Pent-up demand sends bitcoin soaring past $52,000
ETF numbers suggest a staggering buyer base moving bitcoin's realized price higher. Also, some urgent thoughts on rates.
Dear readers,
Bringing it back to the fundamentals for bitcoin can feel foreign to some—without coffeehouse adoption or any cashflows to speak of, most don’t associate bitcoin with the term fundamentals. Many couldn’t even articulate what underpins its value. Something about decentralization, we imagine.
But this type of thinking around bitcoin as purely a speculative asset is now ancient. A more sophisticated analysis recognizes $1 trillion in market capitalization and deduces that bitcoin’s value comes from those willing to mine it and those willing to purchase it: a desire to trade computing power or bank deposits for bitcoin transformed the digital collectible to a full-blown commodity, and what people assume its value to be when they send or receive it defines, more than anything, what it is worth. In on-chain analysis, we call this realized price, a metric distinct from the market price that just soared above $50,000. Bitcoin’s realized price is also on the move, and it’s the strongest signal of all. I’ll explain what that means, with some closing thoughts on rates.
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ETFs demonstrate bullish behavior
Before diving into bitcoin’s realized price movement, let’s first look at one of its primary drivers. After months, and to be honest, years of anticipation of these inflows, we’re finally starting to witness how this will all unfold. First, we start by seeing a steady clip of $500 million (10,000 BTC) daily inflows: