Bitcoin (BTC) stands to win big thanks to the BlackRock exchange-traded fund (ETF), investor and analyst Charles Edwards believes.
In his latest interview with Cointelegraph, Edwards, who is founder of quantitative Bitcoin and digital asset fund Capriole Investments, goes deep into the current state of BTC price action.
With his previous bullish statements continuing to stand the test of time, and after an eventful few months, Edwards does not see the need to alter the long-term perspective.
Bitcoin, he argues, may be less of a sure bet on shorter timeframes, but the overarching narrative of crypto becoming a recognized global asset class undoubtedly remains.
Cointelegraph (CT): When we last spoke in February, Bitcoin price was around $25,000. BTC is not only 20% higher today, but Bitcoin’s NVT ratio is also at its highest levels in a decade. Does this suggest more upside?
Charles Edwards (CE): NVT hiện đang giao dịch ở mức bình thường. Ở mức 202, nó đang giao dịch ở giữa dải dải động, thấp hơn nhiều so với mức cao nhất năm 2021. Với việc đọc bình thường hóa ngày hôm nay, nó không cho chúng ta biết nhiều; chỉ là Bitcoin được đánh giá khá cao theo chỉ số này
CT: At the time, you described Bitcoin as being in a “new regime” but forecast up to 12 months’ upward grind to come. How has your thinking evolved since?
CE: That thinking mostly remains today. Bitcoin has steadily grinded up about 30% since February. The difference today is that the relative value opportunity is slightly less as a result, and we are now trading into major price resistance at $32,000, which represents the bottom of the 2021 bull market range and confluence with major weekly and monthly order blocks.
Quan điểm của tôi ngày hôm nay trong ngắn hạn là trái chiều, với xu hướng đối với tiền mặt cho đến khi một trong ba điều xảy ra:
- Price clears $32,000 on daily/weekly timeframes, or
- Price mean-reverts to the mid-$20,000s, or
- On-chain fundamentals return to a regime of growth.
CT: At $30,000, miners have begun to send BTC to exchanges en masse at levels rarely seen. Poolin, in particular, has moved a record amount in recent weeks. To what extent will miners’ purported selling impact price moving forward?
CE: Đúng là áp lực bán của công ty khai thác Bitcoin tương đối đã tăng lên. Chúng ta có thể thấy điều đó trong hai chỉ số trên chuỗi dưới đây; Áp lực bán của thợ mỏ và dải băng băm. Tỷ lệ băm của Bitcoin đã tăng 50% kể từ tháng 1 – đó là tốc độ tăng trưởng hàng năm hơn 100%
Tốc độ tăng trưởng nhanh chóng này không bền vững lâu dài. Do đó, chúng ta có thể mong đợi bất kỳ sự chậm lại nào sẽ kích hoạt sự đầu hàng Hash Ribbon điển hình. Sự tăng trưởng nhanh chóng về tốc độ băm này cũng chỉ có thể có nghĩa là một điều: một lượng lớn các giàn khai thác mới đã tham gia vào mạng lưới
Việc khai thác Bitcoin khó hơn 50%, cạnh tranh nhiều hơn 50% và kết quả là doanh thu BTC tương đối ít hơn 33% cho các thợ đào.
Through 2022 there were delays and backlogs in global mining hardware shipping for many months; we likely have seen that backlog flush out in the first half of the year with the large hash rate uptick. New mining hardware is costly, so it makes sense that miners would want to sell a bit more at relatively higher prices today to help cover operational costs and take advantage of the 100% price rally we have seen in the last 7 months.
Miners are large Bitcoin stakeholders so if they are selling at a rapid rate it can impact prices. Though given their relative share of the network is diminishing, that risk factor is not what it once was.
CT: When it comes to U.S. macro policy, how do you see the Fed approaching inflation for the second half of the year? Are further hikes coming past July?
CE: The market is pricing in a 91% chance of rate hikes through the rest of this year. There’s a 99.8% chance that the Fed will raise rates at next week’s meeting, according to the CME Group FedWatch Tool. So it’s probable we see one or two more rate hikes in 2023. That seems quite excessive given inflation (CPI) has consistently been trending down since April 2022, and is now well below the Fed funds rate of 5%.
