Bitcoin
Was this expected? By Investing.com
Investing.com – The recent halving on April 19 has left the cryptocurrency market in uncharted territory, marked by significant price volatility, which should be considered a normal response to market dynamics, according to Daniel González, analyst at Bitso, leading cryptocurrency exchange in the world. Latin America.
This event, which halves rewards for miners, was the fourth since the creation of the Bitcoin protocol in 2009 and triggered a series of unexpected market moves, including a recent drop to $57,000 from the all-time high of $ 73,000 registered before. the half.
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The Bitso expert noted in an interview that this volatility is not surprising, given that the current halving cycle presented several differences compared to the previous ones.
Ahead of the 2024 halving, Bitcoin experienced an impressive bull rally, largely driven by the opening of Bitcoin exchange-traded funds (ETFs), which facilitated institutional investment in the cryptocurrency, he explained. This massive influx of capital helped drive the price of Bitcoin to all-time highs ahead of the reward reduction event, marking an unprecedented event in Bitcoin history.
However, after the halving, the market reaction has been different from previous cycles. Although an immediate price increase was expected due to the decrease in Bitcoin supply, there has been some silence and a decrease in enthusiasm among investors. This lack of quick recovery generated some anxiety among market participants, resulting in selling and a correction in the price of Bitcoin.
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“(Volatility) is something normal because many times people who have entered this market feel that at the moment of halving the price it has to increase instantly, but the reality is that this happens progressively, but also as this did not happen, the people saw that it was not the result, they started to panic, they started to sell, the famous ‘buy the rumors, sell the news’”, explained Gonzalez.
The macroeconomic context also influenced Bitcoin’s volatility. Recent statements by Federal Reserve Chairman Jerome Powell, maintaining interest rates and expressing concerns about inflation, have affected investor perceptions. Uncertainty surrounding traditional economic policies has led to increased interest in alternative assets such as Bitcoin, which are considered resistant to conventional monetary policies.
Regarding future prospects, Daniel González did not rule out the possibility of further readjustments in the price of Bitcoin.
Bitcoin price recorded a further drop to $61,000 on Thursday, although it is now trading around 62,489. Several factors influenced this decline, including concerns about high interest rates in the United States and increased regulatory scrutiny towards key players in the cryptocurrency sector.
Regulatory concerns are in the spotlight after it was revealed that the United States Securities and Exchange Commission (SEC) is investigating Robinhood (NASDAQ: ), Coinbase (NASDAQ: ) and , which could influence the perception of cryptocurrencies under the US law.
as the second-largest cryptocurrency, it is also under scrutiny, after the SEC delayed approving Ethereum ETFs until its investigation was complete.
Furthermore, a recent report suggests that more than 90% of transactions in stablecoins are artificial, increasing regulatory concerns surrounding this key sector of the crypto industry.
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The market also faces challenges related to the unlocking of altcoins worth nearly $2 billion in the coming weeks, which could negatively affect the altcoin market by increasing available supply.
These regulatory and supply developments occur in a context of uncertainty over high interest rates in the United States, leading traders to show a strong preference for the dollar over riskier assets such as cryptocurrencies.
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Bitcoin
Bitcoin (BTC), Stocks Bleed as China’s Surprise Rate Cut Signals Panic, Treasury Yield Curve Steepens
Risk assets fell on Thursday as China’s second rate cut in a week raised concerns of instability in the world’s second-largest economy.
Bitcoin (BTC)the leading cryptocurrency by market cap, is down nearly 2% since midnight UTC to around $64,000 and ether (ETH) fell more than 5%, dragging the broader altcoin market lower. The CoinDesk 20 Index (CD20), a measure of the broader cryptocurrency market, lost 4.6% in 24 hours.
In equity markets, Germany’s DAX, France’s CAC and the euro zone’s Euro Stoxx 50 all fell more than 1.5%, and futures linked to the tech-heavy Nasdaq 100 were down slightly after the index’s 3% drop on Wednesday, according to the data source. Investing.com.
On Thursday morning, the People’s Bank of China (PBoC) announced a surprise, cut outside the schedule in its one-year medium-term lending rate to 2.3% from 2.5%, injecting 200 billion yuan ($27.5 billion) of liquidity into the market. That is the biggest reduction since 2020.
The movement, together with similar reductions in other lending rates earlier this week shows the urgency among policymakers to sustain growth after their recent third plenary offered little hope of a boost. Data released earlier this month showed China’s economy expanded 4.7% in the second quarter at an annualized pace, much weaker than the 5.1% estimated and slower than the 5.3% in the first quarter.
“Equity futures are flat after yesterday’s bloody session that shook sentiment across asset classes,” Ilan Solot, senior global strategist at Marex Solutions, said in a note shared with CoinDesk. “The PBoC’s decision to cut rates in a surprise move has only added to the sense of panic.” Marex Solutions, a division of global financial platform Marex, specializes in creating and distributing custom derivatives products and issuing structured products tied to cryptocurrencies.
Solot noted the continued “steepening of the US Treasury yield curve” as a threat to risk assets including cryptocurrencies, echoing CoinDesk Reports since the beginning of this month.
The yield curve steepens when the difference between longer-duration and shorter-duration bond yields widens. This month, the spread between 10-year and two-year Treasury yields widened by 20 basis points to -0.12 basis points (bps), mainly due to stickier 10-year yields.
“For me, the biggest concern is the shape of the US yield curve, which continues to steepen. The 2- and 10-year curve is not only -12 bps inverted, compared to -50 bps last month. The recent moves have been led by the rise in back-end [10y] yields and lower-than-expected decline in yields,” Solot said.
That’s a sign that markets expect the Fed to cut rates but see tighter inflation and expansionary fiscal policy as growing risks, Solot said.
Low liquidity, regulatory uncertainty and speculative behavior contribute to inefficiency in crypto markets. But systematic approaches, including momentum indices, can reduce risks for investors, says Gregory Mall, head of investment solutions at AMINA Bank.
Low liquidity, regulatory uncertainty and speculative behavior contribute to inefficiency in crypto markets. But systematic approaches, including momentum indices, can reduce risks for investors, says Gregory Mall, head of investment solutions at AMINA Bank.
Low liquidity, regulatory uncertainty and speculative behavior contribute to inefficiency in crypto markets. But systematic approaches, including momentum indices, can reduce risks for investors, says Gregory Mall, head of investment solutions at AMINA Bank.
July 24, 2024, 5:30 p.m.
Updated July 24, 2024, 5:35 p.m.
(Benjamin Cheng/Unsplash)
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Bitcoin
India to Release Crypto Policy Position by September After Consultations with Stakeholders: Report
“The policy position is how one consults with relevant stakeholders, so it’s to go out in public and say here’s a discussion paper, these are the issues and then stakeholders will give their views,” said Seth, who is the Secretary for Economic Affairs. “A cross-ministerial group is currently looking at a broader policy on cryptocurrencies. We hope to release the discussion paper before September.”
Ether, the second-largest token, fueled a slide in digital assets after a stock rout spread unease across global markets.
Ether fell about 6%, the most in three weeks, and was trading at $3,188 as of 6:45 a.m. Thursday in London. Market leader Bitcoin fell about 3% to $64,260.
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