Bitcoin miners make up about 42% of the $CRYP ETF. One should pretty much consider this a Bitcoin mining ETF.

This is important, as Bitcoin mining is a highly cyclical business. The interesting part of its cyclicality, is that the cycle is highly predictable, unlike the commodities cycle.

I have done an analysis of Bitcoin, and Bitcoin miner returns over the past two cycles. Note: I have only analysed miners over the 2020 halving cycle (couldn't get reliable data for 2016 cycle), using $MARA, $RIOT, $HUT, $CLSK as miner samples.

What this analysis indicates is you buy $BTC miners about 6 month prior to halvings, and exist 12-18 month post halving. Miners, on average, outperformed $BTC by about 5x over the last cycle during this window. However, holding miners outside this window will destroy ones capital. Refer below for relative returns. The yellow and grey lines are $BTC returns, and the green line is the average return for the sample miners:

DISC - I don't own $CRYP, but own $CLSK.

Microstrategy issued over 1 million shares to raise $600 million USD to buy more Bitcoin.

"On December 27, 2023, MicroStrategy Incorporated (“MicroStrategy”) announced that, during the period between November 30, 2023 and December 26, 2023, MicroStrategy, together with its subsidiaries, acquired approximately 14,620 bitcoins for approximately $615.7 million in cash, at an average price of approximately $42,110 per bitcoin, inclusive of fees and expenses. As of December 26, 2023, MicroStrategy, together with its subsidiaries, held an aggregate of approximately 189,150 bitcoins, which were acquired at an aggregate purchase price of approximately $5.895 billion and an average purchase price of approximately $31,168 per bitcoin, inclusive of fees and expenses"

Microstrategy, which is a 8.5% holding in $CRYP, was up 11.5% on the announcement.

Given that bitcoin miners make up a big chunk of the CRYTPO ETF, it is worth considering

Given that we are still 4 months out from the next Halving, & with global liquidity rising, we are most likely in the first half of a digital asset bull market.

There are a few interesting dynamics at play when it comes to Bitcoin miners:

1) Transaction fees have significantly increased as a result of increased transactions and the emergence of Ordinals NFTs. Transaction fees are up 1000% over the past 3 months.

2) Bitcoin miners need to sell Bitcoin rewards in order to fund their operations. For example, Marathon Digital Holdings sold 60% of Bitcoin mined to fund operations in Q3 2023. However, as the Bitcoin price rises and the transaction fees increase, they will be able to reduce the percentage of Bitcoin sold as the bull market develops.

3) Bitcoin price is up approximately 50% over the past 3 months.

What this all means is that Bitcoin miner revenue is likely to double in Q4, digital assets on miner balance sheets will increase 50% in value, and this will also result in miners selling far less bitcoin to fund operations. The resultant reduction in Bitcoin supply will also put upward pressure on the Bitcoin price - a virtuous circle........

DISC - Held in Strawman only....

Coinbase is about 10% of the CRYP ETF, so a key contributor to performance. Key metrics:

• Trading Volume: $327 BN, up 616% on PCP, but down 29% on prior quarter.
• Revenue: $1235 M, up 230% on PCP, but down 39% on prior quarter.
• Net income: $406 M, up 300% in PCP, but down 75% on prior quarter.

Coinbase's results are highly variable quarter-to-quarter, and dependent on the Crypto market, which is incredibly volatile. They reported Coinbase decline in trades is no worse than the wider market (i.e. not losing market share).

Guidance

October trading volume is at a record high, and they have upgraded annual guidance.

NOTE: Coinbase is down 10% in after hours trading - suggest those interested hold off buying CRYP until Thursday....

One interesting graphic from their letter is below, and compares Crypto adoption to internet adoption.