What happens if the Bitcoin ETF's are approved this week?

Sunday is upon us.

Welcome to another exciting edition of The Merge & happiest of new year to you and yours.

It's that time of the week when we bring you the latest insights and the tools to equip you for the crypto world.

This Week’s Roundup:

• Is the Bitcoin ETF approval coming this week?

• Two sectors to keep an eye on in 2024

• Which big asset firm are rebalancing their portfolio?

Let’s get to it, time is money and all that.

Read Time: 5 Minutes

Latest Developments

What happens if the Bitcoin ETFs are approved?

Background:

The U.S. Securities and Exchange Commission (SEC) has been under intense scrutiny regarding the approval of spot Bitcoin exchange-traded funds (ETFs). A last-minute application has injected fresh optimism into the crypto community, as the industry eagerly awaits a regulated investment vehicle for Bitcoin.

When It's Happening: 

21shares was the first of the big players to apply for an ETF last year, and their spot ETF deadline is this Wednesday 10th January.

It’s expected that it would be a sweeping approval for all applications if the SEC choose to do so, similar to synonymous approval of the Ethereum futures decision the year before last.

Why It's Important to Investors: 

A green light for spot Bitcoin ETFs in the U.S. would signal a significant shift in regulatory sentiment towards digital assets. Investors, especially institutional ones, have been eagerly anticipating a regulated ETF as it provides a more straightforward and secure way to gain exposure to Bitcoin. This approval could lead to an influx of institutional funds, potentially driving up Bitcoin's value and further establishing it as a mainstream asset class.

Two sectors to keep an eye on for 2024

Background:

Two sectors within crypto are looking like they could have huge potential to be a dynamic duo heading into 2024.

DePin also (Decentralised Physical Infrastructure Networks) and AI are both looking to play essential parts as key players in decentralised finance (DeFi), especially on networks like Solana - which is the blockchain of focus for many this bull run.

What can allow some of these tokens to run up exponential gains is the hype associated with narratives, and what can be grasped relatively easily by the retail participants that come in much later in the cycle.

With a huge focus on AI since the explosion of ChatGPT in 2022, blockchain seems to be a great place to incorporate this technological innovation to improve elements of scalability, security and efficiency for crypto with many tokens like RNDR, FET and TAO in the limelight currently.

Similarly, DePIN which hasn’t seen a huge run-up similar to the likes of some AI-related tokens, is also a sector which has huge room for growth as there is becoming more of a need for decentralised storage of data and computational processing power for network operations with the likes of SHDW on Solana and Filecoin on Ethereum.

Why It's Important to Investors: 

DeFi is a rapidly evolving space, and the combination of two hot narratives like DePin & AI can be a catalyst for investors in making informed decisions about where to place their bets.

Understanding potential trends in advance allows investors to position themselves strategically within the dynamic DeFi market. Staying ahead of such developments is crucial for those seeking long-term success in the decentralised finance space.

Which big asset firm are rebalancing their portfolio?

Background:

Grayscale Investments, known for its cryptocurrency investment trusts, has made strategic adjustments to its portfolio. Notably, MATIC has been dropped, while funds for AVAX (Avalanche) and XRP have been added in a recent rebalance.

When It's Happening: 

The rebalance has been recently implemented, reflecting Grayscale's response to evolving market dynamics and their outlook for where the market will head in 2024

Why It's Important to Investors: 

Grayscale's decisions often reflect broader trends in institutional sentiment. The addition of AVAX and XRP suggests growing interest in these assets among institutional investors. Conversely, the removal of Matic indicates a shift away from certain projects. Investors should monitor such portfolio changes, as they can influence market sentiment and potentially guide their investment strategies.

Latest Tools to Use

📈 TradingView: The go-to platform for advanced chart analysis and market insights (link)

🦙 DefiLlama: Analytics dashboard which shows the Total Value Locked (TVL) across all of the major DeFI protocols (link)

🦎 CoinGecko: Keep up to date with prices, trading volumes, and crucial crypto data (link)

💰 Staking Calculator: Calculate current rewards and future run scenarios to estimate future returns of different tokens (link)

🪙 Token Terminal: A platform that aggregates financial and alternative data on blockchains and decentralised applications that run on blockchains (link)

🧾 CryptoTaxCalculator: Simplify tax reporting and stay compliant with this useful tool (link)

Keep your finger on the pulse of these developments and explore the latest tools to make your crypto journey more productive.

Key Indicators

MVRV

The MVRV Z-Score uses blockchain analysis to identify periods where bitcoin is significantly over or undervalued relative to its ‘fair value’.

It can be a good sign to an investor/trader of when to buy or sell. You can read more in detail about how it can be used here.

Current MVRV Score: 1.42

Fear and Greed

Investors need to be cautious of their nature as their emotions could cloud their rational decision-making and judgement.

This Index is a collection of sources to track the general sentiment of the crypto market.

Current Fear & Greed Index: 71

Extreme fear can be a sign that investors are too worried. That could be a buying opportunity.

When Investors are getting too greedy, that means the market is due for a correction.

Free Alpha

That’s all from us this week, before we let you go here are some of our favourite Twitter pages for great content and deep dives on specific Crypto projects.

Shout us out if you find them valuable (we’re sure you will):

Just remember if you’re reading this, we’re so early in this journey of technology.

Zoom out, stick to your intuition and have patience - all great things come with time.

Wrapping Up

As always, we'll be back next week with more insights and updates from the crypto universe.

If you have any questions or topics you'd like us to cover in future newsletters, feel free to reach out.

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Disclaimer: This newsletter is for informational purposes only and should not be considered financial advice. Please conduct your own research before making any investment decisions.