Bitcoin has climbed up from every major resistance level in the past month. At the time of writing, BTC trades at $48,412 with a 3.8% profit.

After weeks in the green, the general sentiment in the crypto market has flipped decisively bullish as sellers seem exhausted and unable to continue their assault.

Director of Global Macroeconomics for investment firm Fidelity Jurrier Timmer believes Bitcoin could retake previous highs and go back to price discovery. In a thread published via Twitter, Timmer compared BTC’s price at different historical moments.

As seen below, Bitcoin’s current price action is “similar” to the distribution phase experience during February and April. At that moment, BTC’s price seemed stuck but finally moved to the upside. Timmer said:

With the latest rally, bitcoin’s market cap is closing in on the old highs. If we add in the rest of the crypto space, we have reclaimed a market cap of $2 trillion. This is no longer a sideshow, folks.

Many experts believe the macro-economic environment has favored Bitcoin, gold, and risk assets capable of generating yield for investors. In that sense, Timmer compared BTC’s performance with gold in 1970.

As seen below, the cryptocurrency and the precious metal behaved similarly. Although the expert clarified that this prediction is “highly subjective”, it could be an indication of future appreciation as BTC takes over gold’s market share. Timmer added:

In fact, bitcoin’s fundamentals (its network) are steadily improving. At the peak, there were 34.3 million addresses (with at least $1). That number fell to 31.8 million at the low and has now climbed back up to 33.5 million

Bitcoin Fundamentals Strengthen, On Route To $100K?

Timmer introduced a demand model, based on an S-Curve pattern, used to determine a technology’s adoption level, and a supply model, similar to Plan B’s Stock-to-Flow.

During the third market capitulation event in mid-July, this model intersected and created a “good base from which to consolidate”. The next these models will intersect, Bitcoin will stand at around $100,000, as the chart shows.

Bitcoin’s hash rate is climbing back from the abyss (following the mining ban in China), although it remains well below the peak. Higher prices will likely fix that as mining follows demand.

Another bullish point for BTC’s price in the long term, the expert argued, is the miner’s migration from China. The main driver of recent selling pressure, this event has made the cryptocurrency’s energy consumption much cleaner and could incentive new inventors to jump into the crypto market.

The capitulation events that pushed Bitcoin from an all-time high at $64,000, to its yearly lows at around $29,000, will have positive implications. The expert claimed that short-term investors have lost market share to long-term investors or hodlers.

The latter constituted around 12% of the market, data provided by Timmer claims. The expert said:

I’m impressed how resilient bitcoin and the crypto space in general have been during this 55% correction. The speculators (tourists) got crushed as they usually do during drawdowns, and now make up only 17% of the market. That level is consistent with past bottoms.

BlackRock ETFs have substantially entered bitcoin mining with a stake in Marathon Digital Holdings (MARA) and Riot Blockchain (RIOT), with a total value of nearly $384 million. 

According to reports from Forbes, it appears that BlackRock, the New York-based global investment giant, wants to invest in the world of bitcoin mining.

And in fact, the document filed last June 30 with the U.S. Securities and Exchange Commission (SEC) reveals that BlackRock ETFs hold a 6.71 percent stake in Marathon Digital Holdings (MARA) and a 6.61 percent stake in Riot Blockchain (RIOT). 

That represents an investment of $207 million on MARA shares and $176 million on RIOT shares.

Blackrock in the cryptocurrency world

Besides, it is not new that BlackRock is interested in the cryptocurrency world. Last April 2021, the multinational company’s purchase of 37 bitcoin futures contracts from the CME or Chicago Mercantile Exchange was made official through an SEC document.

Specifically, these were the CME Bitcoin FUT MAR21 XCME 20210326, which expired on March 26, 2021. From what had emerged, the investment amounted to $6.5 million, which is at an average price of about $35,000 per BTC, while the value at their expiration was about $9.8 million.

BlackRock ETFs and bitcoin mining

Among Blackrock’s hundreds of hedge funds and ETFs, its iShares Russell 2000 Index ETF and its iShares Expanded Tech-Software Sector own the shares of cryptocurrency-mining companies. Specifically, it is BlackRock’s iShares Russell 2000 ETF that holds more shares of MARA and RIOT than any other ETF. 

BlackRock’s new choice to participate in a bitcoin mining company is one of the latest significant trends for traditional financial institutions to want exposure in cryptocurrency by focusing on U.S.-based miners. 

Among the many reasons, surely there is the fact that revenues from bitcoin mining have grown significantly in the last three weeks. We are talking about profits more than doubled, going from $0.17 per day per THash/s on July 27 to over $0.4 in mid-August.

That happened undoubtedly due to the increase in the price of BTC and the related premium for miners if quantified in $, and also thanks to the adjustment of the algorithm to the difficulty of mining dropped to its lowest peak of the year.

An adjustment also sees the two companies chosen by BlackRock benefit enormously, especially considering the elimination of competitors on Chinese territory (due to the restrictive ban in China this year).

The support of big investors wants to reward cryptocurrency miners from other countries, just like BlackRock’s ETF that chose to invest in the shares of Marathon, based in Las Vegas, Nevada, and Riot based near Denver, Colorado.

The Bitcoin ETF issue in the U.S.

Staying in the U.S. territory, another issue is related to Bitcoin ETFs, i.e., those directly linked to the cryptocurrency asset.

In fact, the SEC continues to delay all applications for approval of bitcoin ETFs for at least two years.

Among the cases is Wisdom Tree’s application, which was originally filed with the SEC on March 26 but postponed several times, most recently last month.

The justification for the continued postponement is always to want additional comments, especially on ensuring that an ETF on bitcoin could not be susceptible to manipulation or how applicants can prevent fraudulent acts.

Despite this, applications continue to come across the SEC table, and for some cryptocurrency players, approval has become only a matter of time. Brian Armstrong, CEO of Coinbase, specifically stated that given the continued interest of institutional investors in bitcoin, the SEC could begin approving them as early as the end of this 2021. 

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