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Markets Outlook
Crypto Update | Bitcoin to Reach $100K by December or January: 10x Research Founder
00:16:22
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- [00:00]
Jen Senasi
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- [00:54]
Markus Thielen
Well, we think we're going to get to see 100 either by December or by January. I think the squeeze is coming. I think the momentum is there. We expect Gary Gensler to resign sometime between December to January. I mean, this has, you know, happened with the last two SEC chairmen. You know, when a new president came in, there will be no different. And I think the market get more, more upbeat and more optimistic about it.
- [01:23]
Jen Senasi
It's Wednesday, November 6th and this is Markets Daily hosted by me, Jen Senasi. On this show we navigate the current shaping the crypto markets, providing insights against the broader financial landscape. So whether you're actively trading or simply fascinated by the volatility of crypto markets, this show is your compass to understanding what's happened, where we are and where we're going. Good day everyone. This morning we learned that Donald Trump will be the next President of the United States. What does this mean for crypto markets? Joining the show today is founder of 10X Research, Markus Thielen. Marcus, welcome back.
- [01:57]
Markus Thielen
Good morning. Thanks for having me, Markus.
- [01:59]
Jen Senasi
You know I love having you because you make very bold predictions based on real data and those predictions more often than not come true. Last time you were on the show you said that we can expect Bitcoin to hit a new all time high in the short term future. That has happened. Talk to me about what you're seeing this morning.
- [02:22]
Markus Thielen
You know, we're seeing actually a lot of questions is, you know, are we going to fade this rally because everybody wants to buy lower. Everybody is still bullish, but of course not everybody is fully allocated. And I think that's really the problem that, you know, there was some uncertainty over the last couple of days. You know, there was a little bit of over positioning where futures open interest, you know, rose very sharply. Then of course there was a hiccup in sort of like these pulling market, you know, election polls where people got a little bit spooked with. And I think now we're coming into like a period where everybody wants to be long. Everybody is long, but everybody is not maximum long. And I can see actually a scenario where everybody has to put on just really more risk because it's really painful if you miss out on this rally.
- [03:04]
Jen Senasi
Tell me a little bit more about that. I mean, given what you've just said, what do you think is going to happen as we head into November and December?
- [03:12]
Markus Thielen
So historically, and when you look back the last 10 years, actually the best period to invest in bitcoin is not necessarily based on the four year cycle. It's actually between the October to March period during this six month period and basically during the summer period, which is very similar to the equity market. You also sort of like want to be out of the market between April to September because not, not much happens really during, during the summer and late spring. And I think we're seeing something like very similarly. And when we ran the numbers, actually the best period just to be long, close your eyes, is really October 1st to sort of like March 31st. And when you look back, what happened sort of like a year ago? Well, a year ago the rally really started in sort of like late September. And the rally sort of like lasted until March this year. And you know, it worked perfectly. And you know, as you know, that's when we also turned a little bit more cautious with some downside risk. And I think that scenario is very similar to the equity market. But of course, you know, the interesting aspect is that also volatility has been massively priced higher over the last couple of days. And I think we saw this how short term volume really went from something like 50% to 80% implied volume. And this is apparently because a lot of people, a lot of traders shorted short term calls to buy longer term dated calls. And you know, they kind of got squeezed out of the market because we had this massive inflow the week before into the ETF market. So it's kind of like, you know, kind of like a little kind of crazy scenario where people kind of got squeezed out of a bullish scenario and sort of have to step back in now at higher prices.
- [04:52]
Jen Senasi
You know, you're referencing quite A bit of quantitative data folks have come on the show in the weeks leading up to the election. Obviously we're looking at the election as a catalyst here. I mean, from your perspective, were we going to see all time highs regardless of the election outcome?
- [05:10]
Markus Thielen
I do think so. And there's really one reason and I think that's extremely important to understand that, you know, bitcoin is actually, you know, doing pretty well under the Democratic leadership over the last, you know, two years. Bitcoin is up something like 200%. But also everything that could have been approved for bitcoin sort of like has been approved from a regulatory perspective. You know, we have already the futures, the CME futures listed since 2017. We now have the ETF since this year based on spot. And we're going to get probably in Q1 the options on the ETFs. And I think that's very crucial. The, you know, we have already gotten pretty much the green light from everyone. So. And the SEC has already said that bitcoin is a commodity. So there was no way to really, you know, kind of derail this. Whoever is going to be president, whoever is going to be SEC chair. And of course the key important component is also of this bull market to understand what is the narrative, who is the key promoter. And I think this cycle is definitely going to be blackrock's Larry Fink, that bitcoin is digital gold. And that narrative would have not gone away either under a Democratic president or under Republican president.
