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The recent increase in Bitcoin volatility and the growth in crypto derivatives volume are accompanied by a significant increase in price volatility.
Currently, BTC is showing an increase of 6.8%, reaching $62,992, after hitting a peak close to $64,000 on Wednesday. Let’s see all the details below.
Summary
Price movements: the Bitcoin crypto approaches $64,000
As anticipated, the ‘bull’ of Bitcoin returns, bringing with it a significant increase in price volatility. Currently, BTC is up 6.8% at $62,992, after reaching a high near $64,000.
Only this week, the price has recorded a gain of 21%. The CoinDesk 20 index, which serves as a broader market indicator, shows an increase of 7.5% to $2,326.
The 30-day realized volatility of Bitcoin, measured as the standard deviation of the daily percentage price change over the last 30 days, has increased to 46% on an annual basis, compared to 30% a week ago.
In the cryptocurrency derivatives market, activity is growing, with a record exchange of $374 billion in futures contracts, perpetual futures, and options in the last 24 hours, according to the Switzerland-based platform Laevitas.
This figure represents the highest number of trades in a single day since November 2021. The increase in demand for leveraged products indicates a higher risk appetite, with the potential for price instability caused by sudden liquidations.
Bitcoin miners for sale: inventory reduction in the midst of market growth
Bitcoin miners are selling more coins, reducing stocks in a growing market.
The data from Glassnode indicates a decrease of 8,426 BTC (530 million dollars) held in miner-related wallets since the beginning of the year, bringing the total to 1,812,482 BTC.
This decline started in the second half of October, when miners held over 1.83 million BTC.
Analysts at FRNT Financial attribute this trend to the upcoming halving of miners’ rewards and the ongoing dry weather conditions in China, which have catalyzed sales.
Morgan Stanley is currently evaluating the possibility of offering Bitcoin spot ETFs to clients of its large brokerage platform.
The United States Securities and Exchange Commission recently approved 11 spot bitcoin ETFs, and since then, billions of dollars have flowed into these products.
However, the floodgates of liquidity will open when registered investment advisor (RIA) networks and broker-dealer platforms like Merrill Lynch, Morgan Stanley, and Wells Fargo start offering these ETFs.
Morgan Stanley, a pioneer in alternative investments and private markets, manages over $150 billion in assets and was the first major US bank to offer access to bitcoin funds to its wealthy clients in 2021.
Bitcoin ETF: record volume with BlackRock in the lead
Bitcoin ETFs have once again set volume records, reaching the declared figure of 7.6 billion dollars, with BlackRock in a leading position.
Grayscale’s GBTC and Fidelity’s FBTC are among the next in line, with volumes of $1.8 billion and $1.4 billion respectively.
The entire Bitcoin ETF space has officially surpassed the previous high of 4.6 billion dollars, set on the launch day.
Eric Balchunas, senior ETF analyst at Bloomberg, highlighted that this officially marks the mania for Bitcoin ETFs. Emphasizing in particular that IBIT has traded more volume in the first two weeks than any other period.
Balchunas emphasized that the majority of the volume came from organic demand, indicating that algorithms were not used and the demand was mainly natural.
However, it also emphasized that the main platforms that have not yet included Bitcoin ETFs in their offering will need to pick up the pace.
Considering the current ATH of BTC at $69,000, the community expects Bitcoin to surpass that value, probably during Bitcoin’s halving scheduled for April 2024, if not earlier, given the anticipated increase in volatility due to the rise in BTC prices.
The halving of Bitcoin, scheduled for April 19, 2024, is expected to impact prices by destabilizing the value with a reduced token supply.
The previous halving was associated with reaching the price of $69,000, and it is expected that the inflation rate and long-term approach may continue to support the value of Bitcoin.