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- Last week, bitcoin and cryptoassets performed in line with other major asset classes as cross asset risk appetite remained relatively bullish.
- Our in-house “Cryptoasset Sentiment Index” has declined somewhat and now signals a neutral sentiment across cryptoasset markets.
- Chart of the Week: 80,000 BTC moved from previously unidentified wallets to new wallets in what appears to be a batch of transactions by early adopter and Bitcoin Cash (BCH) founder Roger Ver. These bitcoins represented old coins that had been dormant for 14 years – this has led to the second highest reading in Coin Days Destroyed (CDD) ever recorded. The metric Coin Days Destroyed combines the number of bitcoins that are being transferred with the number of days they have been dormant and gives an indication of the number of old coins being on the move.
Chart of the Week
Performance
Last week, bitcoin and cryptoassets performed in line with other major asset classes as cross asset risk appetite remained relatively bullish.
Bitcoin even recorded its highest weekly closing price ever. Nonetheless, the euphoric market sentiment was somewhat tainted by larger bitcoin transactions that happened on Friday. More specifically, 80,000 BTC moved from previously unidentified wallets to new wallets in what appears to be a batch of transactions by early adopter and Bitcoin Cash (BCH) founder Roger Ver.
These bitcoins represented old coins that had been dormant for 14 years – this has led to the second highest reading in Coin Days Destroyed (CDD) ever recorded (Chart-of-the-Week). The metric Coin Days Destroyed combines the number of bitcoins that are being transferred with the number of days they have been dormant and gives an indication of the number of old coins being on the move.
The older the coins and/or the higher the number of bitcoins being transferred – the higher the Coin Days Destroyed. The last time we had a comparable spike in CDD was during the summer of 2024 when the German government sold 50,000 BTC.
The movement of large volumes of older coins usually tends to be a bearish signal for bitcoin. Based on our estimations, whale liquidations of this size should only have a price effect of approximately -3.4%. So, investors shouldn't expect significant drawdowns from these liquidations alone unless they spur additional liquidations by other large holders.
Nonetheless, these transfers also lend support to the thesis that bitcoin might continue to consolidate in the short term as performance seasonality becomes less supportive during the summer months and the fact that overall on-chain demand growth has been slowing down as highlighted in our most recent monthly report.
On the bright side, bitcoin demand from institutions continues to be solid: Global bitcoin ETPs have continued to record decent net inflows of +$750 million albeit less than the week prior.
Meanwhile, public corporations continued to accumulate bitcoins: Most prominently, Michael Saylor has once again indicated on Twitter/X that Strategy (MSTR US) has most likely increased its bitcoin holdings and Metaplanet Japan (3350 JP) has also increased its holdings by another 2,205 BTC last week. What is more is that Elon Musk's new ‘America Party' will likely embrace bitcoin as well which has also been confirmed by Elon Musk directly.
The Bitwise Bitcoin Standard Corporations ETF (OWNB US) has also reached the highest close since inception which implies that the biggest bitcoin corporations have collectively reached a new-all time high. This implies that bitcoin could possibly hit new all-time highs this week as well.
All in all, while overall on-chain demand is slowing, the continued structural bid by institutions is keeping bitcoin afloat.
On the macro front, US non-farm payrolls growth in June significantly surprised to the upside which led to a renewed repricing of Fed rate cut expectations. Fed Funds Futures markets are now back to expecting a total of 2 rate cuts until December 2025, back from 3 rate cuts expected before the data release.
More specifically, US non-farm payrolls grew by +147k while the U3 unemployment rate declined from 4.3% to 4.1% signalling that the US labour market was still robust in June. However, many question marks remained about the reliability of those numbers as the ADP payrolls numbers had previously indicated a decline of -33k jobs in June creating the highest discrepancy in reported numbers between the BLS data and the ADP report in 3 years.
