Market updates Crypto trends

Bitget Hot Takes (Jun 03 - Jun 09, 2024)

Intermediate

2024-06-12 | 10m

Bitget Hot Takes is the exclusive weekly newsletter series by Bitget Academy, which sums up BGB performance, what's new at Bitget, and the latest market movements.

The latest Bitget Hot Takes can be found here: Market Updates

Central Themes

• U.S. CPI data and FOMC meeting on June 12.

• Net outflows from Bitcoin and Ethereum exchanges suggest cautious investor behaviour.

• IBIT, now the largest Bitcoin ETF, saw US$948.9 million in inflows last week.

Week 23: Cautious Optimism

In Week 23, Bitcoin reached a high of US$71,908 and a low of US$67,590, marking a slight increase from the previous week. This rise indicates sustained investor confidence and interest in Bitcoin, likely due to favourable market conditions and positive sentiment. Conversely, Ethereum saw a decline, with a high of US$3,887 and a low of US$3,615.

Notable net inflows into Bitcoin ETFs included IBIT (US$948.9 million), FBTC (US$685.4 million), and ARKB (US$124.2 million), suggesting a strong preference for these ETFs, particularly IBIT, which has now become the largest Bitcoin ETF. This shift likely results from IBIT’s lower fees (0.25%) compared to GBTC (1.5%). Significant outflows from GBTC (-US$119.1 million) reflect investor migration towards more cost-effective options. Significant inflows into BlackRock’s IBIT highlight a shift in investor preference towards cost-effective investment options. The total net flows of spot Bitcoin ETFs amounted to US$1.745 billion, significantly outpacing the $157.2 million seen in futures ETFs.

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Spot Bitcoin ETFs experienced varied performance, with EZBC, ARKB, BTCW, and BRRR seeing minor decreases of -0.7%, while DEFI saw a larger decrease of -1.2%. BITX, a 2x leveraged Bitcoin futures ETF, had the worst performance over the five-day period in W23 (-2.1%). Compared to traditional market benchmarks like the NASDAQ Composite (+1.6%) and SP 500 (+0.9%), which both showed positive performance, crypto ETFs slightly underperformed, which may stem from broader market trends favouring traditional equities over crypto assets.

Among the top 5 cryptocurrencies by market cap, Bitcoin and BNB saw positive performances, increasing by 2.4% and 13.6%, respectively. Significant net outflows from exchanges for both Bitcoin (-46,608 coins, or -US$3.178 billion) and Ethereum (-832,193 coins, or -US$3.140 billion) indicate potential sell-offs or transfers out of exchanges. These outflows align with the net outflows observed in GBTC and inflows into lower-fee ETFs like IBIT and may reflect a cautious approach by investors.

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Crypto and mining stocks had mixed performances over the five-day period, with COIN being the best performer (+5.0%) and BITX the worst (-2.1%). Mining stocks saw the highest increase in volume (+71.0%), indicating strong trading activity and interest in the mining sector. Recent developments in the mining sector add more context to this trend. Bitdeer, a NASDAQ-listed mining company, announced up to US$150 million in private placement funding, emphasising its robust technologies and RD. Riot Platforms reported record Q1 2024 financial results with a net income of US$211.8 million and significant mining revenues. Marathon Digital also showed strong performance, with 850 BTC produced in April and substantial first-quarter gains. Core Scientific and CleanSpark reported notable production and financial results, contributing to the overall positive sentiment in the mining industry.

Recent reports highlight Bitcoin's longest winning streak since March, driven by expectations of Federal Reserve rate cuts this year. As of June 05, 2024, Bitcoin reached US$70,530, showing investor confidence buoyed by the prospect of lower interest rates. This rally is supported by moderate US inflation data and a softer job market, which have led to significant drops in Treasury yields and easing financial conditions. The positive sentiment is also reflected in inflows into US exchange-traded funds and regulatory progress in Washington.

Setting The Tone: Monday Performance

The global market cap at the end of Week 23 was US$2.661 trillion, a 1.5% decrease from the opening on Monday June 03. The Fear Greed Index stood at 72/100 (Greed) on June 09 and increased to 74/100 (Greed) on June 10, indicating a prevailing sentiment of greed despite market cap fluctuations. This high index suggests continued optimism among investors.

On Monday, June 10, Bitcoin and Ethereum prices remained relatively stable, with Bitcoin reaching a high of US$70,146 and a low of US$69,232, and Ethereum a high of US$3,711 and a low of US$3,648. This stability suggests a period of consolidation where the market digests recent gains and awaits further catalysts.

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Spot Bitcoin ETFs saw minor gains, with HODL and EZBC performing the best (+0.4% and +0.2%, respectively). Most other ETFs like IBIT, GBTC, FBTC, ARKB, BTCW, and BRRR showed uniform positive changes of around +0.3%. These minor gains indicate cautious optimism among investors, with no major disruptions or news influencing significant price movements.

Crypto stocks had mixed daily returns, with COIN leading the gains (+3.6%) and BITI the worst performer (-0.3%). BITI, being a short Bitcoin futures ETF, gains value when Bitcoin's price falls, explaining its negative performance as Bitcoin prices remained stable. COIN also saw the highest trading volume (US$1.583 billion).

In the futures markets, the funding rate for Bitcoin stood at 0.0121% and for Ethereum at 0.0110%. The long/short ratio was balanced, with Bitcoin at 49.75% long and 50.25% short, and Ethereum at 48.94% long and 51.06% short. Both Bitcoin and Ethereum saw minor decreases in open interest, -0.1% and -0.8%, respectively. These metrics suggest a balanced market sentiment, with neither longs nor shorts dominating, and a slight reduction in trading positions.

On June 11, cryptocurrencies dipped while US equities posted mixed returns, with Bitcoin trading around US$66,000 after briefly surpassing US$70,000. The SP 500 and Nasdaq Composite indexes showed minor fluctuations, with the FOMC beginning its two-day meeting. The market awaited key announcements on interest rates and inflation data on Wednesday (June 12), with the CPI report expected to show a 0.3% month-over-month increase or minimal immediate impact on markets. Analysts predicted that while the CPI report is crucial, its impact would be overshadowed by the Fed’s subsequent announcements.

Overall, the data from Week 23 and Monday, June 10, paints a dynamic and cautiously optimistic view of the crypto market. Despite challenges like underperformance compared to traditional markets and significant outflows from exchanges, strong investor confidence in lower-fee ETFs and a general sentiment of greed suggest potential for future growth and stability. The market closely watches macroeconomic indicators and regulatory changes to forecast future trends and investor behaviour.

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