{"id":2712,"date":"2024-04-19T10:04:23","date_gmt":"2024-04-19T08:04:23","guid":{"rendered":"https:\/\/www.mereau-finance.com\/letter\/lettre-n36-a-mi-chemin-du-marche-haussier\/"},"modified":"2026-09-10T15:31:50","modified_gmt":"2026-09-10T13:31:50","slug":"letter-no-36-halfway-through-the-bull-market","status":"publish","type":"letter","link":"https:\/\/www.mereau-finance.com\/en\/letter\/lettre-n36-a-mi-chemin-du-marche-haussier\/","title":{"rendered":"Letter No. 36: Halfway through the bull market"},"content":{"rendered":"

Hello everyone,<\/p>\n\n\n\n

The purpose of this letter is to inform you about the current situation of the crypto-asset market as well as recent news in this field. This letter is not investment advice, but merely a sharing of my personal point of view.<\/p>\n\n\n\n

<\/p>\n\n\n\n

\n\n\n\n

News<\/h3>\n\n\n\n
\n\n\n\n

<\/p>\n\n\n\n

Hong Kong: Spot Bitcoin (BTC) and Ethereum (ETH) ETFs approved<\/a>. This Monday, Hong Kong's Securities and Futures Commission gave the green light for the listing of several spot ETFs based on Bitcoin (BTC) and Ethereum (ETH).<\/span><\/p>\n\n\n\n

\u2013<\/p>\n\n\n\n

Germany's largest federal bank launches cryptocurrency custody service<\/a>. Landesbank Baden-W\u00fcrttemberg (LBBW), Germany's largest state bank, has just announced the launch of a new cryptocurrency custody service. Offered in partnership with Bitpanda, it will target corporate clients.<\/p>\n\n\n\n

\u2013<\/p>\n\n\n\n

Pectra and EIP 3074: the update that will change the way we use Ethereum is confirmed<\/a>. EIP 3074 is confirmed for the next Ethereum update, called Pectra. This proposal will allow Ethereum addresses to take advantage of certain features previously reserved for smart contracts, with the goal of making life easier for users of wallets such as MetaMask.<\/p>\n\n\n\n

\u2013<\/p>\n\n\n\n

BlackRock: its tokenized fund is now exchangeable for USDC<\/a>. Circle, the issuer of the USDC stablecoin, recently announced a new feature allowing holders of BUIDL, the tokenized fund by BlackRock, to exchange their tokens for USDC at any time via a new smart contract. This initiative once again highlights how traditional finance players, such as BlackRock, are integrating with distributed network applications like Ethereum.<\/p>\n\n\n\n

\u2013<\/p>\n\n\n\n

Spot Bitcoin ETF: trading volume explodes and reaches 200 billion dollars<\/a>. The cumulative volume of spot Bitcoin ETFs has crossed the $200 billion mark less than 3 months after their approval by the Securities and Exchange Commission (SEC). Does this growth demonstrate a growing investor interest in this new asset class?<\/p>\n\n\n\n

\u2013<\/p>\n\n\n\n

Layer 2: Their market cap could reach $1 trillion by 2030, according to VanEck<\/a>. Asset manager VanEck recently published an in-depth report on Ethereum layer 2s, predicting a valuation of $1 trillion in market capitalization by 2030. The document also sets out various key data points for a thorough understanding of the market and its outlook for evolution.<\/p>\n\n\n\n

<\/p>\n\n\n\n

\n\n\n\n

Fundamental Analysis<\/h3>\n\n\n\n
\n\n\n\n
<\/div>\n\n\n\n
\"\"
Bitcoin's price over the last six years in euros and on a logarithmic scale.
Source : https:\/\/www.coingecko.com\/fr<\/a><\/figcaption><\/figure>\n\n\n\n
<\/div>\n\n\n\n

At the time of writing, the price of Bitcoin is 61,183 $ (on 04\/18\/24).<\/p>\n\n\n\n

<\/div>\n\n\n\n

Halfway through the bull market <\/h4>\n\n\n\n
<\/div>\n\n\n\n

The diagram below illustrates the path already completed within this bull market, signaling that we are roughly halfway through this cycle. Historically, toward the end of the cycle, performance and prices tend to increase exponentially or at least at a faster pace than at the beginning of the cycle.<\/p>\n\n\n\n

An observation of the last two cycles, 2015-18 and 2018-22, shows a resemblance: there is no euphoric surge like the one observed in 2018. I think this cycle will do the same by being relatively more moderate compared to previous cycles.<\/p>\n\n\n\n

Although we can anticipate an acceleration toward the end of the cycle, it is expected to be more moderate and less euphoric, partly due to the influence of institutional investors, notably via ETFs, which could temper excessive euphoria.<\/p>\n\n\n\n

<\/div>\n\n\n\n
\"\"
Bitcoin performance since the lowest points of each cycle.
Glassnode<\/figcaption><\/figure>\n\n\n\n
<\/div>\n\n\n\n

As I mentioned in my previous letter, the wealth transfer between long-term holders and short-term holders has begun and is currently about halfway through for this cycle.<\/p>\n\n\n\n