- [06:23]
Jen Senasi
Let's talk a little bit more about the bitcoin narrative. You mentioned Larry Fink there. The incoming President Donald Trump has talked about bitcoin as a strategic reserve, a possible strategic reserve for the United States. How does that play into how you're looking at the asset?
- [06:41]
Markus Thielen
So of course, you know, Trump has promised at the bitcoin conference in Nashville, you know, he hold, he held a couple of, you know, fundraising events there, you know, highly priced, of course. And he promised the bitcoin community really that the bitcoins that the US Currently holds are not going to be sold and they're going to be part of the strategic reserve. The question is really now if he's really going to do this. And plus if the US Is going to buy an additional btc, I mean, I personally doubt they're going to buy additional btc. They're just going to put whatever they have confiscated into maybe like a, you know, special area, you know, side pocket basically. But nevertheless, I think it sort of like sets maybe the environment that we're going to see more pension fund announcing the allocations into Bitcoin. You know, we're going to get the 13F filings within the next couple of days. Basically where it's going to be revealed who else from an institutional money manager has bought exposure. You know, we know already the Swiss national bank has exposure through MicroStrategy. We know the, the Norwegian sovereign wealth fund has exposure. And of course the question is really if the US is going to set up a new kind of framework for really pension funds to getting more kind of like irregulatory framework. But I think this is already in place so not much would have happened or would have changed. But again now the question really is if the US Government is officially going to make Bitcoin sort of like an asset on their balance sheet.
- [08:12]
Jen Senasi
Yeah, that is the question and it sounds like a more mature future for Bitcoin. It's been on that trajectory for a while now under current leadership here in the United States. If we brought in our perspective out now and look at other assets like ETH and other altcoins in the crypto ecosystem, how are you looking at those as we head into the end of the year and a new presidency in January?
- [08:38]
Markus Thielen
Yeah, of course there are really two major developments basically this year. Right. And this is really of course number one that the ETFs have launched. But number two is actually that the bitcoin dominance ratio has risen from just 50% to 60%. And it really seems that Bitcoin is sucking up more and more liquidity from the overall market. So if bitcoin or crypto is like a 2 trillion asset class, of course now it's a bit higher and you know, increases its sort of market share by you know, 100, 100 billion or 200 billion. It really means it's really sucking up this liquidity from other areas of the market. And I think we're seeing this more and more that people are selling their other altcoins and just buying in btc because this is sort of like the clearest asset where a we have strategic buying from long term investors and we see this mostly through of course the ETFs. But we also seeing this for example, that the CME bitcoin futures has really increased the most exposure compared to any other exchange, really derivatives exchange, since really the 2021 top. So we have seen for example that CME outstanding or open interest really has increased from 4 billion to sort of like 14 billion. And you know, the other crypto exchanges have not actually have not increased their Open interest. So much so it really seems it's all really focused on btc and we don't think that's going to change. We think this is going to continue because a lot of the other coins or, you know, or tokens in depending on how we look at it, have really failed to come across or bring across a new narrative. You know, of course the, the, the Ethereum upgrade in March just came literally like at least six months too late. So they missed out on the whole, you know, meme coin, cheap issuance, you know, low gas fees, basically, you know, story. And I think they're becoming really obsolete. And I think the question really is, and we're getting this question almost every day, is it time to buy ETH because ease is cheap. I think there will be one moment and this is when Larry Fink says, today our salespeople are going to market the Ethereum etf and now it's time to buy. And that is really, then probably like an opportunity to buy it, but not before. And because, I mean, you know, when was the last time you have used Ethan, you know, as a, as a gas or as an, you know, oil for the crypto market? Right? I mean, this is what the story of 2021 where we needed to, you know, to, to buy Ease to use in defi. We needed to buy Ease to, to mint NFTs. But this cycle we don't really need it. And the, the real story is really all about btc and I think that's going to continue. And that's why, yes, Meme coins can do well, some newer projects can do well, but the bigger story is really it's all about bgc and we don't think that it's going to stop.
- [11:34]
Jen Senasi
It's interesting that you bring that up. Less folks interested in ETH lately given Bitcoin's trajectory. What do you see Eth's trajectory looking like as we head into 2025? You just said that we might see a buy moment soon. What does the trajectory look like for folks who are going to buy?
