Cryptocurrency daily summary:
Bitcoin’s market cap to transaction fee ratio falls below Ethereum’s for the first time
US House of Representatives points out that the US SEC contradicts itself in its statements about the security of ETH
US spot Bitcoin ETFs reduced their holdings by a total of about 1,698 BTC yesterday
MicroStrategy purchased 122 BTC in April
According to data from TheBlock, the seven-day moving average of Bitcoin’s market capitalization to transaction fee ratio is lower than Ethereum’s for the first time since July 2019.
io.net released the progress of its two-week launch plan, adding a new GPU workload verification mechanism and optimizing the user experience.
The Layer-1 trusted network Trias will launch a public testnet in May, open to community members for comprehensive stress testing.
The U.S. House of Representatives Financial Services Committee issued a statement saying that the U.S. Securities and Exchange Commission (SEC)'s statement on the security of Ethereum (ETH) contradicts the statement of the agency's chairman Gary Gensler. The U.S. Banking Committee stated in the statement that they will continue to hold the SEC accountable for excessive regulation in the digital asset market, and the issue of the agency's classification of Ethereum is crucial in the current application for the issuance of the first U.S. spot Ethereum ETF.
According to Lookonchain monitoring, the spot Bitcoin ETF data on April 30 are as follows: Grayscale reduced its holdings by 1,328 BTC, worth approximately US$807 million, and currently holds 297,118 BTC, worth approximately US$18.06 billion; nine spot Bitcoin ETFs (including Grayscale) reduced their holdings by 1,698 BTC, worth approximately US$1.0322 billion.
The Hong Kong Monetary Authority said that crypto assets (especially stablecoins) are one of its work priorities in 2024.
Saylor noted in a social media post that the company purchased an additional 122 BTC in April, spending $7.8 million. As of March 31, MicroStrategy reported holding 214,278 BTC. The company may have purchased 32 BTC after March 19, when it disclosed holding 214,246 BTC.
Market analysis: BTC ends seven consecutive positive monthly lines, and the market begins to pull back
Market trend:
Bitcoin (BTC) fell from around $64,000 to below $60,000 yesterday, and was supported near the 100-day moving average. Currently, the bulls and bears are fighting over $60,000. The weak downward adjustment of Bitcoin also led to a collective decline in the altcoin sector.
Due to the popularity of Bitcoin ETFs in the United States, Bitcoin rose strongly in the first quarter and reached a historical high of nearly $74,000. However, as market expectations for the Federal Reserve's interest rate cuts weakened, demand for high-risk investments was severely impacted, resulting in a sharp drop in funds flowing into these products.
Data shows that as of April 29, net outflows from 11 U.S. spot ETFs this month reached $182 million, while in March, these funds also achieved a net inflow of $4.6 billion. Bitcoin fell nearly 15% overall in April, ending a seven-month winning streak and setting the worst monthly performance since the FTX crash.
Market hot spots:
Restaking sector: The concept of restaking is a popular concept that has emerged recently after AI and DePIN. Ether.fi ($ETHFI ) and Renzo ($REZ ) have been popular in the market after their recent launch, and the leader in the field, Eigenlayer, has launched an airdrop plan for EIGEN tokens, which will start to be applied for on May 10, and it is worth continued attention.
MEME sector: Meme coins are a hot sector in this round of bull market. Many golden dogs were born on Solana in March and Base chain in April. For example, new meme coins such as $BOME , SLERF, MEW, POPCAT, etc. have been gaining popularity. However, due to the recent decline in the market, it remains to be seen whether the MEME craze can recover soon.
OP: Optimism (OP) is a low-cost and lightning-fast Ethereum L2 blockchain. It is based on the concept of [OptimisticRollup], a structure that allows us to "optimistically" publish transaction results without actually executing these transactions on Ethereum (most of the time). The coin was relatively resilient in yesterday's overall market decline, with a 1.68% increase yesterday, making it a relatively good performing L2 sector token in recent times.
W: Wormhole (W) is a universal messaging protocol that supports multiple chains and is a leading project in the cross-chain sector. Recently, the native W token can now be circulated and used on Solana, Ethereum, Arbitrum, Optimism, and Base through Wormhole Native Token Transfer (NTT). After the completion of this release, it will bring the industry's first multi-chain governance system MultiGov and W staking governance.
Overall, the recent market focus is still concentrated on newly launched tokens, while the MEME and AI sectors, which had quick returns in the recent period, have performed sluggishly. This shows that under the current background of Bitcoin's weakness and macro liquidity tightening, capital speculation is cautious and careful, and the rotation rhythm of hot sectors and tokens is relatively fast.
Macro: The Federal Reserve holds an interest rate meeting to focus on interest rate cut policy signals
According to the schedule, the Federal Reserve will hold a two-day interest rate meeting from April 30 to May 1 local time, and will then announce the May interest rate decision at 2 a.m. Beijing time on Thursday.
Overall, the US GDP growth rate in the first quarter of this year was lower than expected, and inflation has risen. Most economists and market analysts generally believe that the probability that the Federal Reserve will keep interest rates unchanged in May is almost certain, and the Federal Reserve may become hawkish again, especially in the May interest rate decision that may be announced this week.
Economists from Bloomberg Economics, Barclays and KPMG all expressed similar views, predicting that the Fed will start cutting interest rates as early as September or December, and will only cut interest rates once this year because it will take longer for inflation to improve. In addition, although the possibility of raising interest rates is small, if inflation data continues to disappoint, it is not ruled out that interest rates may be raised again.
Back to this interest rate meeting, although the main highlights of the Fed’s decision this week do not involve interest rate adjustments, the focus will include inflation trends, the Fed’s confidence level in inflation, the possible timing of rate cuts, and whether there is a possibility of rate hikes in the future.
As the current inflation data shows that the progress of anti-inflation has stagnated, the market is concerned about when the Fed can achieve its inflation target of 2%. Fed officials may not update their quarterly interest rate forecasts, but inflation data will become the focus of discussion.
Reflecting on the capital market, U.S. stocks have also performed weakly recently. The three major U.S. stock indexes all closed sharply lower yesterday, with the Nasdaq down 2.04% and the S&P 500 down 1.57%. Cryptocurrency stocks fell across the board, with MicroStrategy's largest decline reaching 17%.
Overall, the recent continued net outflow of funds from crypto spot ETFs to a certain extent reflects the difficulty in improving macro liquidity in the short term. We will continue to pay attention to the progress of this month's interest rate meeting.
