Trading around $62,000, bitcoin is quickly approaching its all-time high from November 2021, when the digital currency reached $69,000. So what explains this meteoric rise? We come back to this in the Cryptic Analysis, after the essential news of the week.

Block 1: Essential news

MicroStrategy buys back bitcoins (again and again)

MicroStrategy, led by Michael Saylor, recently acquired 3,000 additional bitcoins, bringing its total investment to over $10 billion in BTC, with a reserve of 193,000 Bitcoins. This operation marks the firm's second major acquisition in February, at an average price of $51,813 per BTC. With these purchases, MicroStrategy consolidates its leading position among companies investing in Bitcoin, despite an unrealized gain of more than $4 billion. At the same time, the stock of MicroStrategy (MSTR) has seen an increase of 200% over the past year, reflecting the correlation between the price of Bitcoin and the value of the company on the stock market.

End of the game for FTX Europe

FTX sold its European subsidiary, FTX Europe, for $32.7 million, a sum much lower than the $376 million paid when it was acquired in 2021 by Sam Bankman-Fried through Alameda Research. This sale is part of a dispute concerning a “massive overpayment” of $323 million. The resolution of this dispute led to a compromise, thus avoiding prolonged and significant legal costs. This transaction comes as Sam Bankman-Fried faces major criminal charges, with a March 28 ruling that could sentence him to many years in prison.

Binance: A record fine of $4.3 billion

Binance reached a plea agreement with the American justice system, agreeing to pay a record fine of $4.3 billion for offenses related to the fight against money laundering. This sanction, one of the largest ever imposed on the United States in this area, follows the admission of guilt of the former CEO, Changpeng Zhao. Binance is also committed to strengthening its compliance tools, including the Know Your Customer (KYC) process, and must implement external compliance monitoring for three years.

Kraken opposes the SEC

The U.S. Securities and Exchange Commission (SEC) is facing resistance from cryptocurrency exchange Kraken, which is challenging a legal proceeding initiated by the SEC over alleged violations of the Exchange Act. Kraken rejects the accusations, pointing to a lack of clear guidance from the SEC and an abuse of power in its fight against the cryptocurrency industry. The platform relies on arguments similar to those used in the lawsuit against Ripple, asserting that cryptocurrencies are not inherently financial securities according to the Howey test. The final decision now rests with the Northern District Court of California.

Block 2: Cryptic Analysis of the week

Bitcoin has gone vertical since Monday. The digital currency is up more than 20% in the last 72 hours and more than 40% in February. Trading above $62,000, bitcoin is within $7,000 of its all-time high of $69,000 reached in November 2021.

BTC/USD
Zonebourse

This type of performance is rare in traditional financial markets, especially if there is no obvious catalyst such as an earnings announcement or an M&A transaction. But being in the crypto sphere, why has bitcoin appreciated rapidly in recent weeks?

The obvious answer, of course, is that the commercialization of bitcoin spot ETFs has created strong demand for the asset. Now many institutions and individuals who are wary of getting involved with cryptocurrency platforms can finally gain direct exposure to bitcoin via more traditional means. Yesterday, these stock products saw net inflows of $576 million. The ETFs also officially crossed the $6 billion mark in cumulative net inflows since their launch. BlackRock's fund leads with $8 billion in assets and 5 ETFs have at least $1 billion in assets under management.


Status of Bitcoin Spot ETFs
SoSo Value

As pointed out by those responsible for Bitmex Research, capital flows into the Bitcoin Spot ETFs represent 9,510 bitcoins of net inflows. To put things in perspective, the bitcoin network produces 900 net new bitcoins per day.

Furthermore, the total volume of deposits and withdrawals on cryptocurrency exchanges, such as Coinbase or Binance, continues to increase, reaching a staggering $5.57 billion daily volume in and out, rivaling the activity observed during the market ATH in 2021.

Volumes on cryptocurrency platforms
Glassnode

Complementing this, short-term bitcoin holders (BTC acquisition date less than 155 days) have consistently deposited over $2 billion per day in volume since mid-January, while also setting a new high of $2 billion per day. .46 billion dollars in volume deposited in total. This highlights the high degree of speculative interest within the current market structure.

The speculators are here
Glassnode

Bitcoin is also very dependent on the global money supply. The increase in the total global money supply, also known as M2, has historically supported the price of bitcoin and cryptocurrencies more generally. M2 is an estimate by the United States Federal Reserve of the amount of money in circulation, including cash held by individuals and money held in savings and checking accounts, as well as other liquid instruments short-term such as certificates of deposit.

Over the past decade, the price of Bitcoin has seen notable increases during periods of rapid M2 growth, supported by lower interest rates, quantitative easing, and fiscal stimulus. Conversely, during periods of monetary tightening by central banks, the cryptocurrency market has often struggled to maintain an upward trajectory. Notably, the 2021 bull market corresponded to overall M2 growth of 6% or more at the world's major banks, including the Fed, the European Central Bank, the Bank of Japan, and the People's Bank of China. The prospects of rate cuts in the coming months in Europe and the United States work in favor of bitcoin.

M2 VS BTC
MacroMicro

Finally, as a bonus, according to Tom Lee of Fundstrat, if you miss the top 10 days of bitcoin returns each year, you miss the majority of the return. The ultimate example of “time in the market is more important than market timing” is truer than ever in the case of bitcoin.

Returns on sessions of 10 best days of bitcoin

Fundstrat

Block 3: Tops & Flops

Cryptocurrency rankings
(Click to enlarge)

Zonebourse

Block 4: Readings of the week

Bitcoin Fee Falls During Satoshi Nakamoto Trial(Wired, in English)

A pilot stablecoin project in China?(Project Syndicate, in English).

Layer 2 is not a magic incantation (Bitcoin Magazine, in English)

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