Bostoncoin update  1 Nov 2024

Is it still Halloween?

November 1, 2024. An orange pumpkin-faced man is desperately hanging around the White House. Ordinary citizens are terrified of zombie corporations. A guy called Freddy Krueger says the stock market and crypto markets will blow up next month, but in a good way. Microsoft is considering buying crypto. Is this a sweet dream or a beautiful nightmare?

Will Microsoft excel at Bitcoin holding?

In December 2024, Microsoft (Nasdaq: MSFT) investors will vote on whether the company should diversify its interests by holding some Bitcoin rather than cash.

The investors in MSFT include Blackrock, with around 7.5% share. Blackrock launched a Bitcoin ETF in January 2024, and it now holds over 400 000 BTC on behalf of its investors, worth over $20 billion, so we can assume that Blackrock will vote in favour of MSFT adopting BTC.

But wait: a slightly larger share of MSFT stock is held by rival find manager Vanguard, who famously did not launch a Bitcoin fund. With 9% of the stock and 9% of the vote, could Vanguard sway things away from crypto?

If Microsoft starts to buy Bitcoin as a reserve or hedge against cash printing and market fluctuations, it will join several other organisations that park their cash in Bitcoin, such as Michael Saylor’s company MicroStrategy (Nasdaq: MSTR).

Prior to buying Bitcoin, MicroStrategy stock had been ranging between $13 and $30 for several years. After MSTR decided to exit cash and buy BTC in 2021, the stock price has been between $60 and $150, with peaks over $200. It seems that MSTR made a very smart move.

El Salvador became the first country to adopt Bitcoin as a legal currency, and other countries are expected to follow suit. MicroStrategy was the first company to turn their cash to BTC, followed by Tesla, Marathon, Coinbase, and Block (Square); could Microsoft be next? Will MSFT stock rise on the news? Stay tuned for more updates.

Bitcoin Performance and Market Sentiment

Bitcoin (BTC) began October at approximately $65,634 and concluded the month at $72,335, for an 11% increase in 30 days. This uptick, often referred to as “Uptober,” was driven by heightened institutional interest and positive market sentiment. The Crypto Fear & Greed Index, which gauges market emotions, reached 77 on October 31, indicating “Extreme Greed.”

Institutional Inflows and ETF Developments

This month, a notable surge in institutional investment was observed, particularly in Bitcoin exchange-traded funds (ETFs). BlackRock’s spot Bitcoin ETF recorded $875 million in inflows on October 30, marking its highest single-day inflow since its January launch. Some analysts are predicting that daily Bitcoin inflows could reach $1 billion, per day, on an ongoing basis. That much demand could drive prices to significant new highs.

Market Maturation and Layer-2 Solutions

The cryptocurrency market has demonstrated significant maturation in the last quarter of 2024, with billions flowing into spot crypto ETFs and a spike in transaction volumes on blockchain networks, especially layer-2 solutions. Ethereum’s ecosystem saw a sharp rise in daily active addresses and a five-fold increase in transactions compared to early 2023, driven by the proliferation of layer-2 scaling networks. The ETH price has not been as active as Bitcoin, but with fundamentals driving adoption, the price could surge soon.

Regulatory Landscape and Political Influences

The upcoming U.S. presidential election on November 5 has influenced market dynamics, with both major candidates expressing support for digital assets. Former President Donald Trump launched a cryptocurrency, WLFI, aiming to make the U.S. the “crypto capital of the planet” if re-elected.

However, the Trump project faced challenges, including limited sales and restrictions on token liquidity. One source says the Trump token is “hard to buy and impossible to sell.”

Those who say that Trump is “crypto-friendly” have focused on DJT’s creation and sale of several crypto and NFT projects, but there is an argument that a truly crypto-friendly candidate would buy crypto, not sell it.

Market Corrections and Investor Caution

Despite the overall positive trend, the market experienced corrections. On October 31, Bitcoin’s price retraced to $72,300 after nearing its all-time high of $73,800. Analysts noted that over 99% of Bitcoin’s supply was in profit, raising concerns about potential profit-taking and subsequent price corrections.

As prices climb higher and new institutional investors come to crypto, we expect some profit-taking and ‘sawtooth’ patterns emerging, similar to boom years in the stock market, with long rises and occasional sharp falls.

In January 2024, we warned investors that with institutional buyers comes institutional behaviour. Be alert: Wall Street often does not play fair. They can manipulate prices and even media, to make you think you should sell, when you really should be buying. Don’t trust the billionaires; trust your heart.

Market Outlook and Future Considerations

Analysts anticipate potential impacts on regulatory clarity and market dynamics as the market approaches the U.S. presidential election. Both major candidates’ support for digital assets suggests a continued focus on cryptocurrency in the political arena. However, concerns about market overheating and the need for cautious investment strategies remained paramount.

Thus far, we have witnessed significant growth, increased institutional participation, and evolving regulatory landscapes in the cryptocurrency market. While optimism prevails, market participants remain vigilant about potential corrections and the broader implications of political developments. Whoever gets the White House does not matter so much as which institutions control the cash, and which regulators wrap the red tape around the crypto industry. It promises to be an interesting next four years.

Bitcoin is still currently outperforming the diversified Bostoncoin portfolio (for the first time in 8+ years). This is primarily because major institutions such as Blackrock and Grayscale have been buying only Bitcoin, not the altcoins. We anticipate that the push to altcoins will come in early 2025, and hope to outperform again.

Notable performances in the Bostoncoin portfolio this month include

Solana        up 516%

Arweave     up 290%

SUI             up 459%

Oct 31 2024

BOS NAV AUD 69.760710998

BOS Price AUD 76.7367820978

BOS Price USD 50.504174

Bostoncoin Diversified Crypto Fund

1-year return         12.92%

3-year return         -31.46%

5-year return         273.68%

The DART portfolio continues to outperform Bitcoin, albeit with much more volatility and higher risk. Remember not to put all your eggs into one basket, even if it is a diversified basket. There is still a place for the lower-risk Bostoncoin fund, and there is a place for a new fund that will launch very soon…

Notable performances this month for DART include:

Pendle        up 559%

Bittensor    up 626%

Oct 31 2024

DART NAV AUD 187.7149926087

DART Price AUD 206.4864918696

DART Price USD 135.87763

DARTcoin diversified crypto fund

1 year return         188%

2-year return         170%

3-year return         195%

BONE-US (dog joke)

If you have read this far, congratulations. You have beaten 66% of your peers. Stay tuned for more information on our new POLLY AI fund. POLLY will involve a combination of human professional traders and AI robot trades. We have been testing the technology and methods for over six months now and have conducted computer back-testing for four years. Things look good. If you want more information or to invest in the new POLLY AI fund, please contact the office via phone or email.

stay safe, stay diversified. See you next month

JB