Short Term Holder Realized Price (STH-RP)
Bitcoin short-term holders have increased their holdings from 19% at the beginning of the year to 26.1%. The current average cost basis is about $61,947, so it must be maintained above this level to avoid triggering a sell-off. Because if the price falls below its short-term holders' cost price, there is a high probability that buyers will sell quickly.
After correcting more than 20% after breaking above $70,000 for the first time since early April, Bitcoin is now just 4% below its all-time high ($68,900 at the time of writing). Pullbacks of this magnitude are normal as these pullbacks allow committed Bitcoin holders to buy/increase their Bitcoin positions at low prices.
Spot ETF
This week, the SEC officially approved the Ethereum spot ETF on Form 19b-4s, and we are waiting for the approval of Form S-1 to get the final green light for the ETF to start trading (there will be a delay of 2 weeks to 5 months between 19b-4s and S-1s approval)
The ETH/BTC ratio, a chart that shows the dominance of cryptocurrencies relative to Bitcoin, rose from 0.045 to 0.055 on this news and it continues to climb. With the launch of these ETFs and the inflow of early funds, the ETH/BTC ratio still has room to rise in the coming weeks and months.
Bitcoin spot ETFs have broken all ETF records, amassing over $30 billion in AUM in less than two weeks after launch. To date, nine new Bitcoin spot ETFs hold over 220,000 Bitcoins, valued at over $14.7 billion (excluding Grayscale’s GBTC).
FIT21 bill passed by the U.S. House of Representatives
This week, the U.S. House of Representatives passed the 21st Century Financial Innovation and Technology Act, also known as the "FIT21 Act." The bill establishes additional "regulatory clarity" that many investors have been asking for years. The bill provides guidelines for determining which crypto assets are commodities and which are securities, and what regulations financial institutions must comply with.
The main provisions of the FIT21 Act include:
Divides jurisdiction between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
Provide consumer protection through transparency and disclosure requirements.
Institutions are prohibited from preventing the use of encryption.
Ask the Treasury Department to study stablecoins.
Defining when a decentralized network is no longer considered a security.
Establish processes for authenticating decentralized assets as commodities.
The bill still needs to pass the Democratic Senate and a Democratic White House to become law. Given the bipartisan support in the House, I remain optimistic and we will be watching this closely in the coming days.
U.S. S&P Global Composite PMI Index
"The S&P Global U.S. Composite PMI flash surged to 54.4 in May, up from 51.3 in April. This was the highest level since April 2022 and exceeded the consensus estimate of 51.1. Both the manufacturing and services sectors exceeded expectations, with the manufacturing PMI flash at 50.9, above the consensus estimate of 50; and the services PMI flash at 54.8, above the estimate of 51.3."
Whether the Federal Reserve can successfully reduce the annual inflation rate to 2% in the future will be a challenge, but the price index does not actually need to fall to 2%. It is possible that the Federal Reserve may turn to accept a slightly higher annual inflation rate and move towards a more relaxed policy in the future.
Affected by this, the Chicago Mercantile Exchange futures adjusted its expectations for rate cuts, and the market currently expects only one rate cut in 2024. Even if the Federal Reserve is more hawkish, raising interest rates is impossible.
Previous selections:
《RWA Project under BlackRock and Coinbase Investment Institutions (Potential and Opportunities)!》
“Solana: Why I’m So Confident About It!”
《The second wave of the cryptocurrency bull market is coming! 》
《SEC approves Ethereum spot ETF, BlackRock's leading RWA project narrative! 》
"With the expectation of interest rate cut coming, Bitcoin ETF has a historic breakthrough! (Weekly)"
Note: All content represents the author's personal views only, is not investment advice, and should not be construed in any way as tax, accounting, legal, business, financial or regulatory advice. Before making any investment decision, you should seek independent legal and financial advice, including advice on tax consequences.
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