- Despite a zero ByteTrend score, the Bitcoin network’s weekly on-chain transaction value is $13.5 billion, five times 2022 levels.
- ByteTree sold its blockchain equity holdings in Q2 for value stocks like Berkshire Hathaway, with its founder calling the AI-driven semiconductor surge a bubble.
- The firm links Bitcoin‘s slump to rising real yields, a pattern seen in its 2018 and 2022 bear markets.
- On-chain fundamentals remain strong, with daily trade volumes over $35 billion competing with major tech stocks.
In its second-quarter investor letter published on Sunday, research firm ByteTree detailed a major portfolio shift and a cautious outlook on crypto and tech markets. Founder Charlie Morris stated the AI-driven semiconductor surge, which added $10 trillion in market cap last year, is reminiscent of 1999 and “a matter of time before the bubble bursts.”
Consequently, the firm’s Whisky portfolio sold all its blockchain equities in Q2 to buy Berkshire Hathaway and other value names. ByteTree positions Bitcoin alongside Gold as a hard asset that outperforms during inflation, unlike shares and bonds.
However, Bitcoin faces significant macroeconomic headwinds. The firm claims its current slump is driven by higher real yields, mirroring the environment during its 73.8% drop in 2018 and 64.3% plunge in 2022.
Bitcoin‘s ByteTrend score is now at zero with its price below the 200-week moving average. Morris and analyst Shehriyar Ali wrote, “The current Bitcoin bear is long in the tooth, and the best news I can deliver is that real rates won’t rise forever.”
Meanwhile, the underlying network strength contradicts the bleak price action. Weekly on-chain transaction value stands at $13.5 billion, which is five times higher than 2022 levels.
Furthermore, daily trade volumes exceed $35 billion, competing with giants like NVIDIA. Despite the downturn, Bitcoin has provided a 42% internal rate of return on a trend basis since 2017, outperforming the Magnificent Seven tech stocks.
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