Summary Bitcoin's chart shows a constructive trend, with animal spirits returning, suggesting a potential rally above $100k per coin. Bitcoin's correlation with tech stocks has increased since spot ETFs were approved. That said, it remains a strong anti-fiat asset as global M2 rises. Technical indicators are positive, with Bitcoin breaking key resistance levels and moving averages, signaling a potential upward price movement. ProShares Ultra Bitcoin ETF offers a leveraged exposure to Bitcoin's rally, but it's crucial to understand the risks of 2x leveraged ETFs. In my recent coverage of Bitcoin ( BTC-USD ) I've held a more cautious view due to a variety of factors. Among other things, the capital flow story was deteriorating through March and the chart appeared to be going through a consolidation phase that allowed for more price discovery between the $75k and $87k per coin range. After two months, Bitcoin's chart looks far more constructive and animal spirits appear to be returning to the market. In this article, we'll look at Bitcoin's recent correlation with US equities, implications from the daily and weekly price charts, as well as why I think the ProShares Ultra Bitcoin ETF ( BITU ) can be a useful tool for leveraging a Bitcoin rally back over $100k per coin. Correlations Bitcoin's correlation with tech stocks has been trending higher since spot ETFs were approved in the United States in January 2024: BITO, QQQ 30 Day Rolling Correlation (Portfolio Visualizer ) While there have been occasional dips in that correlation throughout the last 15 months, BTC has indeed had a closer relationship with the equity market than it has with the something like Gold ( XAUUSD:CUR ) over the last three and half years: Correlations BITO QQQ SPY GLD ProShares Bitcoin ETF ( BITO ) 1 0.44 0.43 0.11 Invesco QQQ Trust ( QQQ ) 0.44 1 0.96 0.14 SPDR S&P 500 ETF ( SPY ) 0.43 0.96 1 0.16 SPDR Gold Shares ( GLD ) 0.11 0.14 0.16 1 Source: Portfolio Visualizer, Asset correlations for time period 10/19/2021 - 04/24/2025 based on daily returns This is perhaps to the chagrin of Bitcoiners who view the asset as the digital equivalent of Gold - the latter of which has been on a rocket ship ride since breaking above $2,000 per ounce in early 2024. However, while investors/speculators can debate Bitcoin's past, present, and future as a 'safe-haven' asset, there is very little doubt in my own mind that Bitcoin continues to be a terrific anti-fiat trade. And history shows that as global M2 rises, the fiat-denominated price of BTC increases: BTC vs Global M2 (BGeometrics) Thus, as global M2 continues to rise, it stands to reason that BTC should follow. Consider the last time global M2 growth hit the 6% level - where it again currently stands now - BTC nearly doubled from $57k per coin in September 2024 to well over $100k in early 2025. To be clear, none of this means the same has to happen again, but given the level of debt throughout the global economy and the propensity for global governments to print when the going gets tough, BTC is not an asset that I think would be wise to short. Especially given what I see to be a clear technical breakout here in late-April. Technical Viewpoint When I look at Bitcoin technical indicators, I generally like to keep daily and weekly time-frames as the primary drivers of my decisions. Looking at the daily chart first, I see several positive signs: BTC Daily Chart (TrendSpider) Bitcoin held the 50-day MA for 4 straight sessions before moving convincingly higher on April 21st The coin has rallied through both the 100 and 200 day MAs in the sessions since It has taken out horizontal resistance at $90k It broke above trend-line resistance that dates back to January And the 'Crypto Fear and Greed' index has moved convincingly out of fear and into greed Shifting to the weekly chart, I've typically looked to the 8 and 20-week moving averages as my favorite indicators for increasing or decreasing exposure in the asset and its proxies. BTC Weekly Chart (TrendSpider) As of article submission, the weekly chart setup looks terrific. After battling with the 8-week MA for 4 consecutive weeks, we have a clear breakout above the 8 week and 20 week with our current candle. Something to keep in mind is the 8 week is still below the 20. But it does appear as though the 8-week MA will generate a week-on-week increase for the first time since February. Given everything I just laid out, I think it's reasonable to expect the price to head upward. Why BITU? I have covered BITU for Seeking Alpha in the past. For more of a fund-oriented view of the product, I'd encourage readers to get a proper sense for the risks associated with 2x leveraged ETFs. These are not products that are intended for long term holding, and they will decay over long periods of time due to daily re-balancing. Comparing BITU to a similar 2x fund as well as other Bitcoin-related ETFs, BITU is on the smaller side at under $1 billion in AUM: Fund Name Inception Expense Ratio AUM ProShares Ultra Bitcoin ETF 04/01/2024 0.95% $933.71M 2x Bitcoin Strategy ETF ( BITX ) 06/27/2023 1.90% $2.39B iShares Bitcoin Trust ETF ( IBIT ) 01/05/2024 0.25% $54.48B ProShares Bitcoin ETF 10/18/2021 0.95% $2.40B Data by YCharts Data by YCharts

