Standard Chartered identifies 3 key indicators of Bitcoin cycle bottom, Strategy announcement among them
Geoff Kendrick from Standard Chartered declares the crypto winter has ended, informing clients that digital asset prices have probably reached their cycle bottom, in anticipation of Strategy's Bitcoin acquisition announcement.
In a Friday communication to clients, Geoff Kendrick, an analyst at Standard Chartered, expressed his conviction that digital asset valuations have reached their cyclical bottom, and he is monitoring three specific metrics for validation: an expected announcement from Strategy regarding additional Bitcoin acquisitions from the previous week; whether cryptocurrency exchange-traded funds (ETF) registered net positive capital flows on Friday; and whether crude oil valuations continue their downward trajectory.
"We have now seen the low in crypto asset prices for the cycle. That would be USD59k for BTC (53% down from USD126k high)," Kendrick said in a brief note to clients on Friday. Based on CoinMarketCap information, the leading cryptocurrency by market capitalization was changing hands at approximately $63,704 as of Sunday.
The initial indicator on Kendrick's watchlist may have already materialized, contingent on how market participants interpret a social media post from Strategy's chief executive Michael Saylor that appeared earlier on Sunday.
"Still adding dots," was Saylor's message that accompanied the now-familiar dot, or bubble, chart that the Strategy executive frequently includes in his social media posts teasing forthcoming BTC purchases.
Regarding the additional signals of a Bitcoin cyclical bottom referenced by the global head of digital assets research at StanChart, exchange-traded funds focused on Bitcoin recorded aggregate net inflows totaling $85.84 million during Friday's trading session, with capital flowing into five of these investment vehicles while eight of the United States-listed BTC ETFs experienced zero net movement, based on information compiled by SoSoValue.com. Meanwhile, crude oil futures contracts declined on Friday, marking the second consecutive session of losses, as reported by Yahoo Finance data.
Kendrick closed his note with: "Winter is over. Welcome back to crypto Spring."
Surprise Bitcoin sale defended as "necessary" defense of digital credit
In a regulatory filing submitted to the US Securities and Exchange Commission on June 1, Strategy revealed its first documented Bitcoin divestment since 2022, liquidating 32 BTC in a transaction that seemed contradictory to Saylor's persistent "never sell your Bitcoin" philosophy. Saylor subsequently justified the transaction, explaining that maintaining the capability to divest the asset is essential for the ongoing issuance of "digital credit."
"If the company's policy is that we won't sell the Bitcoin, then the credit won't have value and the equity won't have value," he told Cointelegraph at the BTC Prague conference.
According to Saylor, companies operating Bitcoin treasury strategies need to preserve the capability to liquidate their positions under certain circumstances to maintain support for securities that distribute dividends and additional credit instruments backed by BTC.