Grayscale sees positive catalysts on the horizon for bitcoin

Bitcoin has rebounded 130% so far this year

article-image

Grayscale CEO Michael Sonnenshein | Artwork by Crystal Le

share

A light at the end of the tunnel?

Grayscale said Friday that there’s a number of positive catalysts for bitcoin on the horizon from potential spot bitcoin ETF approvals, the halving and even the upcoming presidential election.

In a note summarizing November’s price action, the research team said that it wasn’t just bitcoin that saw a positive November. The team stated that “crypto recovery broadened to a wider array of market segments.”

So far, bitcoin has rebounded a whopping 130% in 2023 after a rough 2022.

“Grayscale Research sees gradually improving crypto fundamentals and a relatively tight supply picture in major tokens (due to Bitcoin’s current ownership structure, for example). This may be consistent with rising crypto valuations in the year ahead, especially if the Federal Reserve has finished tightening and the US economy can avoid [a recession.]”

Read more: Bitcoin price went up in November — will it go up in December?

The macro environment has been focused on whether or not the Federal Reserve and Chair Jerome Powell will be able ensure a soft landing for the US economy, which would ultimately avoid a recession. A hard landing, on the other hand, would most likely force the US into a recession. 

Researchers are concerned about the negative impact that a hard landing could have on crypto recovery. 

“That being said, the central scenario for financial markets and the economy are likely to be positive for Bitcoin and other crypto assets, in our view. Bitcoin’s supply is relatively ‘tight’ ahead of potential investor inflows into spot ETF products in the US. For example, according to Glassnode data, the share of Bitcoin’s supply held by short-term speculators reached a record low,” the note said.

Additionally, the presidential election next year is “expected” to bring some attention to “excessive government borrowing,” and other issues — such as the Fed’s independence — which would impact the US dollar. 

If this plays out, then Grayscale “expects that this combination would be positive for demand for physical and digital gold, and may be consistent with rising Bitcoin valuations.”

Read more: Bitcoin flirts with breakout, price mirrors lead-up to 2012 halving

TheBlock’s research director Lars Hoffmann found that adjusted on-chain volume increased by nearly 30%, with ethereum increasing 43% and bitcoin up 21%. 

Bitcoin’s hash rate hit an all-time high in November, which Grayscale believes is due to miners upgrading ahead of the 2024 halving. Open interest for bitcoin futures listed by CME also hit a high, “possibly pointing to rising institutional activity in the market.”

Grayscale estimates that global crypto ETP net inflows hit $2.2 billion for the year, with November inflows totalling $1.3 billion.

Stablecoins are also getting a boost from a more positive outlook. 

“​​Over the last month, aggregate stablecoin market capitalization increased by $4bn and the amount of gas used on stablecoin transactions moved higher,” Grayscale wrote. 

Hoffmann, in a post on X, said the issued supply of stablecoins increased by 3.7%. USDT and USDC were the frontrunners, with nearly 75% and nearly 19% of market share respectively. 

JPMorgan, in a note on Thursday, found that the spot bitcoin ETF hype has led to “tentative signs of revival” in both the DeFi and NFT spaces, with NFT volumes spiking and a “gentle” recovery in DeFi activity. 

JPM credits the resurgence in DeFi, in part, to liquid staking initiatives spearheaded by Lido; a trend that started prior to the widespread attention on spot bitcoin ETFs.


Get the news in your inbox. Explore Blockworks newsletters:

  • Blockworks Daily: The newsletter that helps thousands of investors understand crypto and the markets, by Byron Gilliam.
  • Empire: Start your morning with the top news and analysis to inform your day in crypto.
  • Forward Guidance: Reporting and analysis on the growing intersection of crypto and macroeconomics, policy and finance.
  • 0xResearch: Alpha directly in your inbox. Market highlights, data, degen trade ideas, governance updates, token performance and more.
  • Lightspeed: Built for Solana investors, developers and community members. The latest from one of crypto’s hottest networks.
  • The Drop: For crypto collectors and traders, covering apps, games, memes and more.
Tags

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 18 - 20, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Unlocked by Template (4).png

Research

Wormhole Settlement allows for a highly scalable liquidity venue to fill user intents into a multichain, multi-VM future. By concentrating solvers’ balance sheets on Solana, transaction costs associated with solvers rebalancing inventory across destinations are eliminated. With the ability to settle bridging, swapping, and arbitrary interactions, without the costs and frictions of fragmenting solver liquidity, Wormhole Settlement has the opportunity to settle a large share of volumes in the crosschain interoperability market with a beneficial framework for both users and solvers. 

article-image

Layer-2 Movement finally launched its mainnet yesterday

article-image

A new report from Dragonfly suggests that US users were geoblocked from billions in potential revenue

article-image

“Micro-advancements” take center stage in plans by Anza

article-image

The vote is in addition to the spending stopgap bill, proposed by House Republicans over the weekend

article-image

Strobe will finish deploying its initial $150M by end of year while raising a second fund

article-image

The hearing comes as the industry continues to quarrel over what stablecoin regulation should look like in the US