2025-04-26 07:24

More on Crypto Bitcoin Dominance Continues Decimating Altcoins Search For A Safe Haven - Consider Bitcoin Bitcoin: Navigating Markets With An Eye On Risk Bitcoin set to rise W/W, reclaims $90K mark Cathie Wood projects bitcoin to soar to $1.5M by 2030 according to Ark’s bull case

2025-04-25 22:11

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2025-04-25 21:18

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2025-04-25 21:14

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2025-04-25 18:20

Summary Strategy is breaking out after a 40% drop from its ATH. Bitcoin's bullish trend, confirmed by technical analysis, supports the investment thesis for MSTR, which has significant Bitcoin holdings. MSTR's chart shows a strong breakout, with the potential to reach $700 if Bitcoin hits $120k. Despite high volatility and risks like geopolitical tensions and competition, MSTR presents a compelling opportunity for those bullish on Bitcoin. Thesis Summary Strategy ( MSTR ) is down over 40% from its ATH, but after some consolidation, it seems the stock is breaking out. The same can be said about Bitcoin, which has formed a clean bottoming pattern and is now above key resistance. While Saylor has been buying the dip, I’m buying MSTR on the breakout as I think the stock has the potential to more than double from here. Saylor Buys The Dip You can fault Saylor for many things, but his conviction in Bitcoin is not one of them. While markets were tanking, Saylor continued to buy Bitcoin through Strategy, which bought over 6556 Bitcoin between May 14-20. The Bitcoin was purchased at an average price of $84.8K, a level which Bitcoin has now surpassed by some margin. The company’s total Bitcoin holdings now stand at 538,200, with an average price of $67.8 K. We can’t deny, as I’ve discussed before, that with every purchase, Strategy’s risk increases, as this increases the average price. However, the strategy is paying off so far. But can Bitcoin keep rising? Bitcoin Is Looking Bullish The great thing about technical analysis is that it gives us an impartial way of assessing price trends. Bitcoin’s trend is quite unequivocally up. BTC TA (Trendspider) After retracing from its high, Bitcoin began to do what it does ahead of any big move: consolidate. This is exactly what we saw happen, for example, back around August, before the move above $100K. But Bitcoin gave us some pretty clear signs that a bottoming was taking place, as we saw a divergence in the RSI and a bullish cross in the MACD. Bearishness was still warranted until we broke the 200 EMA. This confirms Bitcoin is in a new uptrend, in my opinion, which should take us to new highs. MSTR Breaks Out Strategy’s chart is arguably even more bullish. MSTR TA (Trendspider) While the 200 EMA did briefly break, it acted as significant support. As soon as the RSI entered oversold territory, the stock bottomed. After a double bottom, we now look ready to break out. MSTR is set to open around $355, taking us above the recent high and putting us into the area where the stock ranged for a few months. We’ll encounter some resistance here, but I believe this is a valid breakout and a reason to buy MSTR. MSTR Could Double If we measure the length of this decline and project the 1.618 fib extension, that gets us towards $700. This also makes some sense if we look at the potential Bitcoin price and NAV Premium: MSTR NAV Premium ( Strategy Tracker ) If Bitcoin can reach $120,000, which I’ve had as a target for a while, and we apply a multiplier of 2,53, that puts MSTR at $700. This is higher than today, but within what we’ve seen during peak euphoria in Bitcoin. In terms of the valuation, multiples have contracted since the peak of the bull market, and this is reflected, for example, in the Price/Book ratio, which is ultimately another way of looking at the Premium/NAV. MSTR Valuation (SA) Moving forward, there's potential for this multiple to expand again, but a lot will hinge on the strategy outlined in the coming quarter. Q1 Outlook With Q1 around the corner (May 1), it's also important to talk about the coming expectations and what to look for. Key Points Net Loss The company is expected to deliver a net loss in Q1 due to the fact that it has accumulated an unrealized loss on its bitcoin holdings. Strategy has warned of a potential $5.9 billion loss, though the exact number will depend on where Bitcoin is at the time of the release. Fair Value Accounting Starting this quarter, MSTR will be adopting the Financial Accounting Standards Board's [FASB] fair value accounting standard. This will allow the company to report the value of its Bitcoin holdings at the current market price, rather than the lowest price since the acquisition. Therefore, earnings should be a much better reflection of the true success of the company. Raising Capital and Bitcoin Purchases In Q1 2025, Strategy raised $7.69 billion through share offerings and has used up around $1.92 billion since then. The most important point of the presentation will be to understand what Saylor plans to do in terms of deploying more capital and potentially raising more money. The 1/21 Plan outlined previously aims to raise $42 billion over the next three years. Macro Outlook There’s a lot of bullish currents underpinning Bitcoin’s appeal here, namely the potential for more monetary inflation and stability. In this last sell-off, Bitcoin has held up quite well and is now leading, showing it can act as a hedge while also capturing upside. Bitcoin is proving itself as a valuable asset to hedge against uncertainty and., most importantly, monetary debasement. This continues to be my base case for the coming years and even decades. The current US deficit is unsustainable, and I expect this will be brought down with the help of inflation and evaluation, not unlike the 1970s. US debt/GDP (FRED) Furthermore, let's not forget we have a very crypto-friendly administration, and there's a lot of potential for further tailwinds and positive news to take Bitcoin to new levels of adoption and higher prices. Risks Of course, it’s still early to call a bottom, though we have strong evidence. Volatility has been incredibly high in recent weeks, and with good reason. Any number of things could derail Bitcoin’s progress: geopolitical tension escalation, inflation and recession stand out as the three clearest. This would be very bad news for MSTR, especially, as I mentioned above, given that Saylor keeps buying the dip and increasing his average price. On top of that, more and more companies are joining the Bitcoin game. Marathon ( MARA ), for example, is also accumulating Bitcoin now, and this will eventually erode MSTR’s premium. And another exclusive Bitcoin fund , Twenty One, has just opened its doors. This company aims to do pretty much the same as MSTR. On the one hand, it means there is now competition, though on the other, it validates MSTR's business model. Final Thoughts All in all, I like the set-up here in MSTR given the fact that I am quite bullish on Bitcoin. If Bitcoin can reach $120K, then I think MSTR could double from today’s price. This is no doubt a volatile stock and not for the faint of heart, so make sure you go into this with a clear plan and strategy.

