Fidelity Warns Against Losing Focus

Fidelity Digital Assets highlighted a single post on X to introduce its latest research note: “Bitcoin has increased approximately 63% since its 2024 halving price with 27% of this halving epoch completed. While previous epochs experienced significant surges, a new narrative might be emerging: one of growing maturity, deeper adoption, and network resilience.” The tweet followed shortly after the release of “2024 Bitcoin Halving: One Year Later,” authored by senior analyst Daniel Gray, who argues that the apparent stagnation in price movements conceals “a strengthening foundation.”

Fidelity Highlights Bitcoin’s Quiet Ascendancy

“Bitcoin presents a complex narrative a year after its fourth halving, showcasing signs of consolidation, network resilience, and increasing institutional adoption,” writes Gray, emphasizing that structural indicators “point towards a solidifying foundation.”

While earlier cycles resulted in triple- and even quadruple-digit percentage increases by this point, Gray suggests that the gentler trajectory indicates maturation: “Historically, we would expect to be deep into a bull market at this stage of the fifth epoch — yet this cycle seems to be unfolding with more caution.”

From a market-share viewpoint, the data is clear. “Bitcoin’s market dominance, excluding stablecoins, has reached over 72.4% as of May 11, marking a new eight-year high,” notes Gray, highlighting that Ether and Solana have lost ground even as “diversification in the lower echelons of assets has not yielded a clear leading alternative.”

Further Insights

On-chain security indicators reflect a similar trend: “Bitcoin’s daily hash-rate surpassed one zetta hash per second on two occasions in April, indicating ongoing investment in mining infrastructure despite a 60% decline in hash price post-halving,” he observes.

Trading behaviors in the spot market have begun to align with these fundamentals. Bitcoin marked a record intraday high of $109,486 on May 21 before rising above $111,000 on the day known as Pizza Day, stabilizing near $110,600 at the time of writing.

The upswing has been driven by a renewed interest from US spot ETFs, which attracted $934.8 million in net subscriptions on May 22—the largest single-day inflow in nearly four weeks. This trend is mirrored in derivatives activity: total futures open interest hit a record $80 billion on May 23, representing about a 30% increase since the beginning of the month, according to CoinGlass data.

Further Insights

Conversely, funding rates across most cryptocurrency exchanges are hovering at the baseline or below. “This is the least euphoric set of new all-time highs in Bitcoin’s history,” remarked crypto analyst Alex Krüger via X.

Gray warns that investors should pay less attention to flashy returns and focus more on the underlying structure being established. “Even though returns have been more modest compared to earlier cycles, structural metrics indicate a strengthening foundation. Overall, Bitcoin appears to be in a potential maturation phase—something investors may deem significant beyond short-term price fluctuations,” he writes.

His final observation is straightforward: “One year after the halving, Bitcoin’s price action may appear subdued, but its fundamentals seem stronger than ever … this could be a cycle that reshapes Bitcoin’s role in contemporary portfolios.”

Put simply, Fidelity’s message for casual observers is clear: don’t take your eyes off it.

At the time of writing, BTC was valued at $109,563.

Image created with DALL.E, chart sourced from TradingView.com