This trend is noticeable through the troughs observed on the blue curve below. Historically, market peaks coincide with the highest point of the troughs of this blue curve, which represents the amount of tokens held by long-term investors.<\/p>\n\n\n\n

At the same time, we can also understand the strong correlation between the price of Bitcoin and the number of these long-term token holders, which has been steadily increasing since the creation of Bitcoin.<\/p>\n\n\n\n

<\/div>\n\n\n\n
\"\"
Amount of long-term Bitcoin holders
Look Into Bitcoin<\/figcaption><\/figure>\n\n\n\n
<\/div>\n\n\n\n

Another interesting indicator is the MVRV, which represents the ratio between market value (MV) and realized value (RV), thus expressing the ratio between the current price and the realized price of the assets.<\/p>\n\n\n\n

Realized value corresponds to the average price at which each coin was last traded on the blockchain. MVRV can be considered a measure of the \u00abunrealized or latent profit\u00bb contained in the circulating supply.<\/p>\n\n\n\n

As illustrated below (blue line), this ratio is currently around 3 to 3.5. During the last bull market, this ratio reached a maximum of 10 before reversing. We are probably halfway through the current cycle, and it is possible that this ratio could reach 5 to 6.<\/p>\n\n\n\n

<\/div>\n\n\n\n
\"\"
MVRV Ratio
Glassnode<\/figcaption><\/figure>\n\n\n\n
<\/div>\n\n\n\n

BTC performance after the Halving<\/h4>\n\n\n\n
<\/div>\n\n\n\n

Following each Halving, over the subsequent 12 months, BTC's performance has been high. As a reminder, the halving occurs every 210,000 blocks on the Bitcoin blockchain (approximately every four years). It simply cuts the production of new bitcoins in half with every new block (every 10 minutes).<\/p>\n\n\n\n

Between 2009 and 2012: 50 new BTC per block
Between 2012 and 2016: 25 new BTC per block
Between 2016 and 2020: 12.5 new BTC per block
Between 2020 and 2024: 6.25 new BTC per block
Then, from 2024 to 2028: 3.125 new BTC per block
Etc., \u2026\u2026\u2026\u2026<\/p>\n\n\n\n

This phenomenon will continue until 2140<\/p>\n\n\n\n

The halving reinforces Bitcoin's scarcity, which, combined with the classic law of supply and demand, where a decreasing supply meets increasing demand, can have a significant impact on Bitcoin's value. Bitcoin's historical performance shows that halving periods have often been followed by substantial price increases.<\/p>\n\n\n\n

<\/div>\n\n\n\n
\"\"
BTC price performance after halvings
Glassnode<\/figcaption><\/figure>\n\n\n\n
<\/div>\n\n\n\n

<\/p>\n\n\n\n

Available BTC <\/u><\/span><\/span>for Trading<\/span> <\/h4>\n\n\n\n
<\/div>\n\n\n\n

To assess the supply of BTC available for trading, Glassnode calculated the current circulating supply of 19.68 million BTC and subtracted the illiquid supply, which includes Bitcoins that are largely unavailable for trading due to lost wallets, very long-term holdings, or lock-ups for various reasons. It is for this reason that we can call this chart: BTC available for trading.<\/p>\n\n\n\n

We can notice a difference in this cycle compared to previous ones: it is the decrease in BTC available for short-term trading. This suggests, once again, that there are fewer and fewer BTC available on the market for new buyers.<\/p>\n\n\n\n

<\/div>\n\n\n\n
\"\"
BTC available for trading
Glassnode<\/figcaption><\/figure>\n\n\n\n
<\/div>\n\n\n\n
\n\n\n\n

Our service<\/strong><\/h3>\n\n\n\n
\n\n\n\n
<\/div>\n\n\n\n

We offer a discretionary portfolio management service specializing in digital assets. We provide comprehensive, end-to-end human support in this space by personalizing your portfolio allocation according to your risk profile and situation.<\/p>\n\n\n\n

With our turnkey management approach, you can take advantage of industry trends without worrying about digital asset selection, in-depth token research, volatility, arbitrage, and more. You simply need to review your monthly reports and invest regularly, adopting a long-term perspective (4 years and more).<\/p>\n\n\n\n

We do not engage in daily algorithmic trading; we focus exclusively on long-term investments in projects we know and understand. Our monthly portfolio rebalancing is accompanied by an in-depth analysis of the assets, with a particular focus on their tokenomics.<\/p>\n\n\n\n

Check out our website: https:\/\/www.mereau-finance.com\/<\/a><\/p>\n\n\n\n

For any questions, observations, or if you would like to learn more about our services, please feel free to contact us by email at tristan.g@crypto-assets-management.com<\/a> or to schedule a brief phone call afterwards this link.<\/a><\/p>\n\n\n\n

\n
<\/div>\n\n\n\n
\n
\n

Discovery Pack<\/strong><\/h2>\n\n\n\n
<\/div>\n\n\n\n

Investment of under \u20ac20,000 <\/strong><\/p>\n\n\n\n

\n\n\n\n