Bitcoin successfully broke through the key price of $65,000 this week, driving the entire market from doubting the future of cryptocurrency to a rather optimistic attitude. The latest Bitcoin outlook reports issued by investment institutions have also revised the Bitcoin price upward to $70,000. Excluding those institutional analysts who have exaggerated the price of Bitcoin, it is generally consistent with the reasonable price we expected in the past six months.

In addition to Bitcoin, Ethereum also finally recovered, with the price returning to $2,600. This was mainly due to the abundant inflow of funds from stablecoins in the currency circle. Investors began to re-purchase Ethereum and bought more meme coins as Reallocation of investment positions. In the easing environment of interest rate cuts, Ethereum, meme coins and DeFi tokens are the three cryptocurrencies with the most alarming growth rates. Among them, Ethereum has a more defensive function. As for whether NFT can return to glory, We may have to wait for the possibility that the United States will once again enter an ultra-low interest rate environment of zero interest rates to significantly increase.

Focusing on the next easing policy, retail investors and institutional investors are actively planning. According to Farside statistics, the Bitcoin spot ETF has experienced five consecutive days of net inflows in the past week, amounting to US$1 billion. This is after the weak performance in the past quarter. The turning point represents the U.S. financial market beginning to return to the cryptocurrency market, betting on the Fed's subsequent easing.

The market speculation atmosphere after the Fed cut interest rates has also begun to appear. The current capital inflow in the crypto market is very optimistic. Meme coins have experienced staggering increases this week, such as Shiba Inu, Pepe and other representative animal meme coins, with weekly increases of 46% respectively. % and 32%. Other small and medium-sized meme coins have also outperformed the market. Most of these capital dynamics come from within the currency circle, rather than external ETF capital inflows, indicating that crypto market traders are optimistic about the next capital momentum.

The encryption industry has not yet made significant technological progress in the short term. Since most of the current innovations are concentrated in the DeFi environment, numerous airdrop and liquidity staking projects are still being launched. However, there has not been a craze like in 2021. The main reason is still due to In the current restrictive interest rate environment, we believe that the Fed's continued interest rate cuts will help the entire industry gradually recover, and we can expect the DeFi series of tokens to rise faster than Bitcoin and other markets.

Sources: MICA RESEARCH

A. On September 23, Coinbase announced that it would launch cbBTC on the Solana platform

Coinbase announced at the Breakpoint event that it will launch "cbBTC" on the Solana blockchain platform, which will tokenize Bitcoin to facilitate transactions on another blockchain network to enjoy faster transaction speeds and lower handling fees. Behind the scenes, cbBTC is 100% guaranteed by Coinbase. Coinbase said that cbBTC, which has been launched on the Ethereum and Layer-2 Base platforms, has been welcomed.

The exact release date of cbBTC on the Solana platform has not yet been determined, but according to CryptoQuant data, cbBTC became the third most popular Bitcoin token product on the market in just seven days after its release on Ethereum, surpassing competition such as HBTC and RENBTC. Counterparts, DeFi projects have also begun to introduce cbBTC as an option for liquidity staking, thereby expanding their product options.

For example, the team of the Sky lending platform proposed cbBTC as a substitute for WBTC and removed WBTC from the ecosystem, expressing their doubts about the reliability of the reserves behind WBTC. We estimate that more DeFi projects will adopt cbBTC in the future. Although it is neither decentralized nor transparent, with the credit guarantee of Coinbase, it can still continue to expand its market share in the DeFi ecosystem.

B. September 24th He Jinli publicly discussed policies related to the encryption industry for the first time

Democratic presidential candidate Kamala Harris pledged to boost investment in the cryptocurrency industry at a September 22 fundraiser in New York City as one of her latest strategies to attract voters, expressing support for artificial intelligence as she laid out her economic agenda ( AI) and encryption technology innovation, and emphasized that regulation will be aimed at protecting consumers and investors. She mentioned that she would plan to convene small and medium-sized enterprise founders, innovators and large companies to promote the improvement of U.S. competitiveness.

This is the first time that Harris has spoken publicly about the Democratic Party's policy on cryptocurrency. She will encourage AI and digital asset technology to be included in her economic policy, but emphasizes that the main purpose is to protect consumers and investors. She is expected to unveil a new set of economic policies this week, a move that appears to be different from that of current President Joe Biden, who has taken a tougher stance on the crypto industry, with the regulator SEC targeting many crypto companies and launching multiple lawsuits. litigation.

