WINTERMUTE Market Update: December 2024
Highlights
- Over the holiday season last week, bitcoin saw large price swings, peaking at $99,887 on Thursday before closing down -1.6%
- 2024 was a milestone year for Bitcoin both off-chain and onchain, with the world’s largest cryptocurrency getting an ETF approved as well as successfully executing its fourth halving event
- Decentralized finance protocols also had a flourishing year with most onchain metrics reaching all-time highs in the face of continued innovative developments
Market Update
Last week, over the holiday season, a typically lower-volume week for the cryptocurrency markets, Bitcoin saw sharp price swings, surging up through Christmas Eve and Christmas before peaking at $99,887 on Thursday and ultimately closing the week down -1.6% at $93,563
With no expected market catalysts for the remainder of the year, along with the holiday season,, we continue to expect relatively low trading volumes in the market through the New Year’s. On the ETF front, Bitcoin ETFs saw $366 million in net outflow for the week. In contrast, Ethereum ETFs saw $349 million in net inflow, continuing a five-week streak of inflows.
On Monday, MicroStrategy acquired 5,262 more bitcoins, putting its total bitcoin holdings at 444,262, or roughly $42 billion. Perhaps attempting to mimic MicroStrategy’s success, more corporations are building up their bitcoin exposure, For example, bitcoin mining firms MARA Holdings and Riot Platforms both recently announced the completion of their convertible senior note offerings, selling $850 million and $594 million in notes, respectively, with an explicit mention of using the funds to acquire more bitcoin for their balance sheets.
While issuing convertible notes to acquire bitcoin has become a standard strategy among corporations following MicroStrategy’s playbook, the top 10 public companies with the largest bitcoin holdings have employed diverse strategies to build their positions. These strategies involve, for example, i) keeping the bitcoins they mine (only applicable to crypto mining firms), ii) using their cash reserves as seen from Tesla and Coinbase, or iii) selling more shares through At-The-Market (ATM) equity offerings. Below is a chart detailing these acquisition strategies. MicroStrategy has experimented with a host of different strategies before ultimately focusing on using convertible notes. Other firms, typically those that bought bitcoin one-off, like Tesla, have primarily used their cash reserves.
