Research Summary
The report provides an in-depth analysis of Bitcoin’s on-chain data, focusing on its adoption, economics, supply, usage, and market value. It also discusses the impact of the recent launch of spot Bitcoin ETFs and how they have opened up new avenues for investors to access Bitcoin.
Key Takeaways
Bitcoin ETFs and Market Accessibility
- Increased Market Accessibility: The recent launch of spot Bitcoin ETFs, including BlackRock’s IBIT and Fidelity’s FBTC, has marked a historic moment in Bitcoin’s history. These ETFs have traded approximately $10B across three complete trading days, providing investors with a new way to access Bitcoin through traditional brokerage accounts and reducing the friction for asset managers to gain exposure to BTC.
Bitcoin On-Chain Data Analysis
- Transparency and Traceability: Bitcoin’s on-chain data, which is transparently available from the blockchain, allows for the precise tracking of each coin’s movements. This level of transparency and analysis is rarely seen in other asset classes.
- Bitcoin Adoption: The number of Bitcoin addresses holding at least 1 BTC recently surpassed 1M, rising from 800K in 2022, indicating a significant increase in Bitcoin adoption.
- On-Chain Settlement Value: Bitcoin settles billions of dollars every day without any intermediary, rivaling some other value-transfer systems. On the day of the spot ETF launch, $11B worth of Bitcoin moved on the blockchain.
Bitcoin’s Monetary Policy
- Issuance & Inflation: Bitcoin’s transparent and predetermined issuance schedule is one of its defining characteristics. The 4th halving, where issuance is cut in half roughly every four years, is set for late April.
Bitcoin’s Market Value and Realized Value
- Realized Cap: Realized capitalization, a unique analysis offered by blockchain data, values each unit of Bitcoin individually based on the price at the time it last moved on-chain. Bitcoin’s realized cap today stands at $440B, compared to its market cap of $830B.
- Market Value to Realized Value (MVRV): The MVRV ratio, found by dividing Bitcoin’s market capitalization by its realized cap, has been a reliable gauge of market cycles as it provides insight into the behavior of Bitcoin owners with profits or losses.
Actionable Insights
- Explore Bitcoin ETFs: With the launch of spot Bitcoin ETFs, investors and asset managers have a new way to gain exposure to Bitcoin. It’s worth exploring these ETFs and understanding their potential impact on the Bitcoin market.
- Understand On-Chain Data: Bitcoin’s on-chain data provides a wealth of information about its adoption, usage, and market value. Understanding this data can provide valuable insights into the Bitcoin market and its future trends.
- Monitor Bitcoin’s Monetary Policy: Bitcoin’s transparent and predetermined issuance schedule can have a significant impact on its market value. Keeping an eye on upcoming events, such as the 4th halving, can help anticipate potential market movements.