- [11:56]
Markus Thielen
I think it really comes down to when BlackRock, you know, salespeople going to make the switch and said, okay, we pushed BTC ETF last year, now we need a new story. You know, Larry Fink has been very vocal that he also wants that investors have Ease in their portfolio. So this is going to happen. At one point the question is really, you know, do you buy the bottom here or do you wait for it? Do you take it as a higher beta asset? But it's not where we're seeing strategic buying. We don't see the ETFs really allocating it, we don't see any other flows. And I think that's really a big change in the narrative and that's why we're still being relatively cautious about it.
- [12:37]
Jen Senasi
The last time we spoke we were talking about Bitcoin ETFs. You said that a lot of the buying was coming during Asia hours and the ETF narrative may, may not have been as prominent as it was at the time. Lots has changed since then. But who are we seeing buying up Bitcoin as we hit new all time highs early this morning?
- [12:59]
Markus Thielen
Yeah, I think the interesting aspect is that you know, when we look for example, and this was an argument we made like earlier in the year that the Bitcoin ETF spot buying really was closely linked, you know, how high the funding rate was. So we clearly saw this arbitrage, you know, occurring there. And of course from the 10 billion inflows that we saw around, like Q1, for example, 2 billion was coming from Millennium and Millennium is a multi strategy hedge fund that is known for risk management. So they're not going to just yolo in into Bitcoin and they were buying basically 20% of all the outstanding ETFs. So this was when the funding rate was high. And I think that's why we have not seen much inflows during the summer because the funding rate stayed relatively low. And we linked it, you know, back then to for example retail volumes in Korea that were quite, quite low. So it indicated actually retail was not really participating. They kept the funding rate, you know, pretty tight basically. But what we're seeing actually in October is that yes, the funding rate has slightly improved but it's still relatively low. But nevertheless we starting to see these massive inflows. And when we calculated for example we should have seen something like maybe like one and a half billion US dollars of inflows in, in October based on the funding rate. But we saw more than 5 billion of inflows. So there is really real money coming into the market that is taking directionally bets. And I think that made us really bullish that we're going to get this breakout because there's also this scarcity factor occurring that basically the number of active wallets, bitcoin wallets has actually dramatically slowed down. So people buying bitcoin, putting it in their wallet and not doing anything with it anymore. And this is very different than you know, a few years ago where people were actually actively trading Bitcoin. But now it seems really people just hey, I'm not going to sell it, I'm going to keep it. And becoming really into this kind of like really this low liquidity environment where we're getting these strong inflows that are real inflows now. And at the same time people are not selling their bitcoin. So we might really getting this squeeze higher. And at the same time, you know, we just made, you know, earlier, earlier in October or in October you made this, that bitcoin made a new high for the first time in six months. And this is historically in a bull market, led to further, further upside pressure. And that's why we think we can rally here and making like a good, a decent move higher despite of course the election outcome that is every everybody perceives as bullish.
- [15:33]
Jen Senasi
I gotta correct myself. I said bitcoin hit an all time high early this morning. It was late last night. The hours just all meld together for me these days with all of this news hitting us regardless of the time of day. Markus, before I let you go, I gotta ask you, you know, I love a good prediction. We've been building up, I think to this moment, are we gonna see 100k Bitcoin before 2025?
- [15:56]
Markus Thielen
Well, we think we're gonna get to see 100 by either by December or by January. I think, you know, the squeeze is coming. I think the momentum is there. You know, we expect, you know, Gary Gensler to resign, you know, sometime between December to January. I mean this has, you know, happened with the 2sec, the last 2sec chairmen, you know, when a new president came in. I think there will be no different and I think the market get more upbeat and more optimistic about it. And so, you know, the stats indicating also we're going to get to 100,000 by either end of the year or early next year. So we are pretty bullish. And again that's what we're getting from feedback from people is like, you know, are we going to see a sell the news event so I can buy lower and then position for it. But I think, you know, the market might just ramp up and the market can go quite quickly here because now we having, you know, no resistance to the upside anymore.
- [16:47]
Jen Senasi
Markus, as always, it is a pleasure having this discussion with you. Thanks for joining the show.
- [16:53]
Markus Thielen
Thanks for having me.
- [16:54]
Jen Senasi
And to our listeners, thank you for watching. If you enjoy listening to markets daily, please subscribe to the Coindesk podcast network that is available on all podcast platforms. If you like watching us subscribe to our YouTube channel, give us a thumbs up. As always, it is an honor to go on this journey with you to better understand what's happening in the crypto markets. Have a great day and we will see you tomorrow.