2025-04-25 15:00

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2025-04-25 08:59

Summary GDLC's NAV discount has compressed to 10%, trading at par based on my 'adjusted NAV' framework, reflecting BTC and ETH weightings. With an 80% Bitcoin allocation, GDLC may not be ideal for altcoin rallies, despite potential spot ETF approvals for XRP and SOL. The fund's heavy BTC exposure challenges its effectiveness for altcoin-focused investors; single-asset ETFs may offer better returns. GDLC remains a 'hold' for passive investors, but active altcoin buyers should consider alternative funds for more direct exposure. It has been approximately five months since my last Seeking Alpha article covering the Grayscale Digital Large Cap Fund (GDLC). It's a fund that I've covered a half dozen times going back to 2022 and one that I've often provided readers with an 'adjusted NAV' valuation based on my own framework. From November: For those who have not seen the prior work, my 'fair value' calculation zeroes out the altcoins after BTC and ETH and assigns a full valuation to the BTC and ETH in the fund. With the increasing likelihood that more spot ETFs for altcoins may enter the market this year, GDLC's NAV rate discount has further compressed down to just 10% from the 17% discount offered by the market back in November. More importantly, based on my 'adjusted NAV' framework, the fund essentially trades at par given current weightings to readily available spot ETFs for digital assets in the US market. In this update, we'll look at the current makeup of the fund and assess if GDLC is the right way to pay a potential 'alt season' in the digital asset market. Current Holdings & Discount Rate Asset Allocation Assets/Share Weight Bitcoin ( BTC-USD ) 0.00036456 80.60% Ethereum ( ETH-USD ) 0.00221657 9.37% XRP ( XRP-USD ) 1.06819845 5.61% Solana ( SOL-USD ) 0.00939617 3.33% Cardano ( ADA-USD ) 0.66104994 1.09% Source: Grayscale, as of 4/23/25 As has been the case since I've been covering GDLC, the largest allocation of the fund's capital is to Bitcoin. This was actually my original critique when I first covered the fund; mainly, that a product that aimed for digital asset diversification having such a large BTC weighting perhaps defeated the purpose of buying an 'altcoin' fund. Though it should be noted that this allocation to Bitcoin has almost certainly helped the fund's NAV rate discount compression since 'crypto winter' back in 2022. Currently, that discount stands at just over 10%: ASSETS UNDER MANAGEMENT $670,308,275.58 SHARES OUTSTANDING 15,867,400 NET ASSET VALUE PER SHARE $42.24 MARKET PRICE $37.89 DISCOUNT TO NET ASSET VALUE 10.30% Source: Grayscale, as of 4/23/25 If readers think back to my framework for creating the 'adjusted NAV' of GDLC, the combined 90% allocation to Bitcoin and Ethereum essentially puts the fund at my adjusted 'fair value' already. However, with the US political landscape changing from crypto-antagonism to one that is as more open to the asset class, should this fund trade closer to the real NAV rather than my adjusted NAV? There is certainly an argument to made that it perhaps should. But the next question I have about GDLC in 2025 is pretty simple; is this fund the right way to play a potential rally in the altcoin market? I'm much less certain that the answer to that question is 'yes' given how exposed the fund is to BTC. Bitcoin Allocation & Altcoin Exposure As far as I