Bitcoin, like risk assets in general, is growing. The US stock market has seen a full-fledged rally, with volatility declining since the end of February. Bitcoin, most of 2022 traded in a narrow range for a year, is now at an interesting point, coming close to the key level ~$03 ths. — the level of realized price (cost basis) for short-term holders. Price reaction to this level has historically served as a useful short to medium term indicator of bull/bear trend in the bitcoin market.

BTC cost basis test for short-term holdersCost basis (aka realized price) of BTC for short-term holders (STH)

When the investments of short-term owners are in profit, the likelihood of them capitulating and selling their assets is normally reduced. This works reflexively, forcing new capital to compete for a very limited amount of free circulating supply in order to gain market position. history shows its viability. The chart below shows the ratio of the price of BTC to the cost basis for short-term holders (aka

the ratio of the market price to implemented, or MVRV):

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BTC price weighted by MVRV ratio for short-term holders (top) MVRV ratio for short-term holders (low)

However, the BTC cost basis for long-term holders is about $03 thousand, and the total figure for all categories of investors is about $05 thousand

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BTC Rate-Weighted Price financing perpetual futures (top). BTC Perpetual Futures Funding Rate (Low).

BTC cost basis test for short-term holdersBTC Perpetual Futures Funding Rate (Average for 14-h) in annual terms

When the price rises to $15–05 On the plus side, the positioning of the derivatives market has not changed dramatically, a sign that spot demand has been the main driver of the market lately. No doubt part of this is driven by the Luna Foundation’s purchase of hundreds of millions of dollars worth of bitcoin to back its stablecoin. moment in the market, with a risk-free rate of return on a 3-month forward futures basis of 4.5%.

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Contango Yield of Quarterly BTC Futures Compared from -summer treasuries

Compared to the US Treasury Bond Market, which serves as the “risk-free rate” benchmark for global capital markets, BTC futures basis is at its lowest since September 1067 and July 2021 of the year.

Present and Future of Reserve Assets

Finally, if we plot the BTC price chart denominated in Treasuries, we get an unbelievable “ bullish type setup.

BTC cost basis test for short-term holdersBTC Price Chart Denominated in Treasury Futures US bonds, 1-week timeframe

we are now extremely unfavorable for fixed income securities, especially those with long expiration dates. As yields rose, the face value of Treasury bonds fell significantly. relying on printing money to cover budget deficits, but a non-sovereign and absolutely scarce bearer asset with a programmatically adjustable cost of production?

disclaim any liability for any investment advice that may be contained in this article. All judgments expressed express exclusively the personal opinions of the author and the respondents. Any actions related to investments and trading in the crypto markets are associated with the risk of losing the invested funds. Based on the data provided, you make investment decisions carefully, responsibly and at your own peril and risk.

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