A large part of the recent increase in the BLS payroll numbers is also due to an increase in Government and Education & Health sectors. In contrast, the ADP report has indicated a decline in services employment, especially in the Education & Heath sector. It is also worth pointing out that the government did not create jobs in June on a non-seasonally adjusted basis. In fact, government payrolls declined by -314k jobs in June when not factoring in seasonal adjustments.
Meanwhile, the decline in the headline unemployment rate appears to be related to the fact that the US labour force declined in June, led by a very significant decline in the foreign-born work force. The decline in the overall unemployment rate is also hard to reconcile with the fact that continuing unemployment claims continued to grind higher in June to the highest level since December 2021.
What is more is that BLS non-farm payrolls growth data are historically subject to very significant downside revisions. On average, they tend to overstate the true amount of jobs growth by around 20%.
All in all, these different observations imply that the labour market still appears to be much more fragile than is suggested by the headline figures which still implies a higher probability of Fed rate cuts than is currently expected by financial markets and, in turn, potential positive tailwinds for bitcoin over the coming months.
In general, among the top 10 crypto assets TRON, XRP, and Ethereum were the relative outperformers.
Overall altcoin outperformance vis-à-vis bitcoin increased last week, with 60% of our tracked altcoins managing to outperform bitcoin on a weekly basis. Furthermore, Ethereum managed to outperform bitcoin last week.
Sentiment
Our in-house “Cryptoasset Sentiment Index” shows a balance between improving and reflects mixed signals across key performance indicators, resulting in a neutral to slightly bullish outlook.
At time of writing, 7 out of 15 indicators are above their short-term trend.
BTC Exchange Inflows and Cross Asset Risk Appetite showed positive movement.
The Crypto Fear & Greed Index currently signals a “Greed” level of sentiment as of this morning, increasing from last week.
Performance dispersion among cryptoassets remained stable last week, signalling that altcoins have continued to be highly correlated with the performance of bitcoin.
Altcoin outperformance vis-à-vis Bitcoin has increased from last week, with around 60% of our tracked altcoins managing to outperform Bitcoin on a weekly basis. Furthermore, Ethereum managed to outperform Bitcoin last week.
In general, increasing (decreasing) altcoin outperformance tends to be a sign of increasing (decreasing) risk appetite within cryptoasset markets and the latest altcoin outperformance signals a bullish risk appetite at the moment.
Sentiment in traditional financial markets as measured by our in-house measure of Cross Asset Risk Appetite (CARA) has also increased, moving from 0.54 to 0.57.
Fund Flows
Weekly fund flows into global crypto ETPs continued to be positive as cross-asset risk appetite remained relatively bullish.
Global crypto ETPs saw around + 828.8 mn USD in weekly net inflows across all types of cryptoassets, after +2,646.6 mn USD in net inflows the previous week.
Global Bitcoin ETPs have experienced net inflows totalling +750.5 mn USD last week, of which +769.6 mn USD in net inflows were related to US spot Bitcoin ETFs.
The Bitwise Bitcoin ETF (BITB) in the US experienced net inflows, totalling +57.5 mn USD last week.
In Europe, the Bitwise Physical Bitcoin ETP (BTCE) experienced minor net inflows equivalent to +4.5 mn USD, while the Bitwise Core Bitcoin ETP (BTC1) experienced minor net inflows of +2.5 mn USD.
The Grayscale Bitcoin Trust (GBTC) has posted net outflows of -85.0 mn USD. The iShares Bitcoin Trust (IBIT), experienced strong net inflows of around +336.9 mn USD last week.
Meanwhile, flows into global Ethereum ETPs also continued its positive trend last week, with around +208.7 mn USD in net inflows last week.
US Ethereum spot ETFs, also recorded net inflows of around +219.2 mn USD on aggregate. The Grayscale Ethereum Trust (ETHE), has posted net inflows of +4.6 mn USD.
The Bitwise Ethereum ETF (ETHW) in the US has posted also net inflows of +8.3 mn USD.
