around the corner. 

— Katherine Ross

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• Only two top-100 coins are up today: SOS (30%) and LEO (4%). 

• BTC and ETH are otherwise down 2% and 3.5% apiece (BTC: $98,250; ETH: $3,855).

• Tron’s market share for stablecoin supply has fallen from 35% to 30% in the last month, per Blockworks Research data. Meanwhile, Ethereum’s has risen by an almost equivalent amount.

• CEX liquidations in the past day have reached $497 million, 83% coming from longs.

• Weekly DEX volumes are up 14%, led by Uniswap (16%), PancakeSwap (31%), Orca (28.5%) and Lfinity (72%), per DeFiLlama.

🕒 Time in the market

It goes without saying: What’s good for bitcoin is good for bitcoin ETFs.

No surprise then that almost $10 billion net has now flowed into US-listed spot funds since Trump’s win — about 83% going to BlackRock’s IBIT.

Some ETFs are still doing better than others.

To be clear: Share prices for the ETFs, by design, closely track the price of bitcoin. But share prices don’t reflect whether the funds themselves are up or down on their bitcoin purchases to date. 

Every stock market trading day, the funds must spend the cash flowing into them on an equivalent amount of BTC. And vice versa: They must offload coins when net flows are negative.

So, it’s possible to calculate an estimate for how much BTC each fund buys and sells per day, by dividing the daily US dollar flow figures by the price of bitcoin (per CF Benchmark reference rate, which all the major funds use).

Tally those BTC-denominated flows together and you get their cumulative current holdings: over 855,000 BTC ($84.2 billion), not counting Grayscale’s GBTC and BTC, and more than 1.1 million BTC ($108.3 billion) when included. That’s about 5.6% of the circulating supply.

But what we’re after is the value of each fund’s BTC stash compared to how much they paid for all those coins, what I’ve called relative value on the chart below. 

It turns out that Invesco-Galaxy’s BTCO is far ahead of the rest of the pack — it has acquired around 8,740 BTC net for $418.9 million so far. As of this morning, BTCO’s bitcoin would fetch $860.6 million, putting its shareholder collective ahead by more than 100%.

As you can see on the next chart, three-quarters of BTCO’s net flows to date came in the first two weeks of live trading, when bitcoin was changing hands for under $43,000.

BTCO’s average estimated purchase price per coin: $47,930.

Compare that to BlackRock’s IBIT. It has maintained more steady flows over the past 11 months — acquiring roughly 523,935 BTC from $34.4 billion net flows. 

That means the ETF has effectively dollar-cost averaged its bitcoin stash to date, giving it an average coin price of $65,600.

IBIT is about 50% ahead on its BTC purchases to date and has timed the market worse than any other fund in the cohort.

Of course, IBIT’s BTC has appreciated much more than BTCO’s in raw dollar terms, on account of the sheer size of the fund by comparison. 

Still, hats off to BTCO’s contributors. Now let’s see how long they can hold.

— David Canellis

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• Move over Bored Ape Yacht Club: Pudgy Penguins overtook BAYC during the weekend to become the second-largest NFT collection by market cap.

• Radiant Capital suffered from a $50 million exploit back in October, which it attributes to North Korean hackers. 

• Coinbase CEO Brian Armstrong called on lawmakers to block the renomination of democratic SEC Commissioner Caroline Crenshaw, arguing that she’s “worse than [Gary] Gensler” on some points. 

• Michael Saylor’s MicroStrategy went on yet another bitcoin buying spree, snapping up over 21,500 bitcoin over the last week. 

• President-elect Donald Trump’s newly appointed Crypto and AI Czar, David Sacks, said there are “too many stories” of people being hurt by Operation Chokepoint 2.0, and it needs to be examined.

Q: What’s the significance of Coinbase’s FOIA release?

That really depends on our collective attention span — and whether the appointed position of Crypto and AI Czar really does hold real political weight over the next four years.

Let’s be hopeful and say that it will. The best case scenario would be a removal of partisan lines when it comes to crypto.

Whatever scandal comes out could be the talking point that unites both sides against unnecessary red tape slowing innovation. At least, we can hope.

— David Canellis

I’m going to take an L here. A few weeks ago, we riffed on the possibility of Operation Chokepoint 2.0, and I said that this could have been caused by banks using an excuse not to engage with crypto firms. 

After Coinbase’s doc dump last week, though, it’s pretty clear that the FDIC meddled and explicitly asked banks to not engage with crypto.

What I will say now is that finally, we are in a place where things can actually be done about these types of situations, especially considering it’s caught the attention of newly appointed Crypto Czar David Sacks. 

The first step was uncovering the truth (kudos, Coinbase, for fighting the good fight here) and the next step will be action. 

What that looks like, though, is anyone’s guess.

— Katherine Ross