July 29, 2024

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MARA Buys $100 Million in Bitcoin, Holdings Surpass 20,000 BTC

Bitcoin miner MARA has purchased $100 million worth of Bitcoin, bringing its total holdings to over 20,000 BTC. The company intends to adopt a full “HODL” approach, retaining all mined Bitcoin and periodically making additional purchases. This acquisition, alongside its previous strategy, reflects MARA’s confidence in Bitcoin as a long-term value asset. MARA’s balance sheet now holds nearly 0.1% of Bitcoin’s total supply, with the latest purchases estimated to total around 1,500 BTC. The firm plans to fund its operations using existing cash and capital markets, while also expanding into altcoin mining.

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Record $39.4B Bitcoin Open Interest Signals Imminent Price Breakout

Bitcoin futures' open interest has hit a new all-time high of $39.46 billion, surpassing the previous record of $39.03 billion from March 29, 2024. This surge suggests growing investor interest and liquidity in Bitcoin, potentially signaling an imminent price breakout. Over 75% of short-term Bitcoin holders were in profit as of July 24, indicating strong retail demand, while Bitcoin's increasing dominance in the crypto market hints at further price gains. Analysts like Benjamin Cowen and Rekt Capital suggest Bitcoin could aim for a new high of $71,500. The recent inflows into US-based Bitcoin ETFs, totaling $795 million over the past week, also support this bullish outlook. Bitcoin's current price stands 5.8% below its all-time high of over $73,750 recorded on March 14.

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Trump Vows to Fire SEC Chair Gensler and Establish Strategic Bitcoin Reserve if Elected

At the Bitcoin 2024 conference in Nashville, Donald Trump announced plans to fire SEC Chair Gary Gensler and halt the sale of the US's bitcoin holdings, creating a "strategic bitcoin reserve" if elected in November. He criticized Gensler's policies as overly punitive towards the crypto industry and pledged to end anti-crypto measures like "Operation Chokepoint 2.0." Trump also reiterated his intention to commute Silk Road founder Ross Ulbricht's sentence, oppose the development of a Central Bank Digital Currency (CBDC), and support stablecoins and bitcoin mining. During his speech, Bitcoin's price briefly dropped to $66,600 before rebounding to $68,500.

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Trading Desk Insights

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Bitcoin is making another attempt to break through the upper boundary of its trend channel that's been in place since March. A successful breakout could attract momentum traders and potentially drive the price to new all-time highs. However, a pullback towards the $64,000 mark seems more probable in the short term.

The Bitcoin Conference in Nashville over the weekend was nothing short of eventful. Former President Donald Trump delivered a highly anticipated speech, targeting Democratic lawmakers including Senator Elizabeth Warren, SEC Chair Gary Gensler, and the Biden administration. Trump criticized these officials for allegedly harming the industry by failing to provide clear regulations. He also announced his policy to retain the 210,000 Bitcoins currently held by the U.S. government, proposing the establishment of a National Strategic Bitcoin Reserve.

Switching gears to ETH ETFs, the interest on Day 1 was remarkable. Total ETH volume surpassed $1.1 billion, with flows of $108 million accounting for 16% of BTC flows at $655 million. Excluding the outflows from ETHE ($484 million) and GBTC ($95 million) conversions, ETH flows represent 79% of BTC flows. At the current rate of net outflow, Grayscale's ETHE could deplete its ETH holdings within weeks, much faster than GBTC. The larger outflows from ETHE compared to GBTC are likely due to ETHE trading at net asset value upon conversion, while GBTC was still at a discount when the Bitcoin ETFs launched.

Equity futures climbed on Monday as Wall Street prepared for a busy week of corporate earnings. This week’s reports will be crucial in determining if tech stocks, and by extension, crypto assets, can rebound. Notable earnings releases include PayPal, AMD, and Microsoft on Tuesday; Meta on Wednesday; and Amazon, Apple, and Coinbase on Thursday.

Additionally, the Federal Reserve meeting this week is a key event to watch. The central bank will release a new policy statement on Wednesday. While no interest rate cuts are expected this week, traders will be keen to glean any hints about potential moves in the September meeting.

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Disclaimer

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This research is for informational use only. This is not investment advice. Other than disclosures relating to Secure Digital Markets this research is based on current public information that we consider reliable, but we do not represent it is accurate or complete, and it should not be relied on as such. The information, opinions, estimates, and forecasts contained herein are as of the date hereof and are subject to change without prior notification. We seek to update our research as appropriate.

Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation. The price of crypto assets may rise or fall because of changes in the broad market or changes in a company's financial condition, sometimes rapidly or unpredictably. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. Fluctuations in exchange rates could have adverse effects on the value or price of, or income derived from, certain investments. We and our affiliates, officers, directors, and employees, excluding equity and credit analysts, will from time to time have long or short positions in, act as principal in, and buy or sell, the securities or derivatives, if any, referred to in this research.

The information on which the analysis is based has been obtained from sources believed to be reliable such as, for example, the company’s financial statements filed with a regulator, company website, company white paper, pitchbook and any other sources. While Secure Digital Markets has obtained data, statistics, and information from sources it believes to be reliable, it does not perform an audit or seek independent verification of any of the data, statistics, and information it receives.

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Crypto and/or digital currencies involve substantial risk, are speculative in nature and may not perform as expected. Many digital currency platforms are not subject to regulatory supervision, unlike regulated exchanges. Some platforms may commingle customer assets in shared accounts and provide inadequate custody, which may affect whether or how investors can withdraw their currency and/or subject them to money laundering. Digital currencies may be vulnerable to hacks and cyber fraud as well as significant volatility and price swings.

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