As we enter 2024, Coinbase’s weekly “Constructive Outlook” points towards a bullish run for Bitcoin, with various macroeconomic and technical factors in its favor.

Bitcoin ETFs and the U.S. Economy

Recent trends indicate a shift in focus from technical pressures to macroeconomic factors. Large liquidations, such as FTX’s move to dispose of Grayscale Bitcoin Trust shares, coincide with increased net inflows into US spot Bitcoin ETFs, averaging over $200 million daily. This surge in ETF activity, totaling $1.46 billion since January 11, suggests a growing market sentiment favoring digital assets.

The U.S. economy’s core PCE inflation aligns with the Federal Reserve’s long-run target. However, concerns of a widening budget deficit and a cooling labor market are increasing. Despite strong retail sales, the economy may face a slowdown in 1H24.

The Federal Reserve, acknowledging balanced risks, delayed decisions on tapering its quantitative tightening program till March’s end. This hints at a potential easing cycle starting on May 1, aligning with Bitcoin’s halving in late April, potentially supporting digital assets.

Solana’s JUP Airdrop 

Solana’s recent airdrop for Jupiter, one of the largest ever, signifies a renewed ecosystem. Token launches and increasing stablecoin inflows contribute to the attractiveness of Solana for developers. Despite some restraints during the airdrop, such as transaction failures during the airdrop and fee surges, Solana’s resilience for better performance is commendable. The upcoming 1.18 release may address some issues, emphasizing the industry’s focus on enhancing user experiences.

Notable Developments 

FTX’s commitment to repaying customers, potential SEC approval for spot Ethereum ETFs, and global regulatory developments underscore the evolving crypto landscape. Institutional and regulatory advancements contribute to a positive market sentiment.

Developments in the crypto and digital assets market are evident not only in the U.S. but also around the world. The global crypto landscape is dynamic, from the Bank of England’s exploration of a digital pound to MiCA regulatory guidelines in the EU and Germany’s significant bitcoin seizure.

Coinbase’s report has detailed positive market sentiment supporting Bitcoin stabilized CME OI and solid ETF flows. However, Ethereum’s waning interest raises questions. Traders’ increasing comfort with long crypto exposure suggests a favorable market outlook. As we navigate through Q2, 2024, these trends paint a positive picture for Bitcoin. 

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