Analyst Who Called Bitcoin's Pre-Halving Rally to $70K Turns Bearish

Markus Thielen, founder of 10x Research, has de-risked his portfolio in the wake of rising Treasury yields.

AccessTimeIconApr 16, 2024 at 5:50 a.m. UTC
Updated Apr 16, 2024 at 6:45 p.m. UTC
  • Dwindling odds of Fed rate cuts and rising bond yields have weakened the bullish case in cryptocurrencies and stocks.
  • Flows into the U.S.-listed spot BTC ETFs have dried.

The analyst who predicted bitcoin’s (BTC) bottom in November 2022 and the recent pre-halving surge to record highs has turned bearish on risk assets, including technology stocks and cryptocurrencies.

“Our growing concern is that risk assets (stocks and crypto) are teetering on the edge of a significant price correction. The primary trigger is the unexpected and persistent inflation. With the bond market now projecting less than three cuts and 10-year Treasury Yields surpassing 4.50%, we may have arrived at a crucial tipping point for risk assets,” Markus Thielen, founder of 10X Research, said in a note to clients Tuesday.

“We sold all our tech stocks last night (at the open) as the Nasdaq is trading very poorly and reacting to the higher bond yield. We only hold a few high-conviction crypto coins. Overall, we are bearish risk assets (stocks + crypto).” Thielen added.

Traders have recently scaled back pricing for 25 basis point Fed rate cuts this year to less than three from six at the beginning of the year, data from CMEGroup show.

The so-called hawkish repricing, spurred by sticky U.S. inflation and a resilient labor market and economy, has lifted the 10-year Treasury yield 40 basis points to 4.61% this month, the highest since November 2023. The sharp rise in the so-called risk-free rate has dented the appeal of investing in high-risk/high-return assets like technology stocks and cryptocurrencies.

"Most of this 2023/2024 bitcoin rally is driven by expectations that interest rates would be cut, and this narrative is being seriously challenged now," Thielen noted, adding that inflows into the spot exchange-traded funds (ETFs) have dried.

The U.S. Securities and Exchange Commission (SEC) greenlighted nearly a dozen spot BTC exchange-traded funds (ETFs) in January, allowing investors to take exposure to the cryptocurrency without having to own and store it.

Since then, nearly $12 billion has flowed into these investment vehicles. However, most flows happened last quarter, powering the cryptocurrency higher, and the demand has faded this month.

Bitcoin ETF inflows. (10x Research)
Bitcoin ETF inflows. (10x Research) (10x Research)

The 5-day average of the net inflows into the spot ETFs has dropped to zero.

"After an initial novelty hype, ETF flows tend to run out unless prices continue increasing—which they have not done since early March. With two—to 17% drawdowns, those investors might stay on the sidelines," Thielen explained.

Some observers expect the correction to gather pace once the hype surrounding the Bitcoin network's quadrennial mining reward halving due on April 20 fades. The inbuild code will reduce the per-block coin emission to 3.125 BTC from 6.25 BTC, effectively halving the pace of supply expansion.

Bitcoin changed hands at $62,600, representing a 42% year-to-date gain, CoinDesk data show. The CoinDesk 20 Index, a broader market index, stood at 2119 points at press time, up 17% for the year.

Edited by Parikshit Mishra.


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Omkar Godbole

Omkar Godbole is a Co-Managing Editor on CoinDesk's Markets team.

Read more about