can tell, Grayscale no longer offers a historic breakout of GDLC holdings data by day. Thus, to assess the long-term Bitcoin allocation that has historically been represented by each GDLC share, I've referenced my prior articles. That data is shown in the table below, with dates hyperlinked to the source articles: Historic Weightings BTC % ETH % Remaining % Total Holdings August 2022 63.50% 31.20% 5.30% 5 June 2023 70.32% 27.05% 2.63% 5 August 2023 69.97% 26.97% 3.06% 5 March 2024 69.33% 22.39% 8.28% 6 September 2024 75.80% 17.80% 6.40% 5 November 2024 75.50% 16.30% 8.20% 5 April 2025 80.60% 9.37% 10.03% 5 Source: Grayscale, prior articles Not only is the current 80.6% allocation to Bitcoin the largest BTC weighting since I've been covering GDLC, but the 10% exposure to alternative coins is the largest that I can recall. This is no doubt due, in part, to the performance of coins like XRP and SOL. But I think it also speaks to the significant under-performance of ETH; which has fallen in fund weighting by 70% in less than 3 years. ETF Analyst Expectations as of 2/10/25 (James Seyffart/X) I shared this graphic in a prior Grayscale piece and I think it's useful for GDLC as well. Bloomberg's ETF analysts have a positive outlook on ETF approval odds for both XRP and SOL. If that does indeed come to fruition, it would mean ADA is the only cryptocurrency in GDLC that doesn't have a spot ETF in the US market. At just 1% of AUM allocated to ADA currently, it could easily be argued that GDLC should trade essentially at NAV or slightly lower. Even in that scenario, the re-rating for GDLC as a result of XRP and SOL spot ETF approvals would be closer to 8 or 9% higher coin prices being equal. At that point, the merits of the fund itself would likely be the biggest driver of future GDLC returns. Bitcoin Dominance (CoinMarketCap) In a market that has increasingly become dominated by Bitcoin over the last two and half years, the merits of a fund like GDLC likely become challenged. On one hand, Bitcoin's surge to 63% of the total crypto market is perhaps a signal that a turnaround for altcoins is warranted based on historical trends. On the other hand, with just 20% combined allocation to ETH and other alts, GDLC might not actually be the best way to play a reversal in BTC dominance. Closing Thoughts I don't think 80% allocation to Bitcoin is what altcoin buyers would be interested in if nearly the entire fund could be replaced with allocation to four single-asset spot ETFs at an individual investor's own discretion. For a 'set it and forget it' type of fund that could benefit from higher crypto prices, GDLC probably works fine. Especially given what is still a real NAV discount of 10%. But if BTC begins to lose market share to ETH, SOL, XRP, or ADA, the returns from GDLC will ultimately lag more direct exposure to those assets through alternative funds. There are several spot ETH ETFs already. Though it trades at a dwindling premium, Solana bulls have the Grayscale Solana Trust ( GSOL ) as an option. Ripple bulls could look to something like the Teucrium 2x Long Daily XRP ETF ( XXRP ) for shorter term trading. And this is before spot ETFs enter the market - which is a catalyst that could manifest this year. Given all this, I'm reiterating GDLC as a 'hold' and suspect that altcoin buyers will likely do better piecing together an altcoin portfolio using single-asset funds and lower-cost ETFs.

2025-04-25 06:59