Bitcoin’s Looking Stronger Than Its Current Price Suggests

From insightful on-chain data to Bitcoin ETF inflows and dovish tones from the Fed, it looks like the stage is set for Bitcoin to have an exciting fourth quarter in 2024. 🚀

Let’s jump in and talk about what’s been happening! 

The Fed’s going to make a move, but we don’t know when or by how much 🤷‍♂️

Every August, the annual Fed meeting in Jackson Hole takes place, and investors look to the Fed Chairman to give any indications of where interest rates are going next. 

The Fed hasn’t changed rates since July 2023, so the anticipation leading up to Jerome Powell’s speech was high. 

In his own words, inflation wasn’t transitory (duh!), and after a few months in 2023, they had to take a more hawkish course. Thus far, everything seems to be working. At least they see positive change happening, but it’s not good enough, and a new course has to be set. 

While he didn’t state concretely when cuts would occur, he implied that they would soon change their “bias”—yes, that is the word he used—to get back to their goal of 2% inflation. 

According to Powell, inflation is decreasing, but they need to boost the economy more. 

Analysts indicated that this could hint at rate cuts sooner rather than later, which markets took as a bullish signal, with Bitcoin rallying significantly following his speech, crossing the $64,000 price tag.  📈

However, the rally didn’t last long, and Bitcoin dropped to below $60,000 shortly after. 

For now, investors seem to remain skeptical about how soon the Fed will lower rates, so we’ll have to wait and see when this price catalyst will give the orange coin a further boost.  

U.S. Spot Bitcoin ETFs Saw Constant Inflows This Month 📈

While the Bitcoin price dipped by more than 15% in the last 30 days, Bitcoin ETF investors seemed to take advantage of this opportunity to buy more shares. 

The ETFs had 22 trading days for the whole of August. Remember, ETF trading is closed over the weekend and doesn’t allow 24/7 trading.

All U.S. Bitcoin ETFs saw net positive inflows on 14 out of the 22 trading days in August.

And that happened in a down month for Bitcoin when the overall crypto market sentiment wasn’t very positive. 

What’s also exciting about the Bitcoin ETF flows data is that you always saw inflows on the days following price dips. 

That means that institutional investors—usually more conservative investors—are starting to notice that they could miss the boat with Bitcoin if they don’t diversify into the digital currency. 

At one point, all ETFs saw an entire week of inflows. 

A very bullish signal!  💪

75% of the circulating Bitcoin supply hasn’t moved in the last six months 🚀

We know from Bitcoin’s historical price development that HODLers (i.e., long-term investors who haven’t sold) have been rewarded—and substantially at that! 

Thanks to data from Bitcoin Magazine Pro, we can take a more detailed look into how Bitcoin investors are holding on to their coins. 

Here’s what it shows: 

75% of the circulating Bitcoin supply has not been moved in the past six months, indicating a strong HODL trend. 

This means that investors buy Bitcoin, send it to their wallets, and keep it there. They either use it as a medium-term investment, anywhere from six to twelve months, or they utilize it as a store of value and hold it for the foreseeable future. 

Bitcoin Magazine displayed this on-chain data in what it calls HODL waves. A HODL wave starts when an investor sends Bitcoin to a wallet and keeps it there without transferring it to an exchange or brokerage account. 

A HODL wave can last anywhere from 24 hours to 10+ years. The longer investors hold, the more convinced they are of Bitcoin. 

So, according to this data, most Bitcoin investors are bullish on the digital currency and aren’t selling it despite the bumps in the road that this year’s bull market has experienced. 

Why Life Planning Is the Key to Financial Success ✅

The latest episode of my Proof of Words Podcast featured Morgan Rochard, an experienced financial advisor and author.

 This is a great episode for anyone considering consulting a financial planner.

Morgan explains how understanding personal goals and life circumstances can lead to more effective financial planning, particularly for those interested in Bitcoin and digital assets.

She also talked about the need for a balanced approach to investing, which includes both traditional and digital assets, and stressed the importance of staying informed about the evolving financial landscape. 

This is a great episode for anyone considering consulting a financial planner. You can tune in here to watch the full episode!

Also, make sure to pre-order Morgan’s book. I’ll also be grabbing a copy! 

Your fellow stacker in sats,

Patrick Lowry

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