However, a policy adviser to He Jinli also said that although she hopes to promote the development of crypto assets, she is still concerned about strengthening supervision and industry protection. The overall argument is not too different from the current line of the Biden administration. Compared with her rival Trump, she fully supports it. Their attitudes are very different. Even if the Democratic Party is elected, the suppression of the cryptocurrency industry may continue. Uniswap founder Hayden Adams pointed out that Biden is not friendly to cryptocurrency, but He Jinli’s positive statement has made progress than before. At present, This new information has not yet been able to influence the market upward, but it is expected to be able to offset the negative impact of Trump's continued decline in his victory rate to some extent in the future.

C. September 27: The U.S. economic data is eye-catching, and Bitcoin breaks through $65,000

The U.S. Bureau of Economic Analysis yesterday reported a final GDP growth rate of 3% for the second quarter, in line with the previous revision and higher than economists' forecast of 2.9% and better than the 1.6% in the first quarter. In addition, the number of people filing for initial unemployment benefits fell to 218,000 last week, a decrease of 4,000 from the previous week, a four-month low, and lower than market expectations of 223,000, indicating that the U.S. economy remains robust. There was no sharp recession that investors had feared.

Although the growth of the job market has slowed recently, the number of people applying for unemployment benefits has not grown significantly and has remained at a low level. This is because U.S. citizens who are eligible to apply for unemployment benefits have not lost their jobs. The slowdown in the job market is more reflected in immigration. Category of jobs, but at least it can be confirmed that the U.S. economy is not in recession, and the employment situation is still good, or not as bad as imagined due to the high interest rate environment.

Cryptocurrencies continue to receive capital injections. Bitcoin has broken through the key price of $65,000 that we mentioned before, and Ethereum has also returned to stand at $2,600. With the Fed's subsequent interest rate cut cycle, it is expected to drop by another 2 points to bring interest rates back. 4.50%, crypto assets are expected to continue rising.

Key to supporting easing policy: falling oil prices will be the focus

As for why investors are now so convinced that the Fed will continue to implement easing policies? The reason is that the current international oil price is affected by the decline in Chinese demand and OPEC's continued increase in production. The price of crude oil continues to fall, with the lowest even reaching 70 US dollars. It has dropped nearly 40% from the high of 120 US dollars in 2022. Energy prices have fallen, and price and cost pressures have Naturally, it will decline, and we believe this is one of the reasons why the Fed took the step of cutting interest rates by two percentage points.

On the other hand, China's economy continues to be weak, forcing the People's Bank of China to announce a series of easing policies this week, including lowering the deposit reserve ratio by 0.5%. This is another reduction since February this year, which will release huge amounts of funds into the market and Improve the lending capabilities of commercial banks. It was also revealed that it may be cut by another 0.25% to 0.5% this year. At the same time, the People's Bank of China also lowered the interest rate for providing short-term funds to commercial banks.

In terms of real estate, China announced that it will relax restrictions on down payments for home purchases. These measures point to the weakness of the Chinese economy and the need for more stimulus policies to encourage public consumption and corporate investment. Under the premise of weak demand, energy demand will naturally decline, and international oil prices will also Suppressed, after talking about the demand side, oil on the supply side is also facing pressure from OPEC to increase production. The media reported that Saudi Arabia will prepare to increase production and prepare to regain oil market share through price wars. This means that oil price supply should continue to increase in the short term. .

Finally, there is the PCE price index released this week. Data released by the U.S. Department of Commerce showed that the annual growth rate of the personal consumption expenditures (PCE) price index in August was 2.2%, lower than market expectations of 2.3%. The Federal Reserve (Fed) prefers The core PCE (excluding energy and food) growth rate was 0.1% monthly, lower than the 0.2% expected.

At the same time, the monthly growth rate of personal expenditures in August was 0.2%, lower than the expected 0.3% and the previous value of 0.5%; the monthly growth rate of personal income also fell to 0.2% from 0.3% in July.

Data shows that the U.S. economic growth is slowing down, and market expectations for interest rate cuts have increased. All this information points to the continued easing of U.S. policy. The current Bitcoin price has reached $65,000, and we believe it will reach the previously estimated level this year. The price of US$70,000 is a reasonable price. If the economic data comes out in the future, the price of Bitcoin may rise even higher.

Review of last week [MICA RESEARCH] The interest rate cut was a positive assist, and the price of Bitcoin once exceeded $64,000

Statement: The article only represents the author's personal views and opinions, and does not represent the objective views and positions of the blockchain. All contents and opinions are for reference only and do not constitute investment advice. Investors should make their own decisions and transactions, and the author and Blockchain Client will not be held responsible for any direct or indirect losses caused by investors' transactions.

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〈[MICA RESEARCH] The U.S. economy continues to prosper, and loose policies will help Bitcoin rise> This article was first published on "Block Guest".