Introduction
Alex Krüger, a seasoned crypto analyst and co-founder of Asgard, an advisory firm focused on macro, capital markets, and digital assets, recently shared his insights on the future of Bitcoin and other market trends.
Published on 24 October 2023, Krüger’s blog post outlines why he believes Bitcoin’s price reaching $42,000 is almost certain. With a background in economics and two decades of experience in commodities and global macro trading, Krüger is a respected voice in the crypto community.
Bitcoin’s Resilience Amid Fake News
Krüger observed that Bitcoin maintained its value even after a false report by a crypto news outlet claimed that a Bitcoin spot ETF had been approved. Normally, such misinformation would lead to a temporary price surge followed by a decline. However, Bitcoin’s ability to hold its ground indicated robust underlying demand. Krüger emphasized that the market’s reaction to the news, whether accurate or not, can sometimes be more telling than the news itself.
Market Optimism and ETF Approval
Krüger notes that several key figures in the finance world have expressed positive sentiments about a spot Bitcoin ETF being approved by the U.S. Securities and Exchange Commission (SEC) soon. These include Mike Novogratz’s enthusiastic outlook, Blackrock’s Larry Fink’s comments on crypto attracting quality investment due to the Middle East conflict, and SEC Chair Gary Gensler’s recent positive remarks on spot Bitcoin ETFs. Krüger noted that these factors have led to a buying spree, pushing Bitcoin’s price from $28,500 to $31,000 within a few days.
Krüger is confident that the SEC will approve a spot Bitcoin ETF by 10 January 2024. He also expects the market to anticipate this approval, leading to a price surge. According to his analysis, Bitcoin could see a 20% intraday increase the day the ETF is approved and is likely to hit $42,000 by the time the ETF is launched.
Ethereum and Other Altcoins
Krüger discussed Ethereum’s performance, which he says has considerably lagged behind Bitcoin over the past week. He anticipates that Ethereum will gain attention once a Bitcoin ETF is approved. Additionally, he mentioned that Ethereum experienced a price increase just before Deribit tightened its margin requirements, leading to increased call buying activity. Other altcoins like SOL, LINK, and BSV have also been noteworthy, albeit underperforming compared to Bitcoin.
The Bond Market and Long Yields
Krüger mentioned that now is a time for accumulating duration in 20-year bonds for those with a time horizon greater than six months. He cited the favorable risk-return balance and mentioned Bill Ackman’s decision to close his short bond position as an indicator that the bottoming process in bond prices is more than halfway complete.
Uncertainty in Rate Movements
Krüger highlighted the general surprise and uncertainty surrounding the rapid rise in long yields. He pointed out that both Federal Reserve Chair Jerome Powell and U.S. Treasury Secretary Janet Yellen seem puzzled by the rate movements. Krüger suggested that Powell’s recent comments could indicate either a shift of responsibility to Congress to address the budget deficit or a signal that action may be needed to stabilize long-term yields.
Final Remarks
Krüger concluded by noting that the rise in long yields might be driven by economic optimism rather than inflation expectations. This could lead to a scenario where inflation decreases while growth remains robust.
