Can US Inflation Still Move Bitcoin? ✊
Can US Inflation Still Move Bitcoin? ✊
Bitcoin rebounds.US inflation still above 2%, impacting Bitcoin's risk appeal. Tesla's missed profit opportunities. CFTC chair raises concerns. Google's ad policy changes.
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Bitcoin has rallied back to the $42,000 mark after a tough week - coinciding with the ETF outflows.
The economic indicators suggest a potential soft landing by the Federal Reserve.
The US's inflation measure, the Personal Consumption Expenditure (PCE) Index, showed a 2.9% annual rise and a 0.2% monthly increase last December.
While core PCE saw a slight monthly uptick, it dropped 3.2% annually, signalling a cooling trend in most sectors.
As we edge into trading, stocks took a minor hit, but Bitcoin and other cryptos didn't see much of a shake-up.
Before the inflation update dropped, Bitcoin bobbed at $41,122.08, took a slight dip, and bounced back to $42,287 now.
Why Care About US Inflation If You're Eyeing Bitcoin?
The PCE's still hovering above the Fed's 2% sweet spot, despite aggressive rate hikes since March 2022.
This aggressive approach by the central bank could lead investors to ditch riskier assets like Bitcoin for the safer shores of government bonds.
However, when the FED eases up on the rates, risk appetites grow, potentially boosting Bitcoin's price as investors look for higher returns.
Come Jan 31, 2024, the US Treasury's set to spill the beans on its borrowing strategy for the year.
More borrowing could mean less love for government bonds if the risk of default climbs, possibly making Bitcoin an attractive alternative.
The Bitcoin ETF Effect
The green light for Bitcoin ETFs is a big deal.
What's Happening now? There's a notable increase in net outflows, hitting a peak of $158 million on Thursday. Despite these outflows, particularly from Grayscale's Bitcoin Trust, analysts like Noelle Acheson are cautiously optimistic, suggesting that while flows are important, they aren't the sole drivers of Bitcoin's price movements.
Aiming for the Stars?
The upcoming halving will slash mining rewards from 6.25 BTC to 3.125 BTC per block. And everyone is seeing a price surge.
Analysts eye a potential parabolic rise post-halving, with some forecasts suggesting a peak at $120,000.
Optimal DCA Period: The 90 days leading up to a halving have historically been prime for DCA investments. With the halving near, this period could offer a lucrative opportunity for Bitcoin accumulation.
TTD Tesla 🏎️
Tesla initially jumped into the Bitcoin game in February 2021, buying a massive $1.5 billion worth. Back then, Bitcoin was trading at around $36,000.
Since Tesla's first Bitcoin balance report on Feb. 8, 2021, here's the breakdown:
Tesla's stock (TSLA) compared to Bitcoin (BTC): Down about 40.1%.
Bitcoin (BTC) versus the US Dollar (USD): Up around 7.39%.
Tesla (TSLA) versus the US Dollar (USD): Down roughly 35.7%.
Tesla's Sales and What-Ifs
Early Sales: Tesla sold about 10% of its Bitcoin stash in March 2021. Then, in Q2 2022, it let go of roughly 75% of its reserves.
Why? Elon Musk mentioned these sales were to show off Bitcoin's liquidity and to strengthen Tesla's financials during uncertain times.
Missed Profit: If Tesla had held onto all its Bitcoin, they could've made over $300 million in profits, considering Bitcoin's current price around $41,500.
They're sitting on about 9,720 BTC, and they haven't touched it lately, hinting at a more cautious approach.
TTD Blockquote 🔊
Commodity Futures Trading Commission Chair Rostin Behnam.
"The need for federal legislation over cash market digital assets has never been more critical, and I will continue my call for action."
Behnam is raising eyebrows over the recent green light for spot bitcoin ETFs.
With trading in these ETFs hitting the billions, Behnam's sounding a note of caution and pushing for new crypto laws.
What’s the Deal? Just two weeks after the SEC nodded through the first spot bitcoin ETFs, CFTC's Behnam is flagging potential risks.
Behnam’s been on a campaign for federal crypto regulation, arguing the current approval could be misleading for both retail and institutional investors due to the lack of regulatory oversight on the underlying digital assets.
What he said?
There's nothing in place to "address the opaque and inconsistent practices in the cash markets for digital assets."
"I fear that the regulatory approval of bitcoin ETPs introduces risk that, in spite of yellow flags, market participants, retail and institutional alike, may mistake the technical approval of a product—with actual regulatory oversight of the cash commodity digital assets."
"The concerns I have publicly voiced for the better part of six years regarding the digital asset commodity spot market have only become magnified."
Where’s ETF?🚨
Analysts believe that Charles Schwab, a multi-trillion dollar asset manager, will eventually launch its own Bitcoin👇
TTD Google 👀
Starting this Monday, Google's set to shake up its ad policy, potentially opening doors for spot Bitcoin ETFs to hit the digital ad space.
Google's updating its rules to allow ads for "Cryptocurrency Coin Trusts" in the US. Given the SEC's recent thumbs up for 11 spot Bitcoin ETFs, the timing couldn't be more intriguing.
Considering Google churns through over 8.5 billion searches a day, the potential for reaching a vast audience is enormous.
This isn't the first time Google ads have been linked to potential crypto boosts. Back in 2021, when the SEC was eyeing Bitcoin Futures ETFs (later approved), the community was already keen on the impact of Google ads.
TTD Cramer👨🏻🦰
That ETF that was all about betting against Jim Cramer's stock picks, called the Inverse Cramer ETF (SJIM), is officially throwing in the towel.
Launched back in March 2023 with a bit of a buzz, it turns out the buzz wasn't loud enough. After a less-than-stellar 10 months and a 15% dip, they've decided it's game over.
SJIM didn't quite capture investors' imaginations, gathering just $2.4 million in assets. Its last trading day is slated for Feb 13, with liquidation to follow.
This ETF's closure follows its sibling, the Long Cramer ETF (LJIM), which was also discontinued in August 2023 after a modest 2.2% gain and $1.3 million in assets. LJIM aimed to profit from following Cramer's stock picks.
Cramer's Track Record: Jim Cramer, known for his energetic stock market insights on Mad Money, has had a mixed track record, making him a controversial figure among retail traders. His fluctuating stance on crypto has only added to the debate.
TTD Surfer 🏄
Robert F. Kennedy Jr. has pledged to fight against the development of a CBDC in the United States.
Harvest Fund Management, a major Chinese asset manager, has reportedly filed an application for a spot bitcoin ETF in Hong Kong.
South Korea's blockchain-based karaoke platform, Somesing, was hacked over the weekend, resulting in the loss of $11.5 million worth of its native token, SSX.
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