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  • Bitcoin wallets with 100+ coins hit new one-year high

    Bitcoin wallets with 100+ coins hit new one-year high

    • Bitcoin addresses with 100 or more coins hit 16,120 on 19 December 2022.
    • Each address is worth $1.67 million at current prices, increasing the number of Bitcoin millionaires to the highest level since December 2021.
    • Data also shows hodling is on the rise despite crypto winter, with 46% of BTC last active in 2+ years and 1.6 million coins last active in 1-3 months.

    Bitcoin continues to consolidate around $16,700 after weathering recent sell-off pressure. Bears remain very much in the picture, given last week’s jump to above $18,000 and then the sharp fall to current levels.

    But there’s an opportunity in the midst of all the contagion – and that is what Bitcoiners are capitalizing on.

    Addresses with 100+ coins hit 1 year high

    According to the on-chain and exchange flows monitoring platform Glassnode, sharks and whales have aggressively added to their overall holdings in the past few days.

    Indeed, as the flagship cryptocurrency’s price hovers above its notable base on Monday, on-chain alerts for BTC indicate that addresses with 100+ bitcoins now hold the most coins since last December. Per the data, large accounts with at least $1,670,000 worth of BTC as of 19 December 2022 had jumped to 16,120.

    This is a new all-time high, with the last 1-year high being 16,106 addresses recorded on 23 December 2021.

    Bitcoin addressed holding 100 or more BTC reach one year high. Source: Glassnode

     46% of Bitcoin last active 2+ years

    As large investors scoop Bitcoin on the cheap, the number of hodlers (people who buy Bitcoin and hold onto their assets long term regardless of market conditions) has also increased. As CoinJournal recently reported, whales have been busy, buying over $726 million worth of BTC despite the FTX contagion.

    The latest data on this metric shows that the amount of BTC supply last active 2+ years has 46.3%, a 22-month high. According to Glassnode, 7.5 million BTC was being HODLed (the metric also counts lost coins) as Monday 19, December 2022. The last time the measure of hodled or lost BTC was this high was in January 2021.

    Meanwhile, the number of coins last active 1-3 months is now more than 1,603,380 bitcoins. The moving average translates to a 3-month high for the number of coins that have not moved for the last 30 to 90 days.

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  • Why has the Grayscale Bitcoin Trust discount hit an all-time high?

    Why has the Grayscale Bitcoin Trust discount hit an all-time high?

    Key Takeaways

    • Grayscale is the largest Bitcoin fund in the world
    • Discount to underlying asset (Bitcoin) has reached record levels, breaching 50%
    • Concern about reserves, higher fees and other hurdles explain the discount, which likely won’t close anytime soon

     

    The discount to net asset value of the Grayscale Bitcoin trust is at all-time highs. The discount briefly pushed past 50%, before pulling back slightly to where it currently sits at 48.8%.  

    This comes off the back of the SEC reaffirming its reasons for denying Grayscale’s application to convert the trust into an exchange-traded fund.

     The Grayscale Bitcoin Trust is the largest Bitcoin fund in the world, but it has rarely traded at the same level as its underlying asset, Bitcoin. The above chart shows that it had, until this year, traded at a premium since its launch compared to Bitcoin.

    This fund allows accredited investors to gain exposure to Bitcoin without worrying about storing or managing their holdings. It previously traded at a premium as demand for shares surged, with institutions wanting Bitcoin exposure. This convenience does come at a fee, however – and a rather hefty one at 2%.

    Demand falls for Grayscale in 2022

    Since March, the Grayscale shares have been trading at a discount to Bitcoin. The fund has $10.7 billion in assets under management, a stark 65% fall in the last year, reflecting the bloodbath in the crypto markets.

    But the discount to Bitcoin means shareholders are getting hit twice as hard.

    “The fact that Grayscale’s Bitcoin Trust is now trading at nearly 50% discount is just awful for holders of GBTC. It really highlights the vast differences in structure quality between different investment vehicles,” Bradley Duke, co-CEO at ETC Group, told CoinDesk last week.  

