February 16th Bitfinex Alpha | Bitcoin’s upward momentum is positive on all time frames.
On Bitfinex Alpha
Investor confidence in Bitcoin is growing, as evidenced by the BTC price increase late last week. We believe this increase is due in part to a slowdown in Grayscale GBTC fund sales and a significant increase in overall inflows into cryptocurrency assets.
The amount of Bitcoin held by the new BTC ETF now exceeds the amount held by MicroStrategy, and continued inflows are expected. These inflows, coupled with the upcoming Bitcoin halving in 2024 and high levels of illiquid supply (over 70% long-term BTC holders), paint a very optimistic picture for BTC price movements.
On-chain data is increasingly bullish for Bitcoin, especially as the MVRV rate rises above the one-year simple moving average. Realized prices for short-term holders are also showing positive signs in this indicator as a slowing rate of price growth means profit-taking is slowing and the market consensus is that there is still room for growth.
Meanwhile, current economic conditions in the US make a rate cut less likely in March and more likely in May.Credit Officer Opinion Survey Latest senior applications show tighter lending standards across most loan portfolios It appears to be cancelled. This continued in the fourth quarter, albeit at a slower pace, with demand for loans across all categories rising in an apparent response to the easing of the decline.
This is reflected in the behavior of businesses and consumers, who are reluctant to take out new loans, as evidenced by the sharp decline in consumer credit growth. We believe that high interest rates are casting a shadow over consumer spending, which will give the Federal Reserve a compelling reason to cut interest rates soon.
But to balance things out, new data shows the U.S. services sector accelerated, driven by a rise in new orders and a recovery in employment levels.
The current picture is that the U.S. economy is showing remarkable resilience despite challenges posed by high borrowing costs, tight credit conditions, and declining pandemic-era savings.
Large government spending and consumer savings have played an important role in boosting GDP and employment growth. But clearly, high borrowing costs and tight credit conditions risk weakening economic activity, which will require the Fed to take steps to address new challenges if it is to maintain economic growth momentum and address the problem.
In the cryptocurrency space, a new Bitcoin ETF has reached a new milestone with its holdings surpassing MicroStrategy. This growth particularly highlights the strong preference of investors for easier access to these products and for delegating management to third parties.
Parallel to this momentum, the regulatory environment continues to evolve, with Hong Kong announcing a public consultation on a new licensing framework to regulate foreign exchange trading. The goal of the plan is to increase regulatory clarity and protect investors by limiting money laundering and terrorist financing risks.
Institutional interest in cryptocurrency investments can also be seen in data from the Chicago Mercantile Exchange (CME), which shows a 42% increase in Bitcoin futures trading, leading to a 35% increase in trading volume in January, reaching $73 billion. . A real Bitcoin hedge fund.
Moreover, the regulatory environment in other regions is becoming more stringent, with Korea introducing a virtual asset user protection law scheduled to go into effect on July 19. Market fraud and illegal trading.
We hope you have a productive first week of trading!