In Europe, the Bitwise Physical Ethereum ETP (ZETH) saw minor net inflows of +0.7 mn USD while the Bitwise Ethereum Staking ETP (ET32) saw minor net inflows of +0.5 mn USD.
Altcoin ETPs ex Ethereum saw +44.7 mn USD in global net inflows.
However, thematic & basket crypto ETPs continued to experience net outflows of around -175.1 mn USD on aggregate last week. The Bitwise MSCI Digital Assets Select 20 ETP (DA20) had sticky AuM (+/- 0 mn USD).
Global crypto hedge funds exposure to Bitcoin has remained stable week-over-week. The 20-days rolling beta of global crypto hedge funds' performance to Bitcoin increased slightly to around 0.68 per yesterday's close, up from 0.67 from the week before.
On-Chain Data
Last week, Bitcoin's on-chain activity remained relatively stagnant.
Bitcoin spot exchanges continued to net selling pressure at to approximately -$0.8 bn compared to -$0.5 bn a week ago.
Meanwhile, bitcoin whales have continued to send bitcoins off exchanges on a net basis, indicating an increase in whale buying interest. More specifically, BTC whales removed -9,149 BTC from exchanges last week. Network entities that possess at least 1,000 Bitcoin are referred to as whales.
Furthermore, based on recent data from Glassnode, the overall downward trend in exchange-held Bitcoin reserves remains intact. The current level stands at 2.883 million BTC, representing approximately 14.49% of the total circulating supply.
It's worth noting that the 30-day measure of “apparent demand” for Bitcoin remains positive, with momentum increasing in recent days. We also saw the highest Net Realized Profit/Loss (the net profit or loss of all moved coins, defined as the difference between Realized Profit and Realized Loss) spike year-to-date on Friday 4th last week, with net realized profit reaching $9bn.
All in all, other metrics appear to be relatively muted with no clear momentum or decisive catalysts indicating a definitive signal.
Futures, Options & Perpetuals
Last week, BTC futures open interest increased last week by +7.1k BTC across all exchanges, and increased by +3.8k BTC on CME. Meanwhile, perpetual open interest increased by around +6.4k BTC.
BTC perpetual funding rates were positive most of the time last week indicating a bullish sentiment among traders in the perpetual futures market and a long bias.
In general, when the funding rate is positive (negative), long (short) positions periodically pay short (long) positions, which is indicative of bullish (bearish) sentiment.
The BTC 3-months annualised basis, while spiking to 7.4% on Thursday 3rd, ended the week at around 5.1% p.a. averaged across various futures exchanges last week.
BTC option open interest increased by around +23.4k BTC, with the put-call open interest ratio declined to 0.57.
The 1-month 25-delta skew for BTC also increased throughout the week from +1.7% to +2.1%. The presence of a positive skew indicates some preference for downside protection, with bearish positioning slightly less pronounced than in the week prior.
BTC option implied volatilities trended up last week, while the 1-month realized volatility remained stable at around 30.3% p.a.
At the time of writing, implied volatilities of 1-month ATM Bitcoin options are currently at around 36% p.a.
Bottom Line
- Last week, bitcoin and cryptoassets performed in line with other major asset classes as cross asset risk appetite remained relatively bullish.
- Our in-house “Cryptoasset Sentiment Index” has declined somewhat and now signals a neutral sentiment across cryptoasset markets.
- Chart of the Week: 80,000 BTC moved from previously unidentified wallets to new wallets in what appears to be a batch of transactions by early adopter and Bitcoin Cash (BCH) founder Roger Ver. These bitcoins represented old coins that had been dormant for 14 years – this has led to the second highest reading in Coin Days Destroyed (CDD) ever recorded. The metric Coin Days Destroyed combines the number of bitcoins that are being transferred with the number of days they have been dormant and gives an indication of the number of old coins being on the move.
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