Of course things could change quite a bit over the next months, but if we take two more rate hikes as the base case, my expectation that any net change in the Fed’s plan would be toward a pause. We’ve already seen the considerable stress building in the banking system, with multiple bank collapses just a couple of months ago. 2023 was the biggest banking failure of all time in dollar value; more than 2008, so things could change considerably over the next six months.
Regardless, the Fed has implemented the vast majority of its rate hike plan. 90% of the tightening is complete. It’s now a game of wait and see — will inflation continue to decline as anticipated? And will that occur before or after the economy takes a turn?
CT: Mối tương quan của Bitcoin với tài sản rủi ro và mối tương quan nghịch với sức mạnh của đồng đô la Mỹ đã giảm vào cuối năm nay. Lý do cho điều này là gì? Đây có phải là một phần của xu hướng dài hạn?
CE: Bitcoin has historically spent most of its life “uncorrelated” with risk markets, oscillating from periods of positive to negative correlation. Correlation comes in waves. The last cycle happened to see a very strong correlation with risk assets. This began with the Corona crash on March 12, 2020. When fear peaks, all markets go risk-off (into cash) in unison, and we saw a huge spike in correlations across asset classes as a result.
Following that crash, a wall of money entered risk markets from the biggest QE of all time. In that regard, the following year was “all one trade” — up and to the right for risk. Then in 2022 we saw the unwinding of all risk assets as bonds repriced following the most aggressive Fed rate hike regime in history.
Vì vậy, đó là thời điểm bất thường. Nhưng không có nhu cầu nội tại để Bitcoin có mối tương quan cao với tài sản rủi ro. Có khả năng theo thời gian khi Bitcoin trở thành một tài sản trị giá hàng nghìn tỷ đô la, nó sẽ được kết nối nhiều hơn với các loại tài sản chính và do đó hy vọng sẽ thấy mối tương quan tích cực nhất quán hơn với vàng trong thập kỷ tới, có mối tương quan tiêu cực cao
CT: How do you think U.S. regulatory pressure will impact Bitcoin and crypto markets going forward? Do you think Binance and Coinbase were the tip of the iceberg?
CE: Impossible to say for sure, but I believe the regulatory fears of early 2023 have been well overblown. Bitcoin was long ago classified as a commodity, and from a regulatory perspective is in the clear. There’s definitely question marks on various altcoins, but the legal outcome of XRP being deemed not a security was definitely an interesting turn of events this month.
Cuối cùng, khá rõ ràng rằng ngành công nghiệp và chính phủ – nơi nó quan trọng – đang hỗ trợ loại tài sản này và biết rằng nó ở đây để tồn tại.
BlackRock ETFs have a 99.8% success rate and its announcement to launch a Bitcoin ETF was essentially a regulatory and financial industry green light.
We’ve seen half a dozen other leading-tier financial institutions follow suit and, of course, now presidential candidate Kennedy is talking about backing the dollar with Bitcoin. This asset class is here to stay. There will be bumps and hiccups along the way, but the direction is clear to me.
CT: How do you foresee progress of the BlackRock spot ETF and its effect on Bitcoin should it launch?
CE: The BlackRock ETF approval will be huge for the industry.
Related: Bitcoin traders say ‘get ready’ as BTC price preps 2023 bull market
BlackRock is the biggest asset manager in the world, and its (and regulatory) seal of approval will allow a new wave of capital to flow into the market. Many institutions sat on the sidelines last year due to concerns and uncertainty regarding crypto regulation. ETF approval will be a big rubber “yes” stamp for Bitcoin.
ETFs also arguably make it easier for institutions to put Bitcoin on their balance sheet, as they don’t need to worry about custody or even entering the crypto space. So it opens a lot of doors. The best comparable we have for this event is the gold ETF launch in 2004. Interestingly it launched when gold was down 50% (much like Bitcoin is today). What followed was a massive +350% return, seven-year bull run.
Essentially the Bitcoin ETF is just another goalpost on the pathway to broad regulatory acceptance and establishment of Bitcoin as a serious asset class. And it has big implications.
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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.
