The Federal Reserve has again announced a 25 basis point rate cut, lowering the federal funds rate target range to 4.5%-4.75%, in line with market expectations, marking the continuation of this round of loose policies. Notably, this is already the second rate cut by the Federal Reserve this year; the last one was on September 18, when the Fed cut rates by 50 basis points, officially initiating this rate-cutting cycle.
This interest rate cut is a significant boon for the market, especially in the current environment of economic uncertainty, as low rates can alleviate borrowing cost pressures for businesses and consumers, thereby stimulating economic activity. This is also a positive signal for the cryptocurrency market, including Bitcoin. As the yield on fiat currencies declines, more investors may choose to shift their funds towards high-risk, high-reward assets, highlighting Bitcoin's role as 'digital gold.' The Federal Reserve's ongoing loose monetary policy could bring more incremental funds into the crypto market. In the near term, the market's expectations for the liquidity brought by interest rate cuts will further support Bitcoin's upward trend.
Bitcoin's price briefly surged to $76,849.99, setting a new record high, and is currently quoted at $75,966, with a 24-hour increase of 1.19%. Recent price fluctuations have been significant, and market sentiment is quite bullish. Notably, BlackRock's Bitcoin ETF achieved its largest single-day inflow since its launch on November 7, with funds reaching $1.11692 billion, demonstrating strong demand from institutional investors for Bitcoin. This is not only a positive market signal but also indicates that an increasing number of institutions view Bitcoin as a long-term potential asset allocation tool.
Such large-scale capital inflows undoubtedly intensify bullish sentiment in the market. With the continuous influx of funds, Bitcoin's price is likely to continue oscillating at high levels and may even further challenge higher price points. Historical data shows that the top days for inflows into BlackRock's Bitcoin ETF were October 30 with $872 million, March 12 with $849 million, and March 5 with $788 million; this trend indicates that investor enthusiasm for Bitcoin is unabated. The continued increase in institutional investment not only injects sufficient liquidity into the Bitcoin market but also solidifies its position as 'digital gold.' Amidst heightened global economic uncertainty, Bitcoin is becoming a preferred asset allocation for risk hedging, and it is expected that more institutions will increase their Bitcoin holdings in the future.
MicroStrategy's investment in Bitcoin is undoubtedly a classic case that incentivizes the market. As Bitcoin's price breaks through $76,000, the company's unrealized gains have reached about $9.28 billion, representing a massive return. As of September 19, 2024, MicroStrategy holds a total of 252,220 Bitcoins, with a total cost of about $9.9 billion and an average purchase price of $39,266. Simply put, Bitcoin's price is now nearly double MicroStrategy's average purchase price, resulting in an astonishing investment return of 93.7%.
MicroStrategy's significant success undoubtedly sends an important signal to the market: amidst increasing uncertainty in the global macroeconomic environment and rising risks of dollar devaluation, Bitcoin is being increasingly recognized by institutions as a tool for hedging against inflation and preserving value. MicroStrategy's CEO Michael Saylor's unwavering confidence in Bitcoin not only serves as a reference for other companies but may also drive more companies to follow suit. From a market trend perspective, Bitcoin's long-term potential remains optimistic, especially with more institutions entering the space and the strengthening expectations surrounding ETFs. MicroStrategy's unrealized gains set an example for investors, proving that Bitcoin's asset value can indeed provide long-term returns. For investors looking to position themselves in Bitcoin, MicroStrategy's success will bring stronger confidence.
CoinShares' latest report points out that if the Trump administration passes the (Bitcoin bill), it will bring significant benefits to the cryptocurrency industry. The core of this proposal is to establish Bitcoin as a 'strategic reserve asset' and suggests that the U.S. government acquire 5% of the total supply of Bitcoin. Currently, the total supply limit of Bitcoin is 21 million, meaning 5% is about 1.05 million coins. If this proposal comes to fruition, the U.S. government will hold over 1 million Bitcoins, undoubtedly greatly enhancing Bitcoin's legitimacy and status.
In the current international financial environment, if the U.S. takes the lead in incorporating Bitcoin into its national reserves, it will further solidify its financial leadership position. This is similar to the logic of gold reserves, as Bitcoin is expected to become an inflation-resistant store of value. Meanwhile, the Trump administration's attitude towards the SEC is a highlight. Trump has consistently criticized current SEC Chairman Gary Gensler and has stated that if re-elected, he will adjust the leadership to achieve a more open cryptocurrency regulatory policy. This change, compared to the current government's conservative stance, will undoubtedly benefit the development of the entire crypto market. From a market perspective, if the (Bitcoin bill) is smoothly passed, it will undoubtedly have a huge impact on Bitcoin's price. Both institutional and retail investors will see a significant increase in confidence towards Bitcoin upon seeing government recognition. Bitcoin may usher in a new wave of price increases, and other countries may follow suit under the influence of the U.S. This series of policy potential impacts could lead Bitcoin into a new era of 'digital gold.'
Yesterday, the U.S. spot Ethereum ETF saw a net inflow of 29,300 coins, valued at $79.7 million.
Yesterday, the U.S. spot Bitcoin ETF saw a net inflow of 18,000 coins, valued at $1.359 billion.
BTC: From yesterday's daily chart, it can be seen that Bitcoin formed a spinning top, indicating a slight weakening of bullish strength in the short term, but the overall trend remains upwards. From a technical perspective, the current 5-day and 10-day moving averages of Bitcoin are still rising, indicating that bullish sentiment in the market has not faded, and prices are expected to continue oscillating upwards along the moving averages. Combined with the current low long-short ratio, this suggests that bullish positions are relatively concentrated, and major funds have significant control over the market.
Additionally, the inflow of funds into ETFs has reached a historical high, reflecting strong demand from institutional investors for Bitcoin, while also demonstrating market confidence in future price increases. Coupled with macro factors such as interest rate cuts, even if there is a slight pullback in the short term, it is a normal digestion of the previous gains. Overall, the medium to long-term direction for Bitcoin remains optimistic.
ETH: Ethereum closed with a bullish candle yesterday, and the RSI indicator shows signs of overbought conditions. A slight pullback may occur in the short term, but it will not affect the overall trend; the market is likely to continue moving upwards.
Altcoins: From the trend of altcoins, many are still at relatively low levels, making it a good time for gradual positioning. Although we haven't yet entered the so-called 'altcoin season' and funds have not yet surged to the most frenzied phase, patiently waiting may bring greater opportunities. As Bitcoin's price fluctuates, many altcoins are expected to follow suit, potentially ushering in an upward trend, making this phase suitable for players optimistic about altcoins to consider appropriate accumulation.
Today's Fear and Greed Index: 75 (Greed)
