On Thursday, the Nasdaq fell nearly 2% and the S&P 500 fell 0.88%. In contrast, the Russell 2000 small-cap index rose 3.2%, its best performance relative to the S&P 500 since March 2020. For months, investors have seen few options other than a few winners in the U.S. stock market, but if the Fed moves to lower interest rates, they suddenly have a lot more options and the market begins to rotate. On Friday, the Nasdaq opened up 1.1% and the S&P 500 rose 1%.

Back to the topic:

Fed's Powell testified before the U.S. House Financial Services Committee, and Congressman Josh Gottheimer asked him about the U.S. Securities and Exchange Commission's Staff Accounting Bulletin (SAB) 121. The bulletin requires banks to include custody digital assets on their balance sheets, which greatly increases the cost of providing digital asset custody services. Gottheimer cited Powell's previous statement: Custodial assets are not on the balance sheet and have always been so. Powell generally confirmed this position, but did not comment on the SEC's policy, saying that this is the SEC's purview. At the nomination hearing of the U.S. Senate Banking Committee on Thursday, SEC Commissioner Caroline Crenshaw said that rampant fraud in the cryptocurrency market led her to be reluctant to approve the BTC ETF earlier this year because there was serious fraud and opacity in the global underlying spot market. ETH ETF issuers are waiting for the U.S. Securities and Exchange Commission (SEC) to provide details on the final documents. The SEC has provided multiple rounds of comments for issuers to revise the form, each of which takes several weeks, and issuers are beginning to hope that the process may be nearing its end. On July 12, the Fear and Greed Index was 25, and the level turned to extreme fear. Eric Balchunas, senior ETF analyst at Bloomberg, said that the final deadline for the Solana ETF is mid-March 2025, and the most important date is November. FOX Business reporter Eleanor Terret reported that CFTC Director Behnam said that an Illinois court confirmed that BTC and ETH are digital commodities under the Commodity Exchange Act, and 70-80% of the crypto market is non-securities. Capriole Investment's Cryptocurrency Speculation Index shows that the speculative excesses that prevailed in the first quarter have dissipated, indicating that BTC is likely to see bullish price movements again. The speculation index, which measures the percentage of altcoins with a 90-day return higher than BTC, has stabilized below 10%, a sharp drop from the high of nearly 60% in January.

QCP Capital said that the CPI data attracted everyone's attention, and the optimism has not yet been digested by the cryptocurrency market. The German government transferred 10,000 BTC to exchanges and market makers yesterday. The address now holds only 15,000 BTC, while the initial 50,000 BTC in mid-June indicated that supply pressure may have eased. With the reduction in supply, the weakening CPI data may be a catalyst for breaking through this range, especially the spot ETH ETF trading to be launched next week, which is expected to present risk-return opportunities. On July 12, the US spot BTC ETF had a net inflow of US$79 million on July 11, with inflows for 5 consecutive days, totaling nearly US$900 million. Fidelity's spot BTC ETF holdings exceeded 180,000 BTC, reaching about 181,221 BTC, worth about US$10.5 billion. On July 12, the address marked as "德" transferred 5,248.2 BTC, leaving only 3,846 BTC on the address. At the current rate, it may sell all BTC in the next 1-2 days. JPMorgan Chase (JPM) said in a research report that cryptocurrency liquidations should weaken this month, and the market is expected to rebound from August. The bank said that the decline in reserves could be the result of creditors of Gemini or MtGox liquidating BTC, or the German government selling BTC. Bitwise CIO Matt Hougan said that all the current selling pressure adverse factors are one-time sales, causing a short-term liquidity shock. The seasonal period of low liquidity in cryptocurrencies is coming to an end. Spot BTC ETF inflows, halving, spot ETH ETFs, and the prospect of a Fed rate cut have created a better long-term environment. Institutions such as BlackRock are increasingly involved in this field. The second half of the year may easily push BTC to $100,000 and push ETH to a record high. On July 10, Justin Sun's address once again increased his holdings by 1,621 ETH. The CryptyQuant report said that BTC whales are increasing their holdings of BTC at a rate of 6.3% per month, the fastest rate since April 2023. BTC long-term holders have accumulated 85,000 BTC in the past 30 days. Glassnode reported that BTC recorded its deepest drop in the current cycle, more than 26% below its high. Compared with past cycles, the retracement is still historically shallow. The price contraction has caused a large number of short-term holders to fall into unrealized losses. More than 2.8 million BTC are now at a loss.

On Thursday, the annual rate of US CPI was 3%, lower than the expected value of 3.1%; the core CPI was 3.3%, lower than the expected value of 3.4%; the monthly rate of CPI was negative -0.1%. After the data was released, the probability of the Federal Reserve's interest rate cut in September increased, and the "Seven Big Tech Companies" in the US stock market fell. As the expectations of the Federal Reserve's interest rate cut increased, traders with more options began to withdraw from the recent strong performance of technology giants. For several months, investors have seen almost no other options except for a few winners in the US stock market, but if the Federal Reserve takes action to lower interest rates, they suddenly have a lot more options. At the close of Thursday, the Nasdaq fell nearly 2% and the S&P 500 fell 0.88%. In contrast, the Russell 2000 small-cap stock index rose 3.2%, the best performance since March 2020 compared to the S&P 500, and analysts believe that the market has begun to rotate. On Friday, the Nasdaq opened up 1.1% and the S&P 500 rose 1%. Fed's Goolsbee said: The June inflation report is very good, and one or a series of interest rate cuts can be considered. Fed's Daly: I am more convinced that it is better to relax monetary policy sooner rather than later, and some policy adjustments may be necessary. At present, the probability of interest rates remaining unchanged by September is only 7.3%, the probability of a cumulative interest rate cut of 25 basis points is 84.6%, and the probability of a cumulative interest rate cut of 50 basis points is 8.1%. The market is close to a clear card, and the addresses of De and MtGox are openly selling and selling pressure continues; US inflation is falling, and the Federal Reserve is close to a clear interest rate cut. US spot ETFs have increased their holdings for 5 consecutive trading days; the address marked as "De" is expected to take 1-2 trading days to end the selling, and MtGox has no clear time. The positive impact of interest rate cuts is dominant, and the negative impact of selling is an episode. The selling is over, and this round of bottoming is completed. After all, the S&P 500 index, which has risen without a brain, has begun to rotate to the Russell 2000 small-cap index. #美国6月CPI大幅降温 #美联储何时降息？ #美国大选如何影响加密产业？