And that’s not all: A nearly risk-free trade favored by big institutions -- which looks at the difference between Bitcoin futures and the digital currency’s price -- was, ahead of Bitcoin’s November record run, indicating investors were bullish about it continuing to rally. That spread has now narrowed, and data over the last 30 days suggests an average annualized return of just 3.58%, according to Strahinja Savic, head of data and analytics at FRNT Financial, an institutional crypto platform.
“We are neither in an aggressive bull market, nor are we in a bear market,” he said of what the data show. “Bitcoin, and the broader crypto market, are seeing the effects of macro uncertainty caused by rate hikes, Russia-Ukraine conflict, et cetera.”
So where does Bitcoin go from here? Valkyrie’s Wald says its sideways-trading pattern had also been noted in previous years.
“We even were locked in virtually the same range last year before hitting all-time highs in the fall,” she said. “Given this, and the record amount of investment we are seeing in the industry across the board, the momentum is slowly building for another rally, even if this is not being reflected right now in price action. We would not be surprised to see another record high before the turn of the year.”
The space, which is no longer dominated by just a handful of coins, is attracting billions in investments. The crypto boundaries have expanded over the last few years and the infrastructure now also sustains gaming platforms, nonfungible tokens trading and decentralized finance, among other things.
Mati Greenspan, founder and CEO of Quantum Economics, says he hopes Bitcoin stays in its tight trading range for a while. “That’s extremely good for the industry as a whole because we know that when the price movement is a bit depressed or quiet, that’s the time when stuff gets built,” he said in an interview.
“If we end the year around $40,000, I wouldn’t complain at all, I would be pretty happy,” Greenspan said, adding that he doesn’t rule out a run toward $60,000 or $70,000 again.
--With assistance from Lu Wang.
This article was provided by Bloomberg News.