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MicroStrategy founder Michael Saylor once again tweeted that MicroStrategy purchased over 3,000 bitcoins for approximately $155.4 million between February 15 and February 25, with an average price per bitcoin of around $51,813.
Meanwhile, Bitcoin broke through $53,000 USDT, $54,000 USDT, $55,000 USDT, and even exceeded $56,000 USDT, reaching a new high since December 2021. The market atmosphere seems to be gradually returning to a bull market.
Behind this, facing the end of a new halving cycle, what new catalytic factors are there for Bitcoin in 2024 in various dimensions such as the market, technology, etc.? Will they push Bitcoin to new heights?
New "Pixius" in the crypto world
As a veteran Bitcoin hodler, MicroStrategy's bold strategy of buying Bitcoin has been publicly known since August 11, 2020. To date, MicroStrategy has purchased around 193,000 bitcoins for about $60.9 billion, with an average price per bitcoin of $31,544.
Apart from being the custodian of the trading platform, among the corporate entities holding over 100,000 bitcoins, besides Block.one and the now-defunct Mt.Gox, MicroStrategy ranks third. In a way, MicroStrategy has become the new "Pixius" of the crypto world. Currently, MicroStrategy's 190,000 BTC ranks first among listed companies in BTC holdings, with a total value exceeding $10 billion.
Interestingly, MicroStrategy's total market value is currently $13.5 billion, so the fair value of its held BTC accounts for about 80% of its market value. This means that 80% of its net assets can be understood as the value of Bitcoin, making it a "quasi-Bitcoin ETF" for many investors.
Even half a month before the recent surge in stock prices, MicroStrategy's total market value was only $7 billion, and there was a phenomenon where the value of its held BTC was higher than its total market value, with a "price-to-book ratio" of less than 1 for "high-quality assets."
Of course, since the approval of the spot Bitcoin ETF on January 10, a rising and more vigorous "Pixius" of the crypto world has gradually emerged. In just one month, the BTC holdings of nine new spot Bitcoin ETFs (excluding GBTC) have flipped MicroStrategy.
Bitcoin Holdings Ranking
The total net asset value of Bitcoin spot ETFs is currently $37.67 billion, with an ETF net asset ratio (percentage of market value to total Bitcoin market value) of 3.76%. The historical cumulative net inflow has reached $5.63 billion.
Overall, in each round of the market, there is a new "Pixius" in the crypto world. Looking back, from 2020 to 2022, it was Grayscale's buying and Tether's issuance that served as the "bull market engine" for pulling in off-chain incremental funds. Since 2024, spot Bitcoin ETFs and MicroStrategy have successfully taken over the historical task of driving the market.
Bitcoin Layer 2 Surge Underway
Since the emergence of Ethereum and the public chain ecology, almost every industry frenzy in recent years, whether it is the ICO craze in 2017, the DeFi boom in 2020, or the subsequent NFT craze, has almost always been dominated by Ethereum. Even there was a trend of leaving Bitcoin alone to dance alone until the Ordinals craze since 2023, Bitcoin finally did not absent itself.
With the surge in the Bitcoin ecosystem in 2024, the development of Bitcoin Layer 2 has almost become a mainstream narrative. After all, BTC, as the highest-quality asset in the industry, born as a new asset form thanks to the draining of the engraved inscription, is bound to create new demand. Although direct realization of DeFi and other smart contract scenarios still has underlying flaws, projects like Stacks and RSK in the broad BTC Layer 2 are opportunities for breakthroughs, and coupling with Ethereum is also an option (similar to the bridging of renBTC and WBTC to the Ethereum ecosystem).
Therefore, many people predict that in the next bull market, among the top 100 projects by market capitalization, there should be at least 10-15 BTC Layer 2 related targets, and some may enter the top 10.
From this perspective, the currently trillion-dollar market value of Bitcoin has become the largest untapped "sleeping fund pool" in the crypto world, making the programmability of Bitcoin, especially the Layer 2 capable of carrying larger funds and richer use cases—such as creating swaps, borrowing, liquidity mining, and other applications—gradually becoming more accessible. Pantera partner Franklin Bi explicitly pointed out that if DeFi on Bitcoin reaches the same proportion as Ethereum, the total value of DeFi applications on Bitcoin is expected to reach $225 billion (25% of Bitcoin's market value). Over time, its scale may fluctuate between $72 billion and $450 billion (8% to 50% of Bitcoin's market value).
Potential Variables in Bitcoin's Technological Evolution
In 2012, colored coins, and in 2017, SegWit, both brought different extents of expansion and new possibilities to Bitcoin, gradually turning into a reality and promoting a wave of ecological prosperity.
However, since the Taproot upgrade in 2021 brought a completely new combination and possibilities for performance, privacy, and even smart contracts to Bitcoin, there have been few widely noticed waves of technological innovation in Bitcoin in recent years.
Until the Ordinals protocol in 2023 gave birth to a new wave of new asset issuance on Bitcoin, the market's attention to Bitcoin's scalability track has increased significantly, especially the discussion volume on Bitcoin's technological level has begun to increase again.
Since the beginning of 2024, if there is anything worth paying attention to on the technological level of Bitcoin, it is undoubtedly the development and innovation of RGB and the Lightning Network.
RGB, proposed in 2018, its officially usable version is expected to be launched in April this year. It is essentially a scalable and privacy-preserving smart contract system suitable for both Bitcoin and the Lightning Network. It aims to integrate the security of the Bitcoin network, the efficiency of the Lightning Network, and its scalability to the maximum.
In simple terms, it aims to carry forward the original intention of Bitcoin as an "electronic currency," allowing two people to conduct encrypted private transfers purely like paper currency transactions. Of course, its experience is general, and only two people with transaction intentions can transfer (to ensure anonymity)—that is, if you want to transfer to others, or even get the consent and confirmation of the other party, both parties must be online at the same time. Secondly, because the contract status cannot be globally visible, RGB cannot carry those use cases involving multiple people.
Not long ago, based on the original RGB protocol, Nervos launched the RGB++ solution, which attempts to delegate the asset status, contract issuance, and transaction verification of RGB to the CKB public chain. CKB serves as a third-party data storage and computing platform, eliminating the need for users to run the RGB client themselves.
Overall, the Lightning Network's ecosystem has gradually developed. OmniBOLT, Taproot, and RGB are all flourishing or about to land. There are many new variables worth paying attention to in terms of new asset issuance and expansion.
Most of them have been precipitated for a long time. Therefore, 2024 may be another "big year of technological evolution" for Bitcoin.
As of now, there is less than 2 months left until the fourth Bitcoin halving, expected to be on April 21, 2024, when the block reward will decrease from 6.25 BTC to 3.125 BTC.
From this perspective, with the continuous inflow of funds into ETFs, MicroStrategy's continuous buying, the continuous evolution of the RGB and other technical ecosystems, plus the halving event, for at least the next two months, Bitcoin may have multiple layers of "safety cushions" under multiple favorable conditions. Even if there is a possibility of a significant retracement before and after the halving, it can play a certain hedging role.
However, although the footsteps of this halving are getting closer, various dimensions of expansion of Bitcoin have obviously ushered in new variables, almost surpassing the attention to the halving. As for where these new variables will ultimately lead Bitcoin, it is worth looking forward to. |
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Post time 4-3-2024 20:43:36