Samson Mow, CEO of JAN3, has identified a number of crucial indicators that could shape bitcoin's trajectory in the coming months. Among many, Mow lists how capital flows into bitcoin through spot ETF issuers, actual inflation, hash rate evolution, and others.
bitcoin ETF Timely Inflows Are a Metric to Monitor Closely
On Specifically, the CEO emphasizes the importance of the bitcoin Spot ETF inflow metric. The United States Securities and Exchange Commission (SEC) recently approved several spot bitcoin ETFs for the first time in over ten years.
Some of Wall Street's biggest players, including BlackRock and Fidelity Investments, have been leading the chart, buying more coins over the past three weeks. According to Lookonchain dataeight bitcoin spot ETFs purchased 4,160 btc as of January 26. At the same time, Grayscale Investments, the issuer of Grayscale bitcoin Trust (GBTC) shares, offloaded 9,932 btc.
Prices could rise as more institutional investors gain exposure to bitcoin through regulated ETFs. For now, however, traders are keeping an eye on how quickly Grayscale Investments is dumping its GBTC shares, picking up btc, and even distributing them to target bitcoin ETF issuers. The conversion of GBTC to btc could affect prices, generating more selling pressure and negating general optimism among holders.
Hash rate is rising even as miners abandon btc
Ahead of the bitcoin halving event scheduled for early April 2024, Mow is also looking at the network's hash rate. The hash rate measures the computing power channeled into the network, securing the blockchain.
Generally, the higher it is, the healthier the mining ecosystem. In turn, this could boost investor confidence, indicating that miners, while expecting a drastic drop in revenue over the next three months, remain optimistic about the network's prospects. So far, bitcoin's hash rate stands at over 559 EH/s, a slight decrease from the all-time high of around 632 EH/s recorded in January 2024, according to data from Y Charts on January 29 shows.
Still, despite the hash rate increase, CryptoQuant btc/chart/miner-flows/miner-reserve?miner=all_miner&window=DAY&sma=0&ema=0&priceScale=log&metricScale=linear&chartStyle=line” target=”_blank” rel=”noopener nofollow”>data shows that miners have been dumping their coins, selling them at spot prices. Over the past week, miners sold thousands of btc, contributing to the downtrend.
It remains to be seen whether this sell-off will continue in the coming weeks. Typically, the more miners dump their coins through major crypto exchanges, the more the prices become depressed, which affects sentiment.
Beyond these, the CEO also tracks macro indicators such as the US M3 money supply, the speed with which countries adopt bitcoin, and real inflation in the world's leading economic power.
In the United States, the money supply and real inflation have fallen moderately due to the relatively high interest rate. However, this could change if the Federal Reserve slashes interest rates in the coming months.
Featured image from Canva, TradingView chart
