BetterX Recap: Updates this weeks Crypto News – 11 Apr 2024
BetterX Recap: Updates this weeks Crypto News – 11 April 2024
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As we approach the Bitcoin halving in April, we invite you to explore this week's update.
Digital Asset Headlines This Week
Bitcoin Rebounds to $70K, Shrugging Off Hot U.S. Inflation Print. Major U.S. equity indices closed the day lower after disappointing CPI numbers, while BTC was up 1%.
Silk Road Bitcoin Worth $2B Moved by U.S. Government: On-Chain Data. The last confirmed government sale was just more than a year ago.
Hong Kong is set to approve its first spot bitcoin ETFs in April, sources say - Reuters
Bitcoin long-term holders begin to ease off profit-taking: Glassnode - The Block
Ripple, developer behind XRP Ledger, enters stablecoin fray versus Tether, USDC - Coindesk
Trading Desk Insights
Macroeconomic Environment
The US labor market added 303,000 jobs in March, significantly surpassing the expected figure of 200,000 and driving the unemployment rate to 3.8%. With the strong jobs data, expectations have been reset for aggressive rate cuts, but now the market expects the Fed to adjust borrowing costs more cautiously.
Despite geopolitical tensions and increasing energy costs, food inflation has slowed after a challenging period of rising prices caused by geopolitical tensions.
A USD 40 billion market crash led to Terraform Labs and its co-founder Do Kwon being found liable for defrauding investors. To tap into the growing stablecoin market, expected to reach USD 2.8 trillion by 2028, Ripple recently released its own US-dollar-pegged stablecoin.
Technical Analysis
In anticipation of the March US CPI report, the US Dollar Index (DXY) has been hovering in a range, suggesting that investors are waiting for the print to make directional bets.
In the commodities sector, gold prices remain near record highs, supported by robust demand from both central banks and retail investors. This sustained interest in gold is leading investors to explore relative value assets such as silver and platinum.
Oil products declined, with Brent trading back below USD 90 and WTI below USD 85. This movement is attributed to selling pressures in diesel and gasoline along with fluctuating geopolitical risk premiums.
Derivatives
In the derivatives market, the Volatility Index (VIX) has come down to 15 in anticipation of the CPI figures. Bitcoin (BTC) volatility is in a strong downtrend trend after reaching 73, indicating that options are becoming cheaper. Over the past week, the quantity of BTC calls bought exceeded the quantity of puts bought by 47%, indicating a bullish market sentiment amidst BTC’s pullback.
The Bitcoin halving will be different this time - the institutions are here.
The US Securities and Exchange Commission approved 11 spot bitcoin ETFs shortly after Bitcoin celebrated its 15th birthday in January 2024.
This marked the end of the decades-long evolution of digital assets from a niche curiosity among "cypherpunks" to an alternative asset class attracting the attention of some of the world's largest asset managers.
Another major milestone is approaching in the coming weeks — the fourth Bitcoin halving. The previous three halvings have largely followed a distinct pattern of heightened market activity, causing prices to rally before they moved into a correction phase, as crypto natives are familiar with.
We can look to the past to predict how the market might respond, but I believe the upcoming halving is unlike any other because professional investors have entered the crypto space.
During the past few years, private wealth, family offices and large traditional financial institutions have begun incorporating digital assets meaningfully into both their product offerings and investment portfolios for the first time in conjunction with a halving. As a result, this halving will have a different aftereffect from all the others because it changes how the entire industry operates.
The halving of Bitcoin over the past 15 years has been a milestone in the evolution of digital assets.
In 2012, digital assets were an esoteric niche driven by early adopters' technological curiosity and libertarian ethos.
By the second halving in 2016, mainstream awareness of Bitcoin had intensified, so much so that CME Group launched its Bitcoin price indices later that year, laying the first foundations for institutional interest.
By the third halving in 2020, the landscape had dramatically changed, with digital assets capturing the hearts and wallets of retail investors. Accessibility was accelerated by the proliferation of user-friendly investment platforms, which led to a surge in mainstream adoption.
Despite lingering concerns about crypto's legal standing and role in a credible investment portfolio, most professional investors remained on the sidelines by 2020. Those who were prepared to get their feet wet realized there was a lack of trustworthy exchanges, platforms, and custodians that could uphold the regulatory, operational and security standards expected of any professional counterparty. Other financial institutions have also launched digital asset platforms since then, recognizing the gap in the market.
During the year 2022, everything changed when major crypto exchanges and hedge funds collapsed for billions of dollars, causing a massive crisis of confidence in the industry. The events were not triggered by a failure of blockchain technology, but rather by poor corporate governance and risk management. Once bitten twice shy, investors realized that relying on unregulated platforms exposed their digital asset portfolios to significant operational and technology risks.
Professional investors will be more comfortable working with such counterparties, thereby gravitating towards a platform ecosystem in this direction. As a result of all these factors, the fourth Bitcoin halving is likely to be remembered as a turning point that ushered in a transformational shift within the digital asset industry, one that has evolved into a trustworthy and professionally run market.
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