Zayden is currently at start-up incubator, WhatNot Studios in Bangkok, Thailand. Originally from Singapore, his inquisitive nature brought him overseas to gain experience and learn new things.
It is that same nature that got him into DeFi and Web3, often spending hours a day reading up on it. Self-proclaimed Web3 enthusiast, and investor in cryptocurrency.
Guest Author: Zayden Qu
At the beginning of this series on Techzi, Bitcoin’s price was hovering around around $40,000, in just over a month’s time, it has since increased over 60% reaching its all time high price of $69,000.
Hope you have been following and investing in crypto from the same time! A $10,000 investment from then would have profited you $6000 in just over a month!
Bitcoin Explodes to ATH price!
Just 3 days ago:
- Bitcoin’s price went up to $69,000 to break its all time high price
- It got rejected and the price dropped to $61,000 in just 5 hours.
- In another 10 hours, the price rose back up to $66,000. Since then it has been consolidating at this level.
This perfectly encapsulates the volatility and strength of Crypto & Bitcoin at the moment.
I would have expected a far longer rejection. In the past, it might have taken 10 days for the price to recover. But the fact that it only took 10 hours, means the current buying pressure is immense.
(Credits to HODL15Capital on X: https://twitter.com/HODL15Capital)
My Take: Naturally, the $69,000 level being its previous ATH price makes it a strong psychological resistance level for Bitcoin.
Many smaller holders of Bitcoin sold aggressively, I believe there are 2 main reasons:
- Many older investors who held onto their losses for over a year probably decided to finally sell their investments and leave Crypto for good after making back their losses.
- Many smaller holders of Bitcoin sold their Bitcoin for a profit in order to invest in smaller Crypto coins to get bigger returns.
However, the outlook on Bitcoin is still really positive, I believe it is only a matter of time before it breaks the ATH price again.
Are we stopping anytime soon?
(Credits to HODL15Capital on X: https://twitter.com/HODL15Capital)
Well, looking at the ETF flows, it does not seem like we are stopping anytime soon, the demand from the ETFs are slowly increasing with seemingly no signs of stopping.
Selling has been mainly from smaller holders and the ETF bought up the supply in mere 10 hours. As long as the demand from the ETFs remains, there is no reason to see why we will be stopping anytime soon.
My Take: As I have theorized, the huge rise of $IBIT share prices makes it much easier for asset managers in the investment firms to convince their clients to allocate their money into $IBIT which feeds into the buy pressure from ETFs.
I believe that the inflows from ETFs will increase exponentially first before plateauing. Once the ETF inflows plateau, that is when we might see the price of Bitcoin retrace dramatically. However, I still believe we are far from plateauing.
Genesis
Genesis again… The theory is that the major outflows that we are seeing from Grayscale in the last couple of days are from Genesis selling their $GBTC shares.
If that is true, we are likely to see the money return to the ecosystem as Genesis buys up Bitcoin to return their creditors in-kind.
(Credits to HODL15Capital on X: https://twitter.com/HODL15Capital)
My Take: Although it is not confirmed that the GBTC outflows are due to Genesis selling. We need not worry about it, the selling has not impacted the price too much and the other ETFs are more than making up for it.
In essence I believe this Genesis saga is behind us.
What other ways can you invest in crypto aside from buying crypto directly?
Investing in Crypto directly can be difficult and even dangerous. There is simply far too much uncertainty and too many scammers in the Crypto space.
Centralized exchanges supposedly offer security to your investments. However, like FTX, they might be corrupted.
Decentralized exchanges make you wholly responsible for your own security. This causes you to be easily susceptible to hacks and scams which is a common place in Crypto.
Coinbase
One of my favorite ways to indirectly invest in Crypto is investing in Coinbase ($COIN) on the traditional stock market. Coinbase is a centralized exchange for Crypto trading and the price of $COIN usually follows closely to the price of the Bitcoin and crypto market.
Advantages
- Coinbase is a custodian for most of the Bitcoin ETFs and is earning from them via custodian fees. They are also set to be the custodian for the same companies in the Ethereum ETF.
- They recently beat their earnings per share (EPS) estimates by over 4000% for Q4 of 2023.
- One of the most reputable centralized exchanges for Crypto.
Disadvantages
- Currently in a lawsuit against the SEC, a poor ruling might affect the price of $COIN.
- Experienced a major server crash recently following a huge increase in volume for Crypto trading.
Disclaimer: I have been an investor in $COIN stocks since the beginning of this series, when it was at $150 per share.
Bitcoin Spot ETFs
Needless to say, another way to indirectly invest in Crypto is via the ETFs offered by the various investment firms. The most popular one by volume by far is BlackRocks $IBIT. The $IBIT shares price follows the price of Bitcoin only, and is akin to investing in gold ETFs.
Advantages
- It is easier and less complicated to access $IBIT compared to Bitcoin directly.
- It is also safer as you won’t be susceptible to scams.
Disadvantages
- The return for investing in $IBIT is lesser then investing in Bitcoin directly.
- In the same period, Bitcoin increased by ~60%, $IBIT only increased by 40%.
- You don’t actually own any Bitcoin.
Bitcoin mining companies
Another group of stocks that follow the price of Bitcoin closely are Bitcoin mining companies. The most popular ones are Marathon Digital Holding ($MARA), CleanSpark ($CLSK) and Riot Blockchain ($RIOT).
Advantages
- Price action follows Bitcoin.
Disadvantages
- Requires much more research into the company.
- A company that only mines Bitcoin as a form of revenue is unlikely to be sustainable.
Another popular stock is MicroStrategy ($MSTR) They are a US Tech company that aggressively buys Bitcoin as investment, $MSTR price also follows closely with Bitcoin price. However, in my opinion, $MSTR has the advantage of having a separate business from Bitcoin.
