The Recovery of Bitcoin Price to All-Time Highs Could Be Quicker This Cycle, Says K33 Research
The latest report from K33 Research suggests that the recovery of the bitcoin price to all-time highs will be faster this time around. Currently, bitcoin is 36% off its all-time high of around $69,000 set in November 2021. Comparatively, it took 1,178 days to recover after the 2013 drawdown and 1,092 days after the 2017 drawdown. The analysts at K33 Research note that institutional demand for bitcoin is stronger than ever before, with major financial institutions actively participating in the crypto space. They believe that the current run-up in price is driven by a real and compelling narrative.
Anticipation for U.S. ETF Approvals Driving Market Demand
The upcoming decision on U.S. ETFs by the Securities and Exchange Commission (SEC) is fueling considerable demand in the market. The analysts at K33 Research argue that the current surge in price is due to investors accumulating exposure ahead of anticipated ETF launches. The SEC has previously approved futures-based funds but has yet to approve a spot bitcoin ETF. The next deadlines for decisions on applications from firms including BlackRock, Bitwise, VanEck, WisdomTree, Invesco, Fidelity, and Valkyrie fall in mid-January.
Genuine Flows from ETFs Will Determine Bitcoin’s Future
The analysts at QCP Capital warn that whether or not bitcoin revisits its all-time high depends on the genuine flows brought by actual ETFs in the first few weeks of trading. They caution that if these flows disappoint, it could lead to a “sell-the-news” moment next year. Bloomberg analyst James Seyffart predicts that potential spot bitcoin ETF approval could fall between January 5 and January 10. Data from the Chicago Mercantile Exchange suggests that institutional traders are not taking profits yet, with annualized premiums above 17% for bitcoin and ether.
Retail Traders Show Decreased Participation
Despite bitcoin’s significant price rise this year, retail participation has not increased. Retail demand is actually lower now compared to Q3 2022, according to website traffic data and exchange reports. Google search volumes for bitcoin and other crypto-related terms also show a decline. The analysts at K33 Research note that crypto-native derivative trading in the offshore market does not show signs of “retail froth” either, with funding rates remaining neutral. However, they believe that BTC still has the potential to rally further if it gains attention again.
Bitcoin Continues to Rally
Currently, bitcoin is trading at $43,747, up over 16% in the last week and 25% in the past month. It has returned to levels not seen since the Terra ecosystem crash in May 2022. Ether is also performing well, up 10% in the last week and 86% year-to-date. Solana has risen by 5% in the past week and over 500% this year. On the other hand, BNB has traded flat due to Binance’s legal and regulatory troubles, resulting in a 6% decline year-to-date.
Hot Take: Bitcoin Recovery Expected to Be Quicker This Cycle
The latest report from K33 Research suggests that the recovery of bitcoin price to all-time highs will be faster this time around compared to previous cycles. Institutional demand for bitcoin is stronger than ever before, with major financial institutions actively participating in the space. The anticipation of U.S. ETF approvals is driving market demand, and the upcoming decision by the SEC will be crucial. Retail participation, however, has not increased and remains lower than in Q3 2022. Despite this, bitcoin continues to rally and is currently trading at $43,747. The future of bitcoin’s price will depend on genuine flows from ETFs and potential spot bitcoin ETF approval.
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