    A decline in inflows has been borne out of greater competition as many competitive funds have launched, especially in Europe, as well as multiple filings for Bitcoin ETFs in the US. The discount is also because investors have no way to redeem their holdings for Bitcoin in the trust, but all the while are being charged a 2% fee.

    However, these factors have typically been dulled by arbitrage traders taking advantage of the dichotomy in prices. But happenings this year have reduced that, too.

    Concern about Grayscale’s reserves

    Over the last month, concern has swelled in the market that Grayscale’s parent company, Digital Currency Group (DCG) may file for bankruptcy. This is due to the issues surrounding crypto broker Genesis, whose parent company is also DCG.

    Genesis have denied they will imminently file for bankruptcy, but the firm was caught up in the FTX collapse and is currently undergoing restructuring. Genesis halted withdrawals on November 15th.

    This concern has been elevated by questions around Grayscale’s reserves. Namely, whether they are true to their word and are holding all the underlying Bitcoin securely. With many major crypto companies publishing proof of reserves in the aftermath of the FTX crisis in order to assuage customer fear, Gray scale refused.

    “Due to security concerns, we do not make such on-chain wallet information and confirmation data publicly available through a cryptographic Proof-of-Reserve, or other advanced cryptographic accounting procedure,” Grayscale wrote in a statement.

    As I wrote at the time, I really can’t fathom how security concerns are a factor here. The blockchain is built so that this kind of information is available to the public.

    Final thoughts

    All in all, the discount sums up investors’ concern around Grayscale, as well as the extra fees and other hurdles which exist compared to owning the underlying. Arbitrage trades are self-destructive by nature, and hence it is notable that the discount is so large and has persisted for so long.

    Then again, there is risk here, as the same thing which I have been writing about for a while now – a lack of transparency – means that it cannot be known for 100% certainty what is going on behind the scenes. And that is why we are seeing a 50% discount.

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  • SHIB holder number has hit a new milestone as it crosses 3 million wallets.

    SHIB holder number has hit a new milestone as it crosses 3 million wallets.

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  • Brandt says Bitcoin to hit $13k before setting a new all-time high

    Brandt says Bitcoin to hit $13k before setting a new all-time high

    Bitcoin is trading above $19k, but Peter Brandt believes it will reach $13k in the near term before setting a new all-time high three years from now.

    Peter Brandt, founder and CEO of proprietary trading firm Factor LLC, told CoinDesk TV in a recent interview that he believes Bitcoin will set a new all-time high in three years.

    However, before it does that, Bitcoin will trade for around $13,000 first. Bitcoin has been underperforming since the start of the year.

    Since reaching the $69k all-time high in November 2021, Bitcoin has lost more than 70% of its value. It has been trading below $20k in recent weeks but has maintained its price around the $18k-$19k level. Brandt said;

    “We [will] just chop between … let’s say $17,000 and $23,000,” said Brandt. “I think we will bottom here at some point in time, maybe early next year, but then I’m not looking for bitcoin really to become exciting again for another couple of years.”

    Peter Brandt is a technical trader that has been around since 1970. According to his predictions, it would take Bitcoin 32 months before it reaches a new all-time high again. 

    There have been talks that the US Federal Reserve will halt its interest rate hiking. However, Brandt doesn’t see that happening and expects a 75-basis point increase on Nov. 2. This would be followed by another 75 bps increase on Dec. 14. He said;

    “I think that the Fed knows that inflation is a killer. The Fed needs to regain its credibility. And to do that, I think the Fed really needs to bring inflation rates back down to at least 4%.”

    The cryptocurrency market has been mirroring other traditional financial markets, including stocks and commodities, in recent months. However, Brandt said he believes Bitcoin’s performance will be unique in the long run. He added that;

    “Bitcoin is going to be correlated with bitcoin eventually.”

    The $13k bottom suggested by Brandt differs from his opinion two months ago. In August, he suggested that Bitcoin could have reached its possible bottom, with BTC trading at around $21k at the time.

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