Down We Go. Then Up? 🦭
Bitcoin's dull. But there are reasons to be happy about it. JPMorgan's Coinbase downgrade. "Crypto Mom" on Ethereum ETF approval. Trump vs CBDCs. Deepfake calls and crypto chatbots.
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The same old: BTC hit over $49,000 on Jan 11 and now fell below $39,000.
Erased the gains from the past two months.
On Jan. 23, the total crypto market cap fell from $1.6 trillion to $1.5 trillion, a 5.5% decline.
Altcoins also go down.
Ether, Solana, and Binance Coin all down.
Maybe its time to thank FTX once again for all this mess with the sale of 22 million shares of Grayscale’s GBTC.
Read this: Who's selling? 🪝
As everyone claims, this could be a sell-the-news event: The rise in prices before a bullish event, followed by a decline post-event.
Read this: This too shall pass🤞🏿
Bearish Analyst Views
Veteran trader Bob Loukas suggests Bitcoin’s weekly cycle chart indicates a top.
Peter Brandt notes a bearish breakout, targeting around $34,700.
Bitfinex predicts short-term targets in the $38,000 - $36,000 range and $32,000 long-term.
Mike Novogratz expects Bitcoin's volatility to decrease in about six months
BitBank analysts see the ETF approval as potentially marking a short- to mid-term peak for bitcoin's price.
CryptoQuant's target is even lower at $32,000.
The market is reacting to GBTC's continued offloading of Bitcoin holdings.
New US spot Bitcoin ETFs are somewhat counterbalancing GBTC’s exits.
Selling GBTC for USD and keeping the funds in USD is impacting Bitcoin's price.
Some of us are optimistic
The correction could be a temporary setback before an uptrend continuation.
Why we still believe in "all's well that ends well?"
There’s 4 things to note:
1. 20% Drops Becoming Less Frequent
Traditional finance defines a bear market as a 20% drop from recent highs.
This is the fourth 20% pullback in the current cycle, which is said to have started on Nov. 21, 2022.
The frequency has longer intervals between each.
Historical Cycles
The 2015-2017 cycle saw corrections every 64 days.
The 2018-2019 and 2020-2021 cycles had 20% drops every 73 days.
The current cycle averages a 20% correction every 102 days.
What does that mean? Volatility is decreasing over time, showing signs of a maturing asset.
2. Macroeconomic factors
Federal Reserve’s Interest Rate Cut: A cut in early 2024 could boost Bitcoin's attractiveness compared to traditional assets, considering its fixed supply.
Regulation Over Bans: Jurisdictions like Hong Kong and Japan are providing stablecoin guidance; the EU is advancing the Markets in Crypto Assets Regulation (MiCA).
3. Halving Cycle
The 2024 halving event, expected in April, could impact mining profitability, market supply dynamics and BTC price.
Read: Bitcoin's 2024 Bash 🎉
4. CoinShares’ Analysis
Inflow Prediction: A 10% inflow of current assets under management (AUM), estimated at around $3 billion, could push the BTC price near $60,000.
A blend of macroeconomic factors, regulatory developments, and intrinsic market dynamics supports Bitcoin’s potential rise in 2024.
TTD Blockquote🎙️
JPMorgan analysts.
Coinbase stock rating - "underweight."
JPMorgan analysts have revised their script for Coinbase.
They have downgraded Coinbase from neutral to underweight.
Why the Sudden Change? It seems the much-hyped bitcoin ETFs, which were supposed to be the blockbuster hit of the season, turned out to be more of a B-movie.
What happened to the market: This too shall pass🤞🏿
Despite Coinbase being the leading man in the U.S. crypto exchange scene, JPMorgan is worried this show won’t go on for long.
“While we continue to see Coinbase as the dominant U.S. exchange in the cryptoecosystem and a leader in cryptocurrency trading and investing globally, we think the catalyst in Bitcoin ETFs that has pushed the ecosystem out of its winter will disappoint market participants,” said JPMorgan.
Despite the downgrade, JPMorgan maintains an $80 price target for Coinbase, which currently trades around $122.
Performance: Coinbase stock has risen nearly 129% over the past year but fell 28% in the past month.
First-week net flows of $1.2 billion for bitcoin ETFs considered disappointing compared to Gold ETF's performance.
“We have benchmarked bitcoin ETFs to the Gold ETF GLD when it launched to similar market enthusiasm in 2004. Despite the enthusiasm, GLD raised $3.5 [billion] in its first year after launch.”
Where’s ETF?🚨
Spot Bitcoin ETFs, including those offered by BlackRock and Fidelity, have reached a total of $12 B in assets as traders are attracted by their low fees👇
TTD Crypto Mom 👩🏻
Now time to talk about Ethereum ETFs.
SEC Commissioner Hester Peirce, known as "Crypto Mom," believes a lawsuit is not necessary for the SEC to approve spot Ether (ETH) ETFs.
Peirce refers to the Grayscale court ruling, which led to the approval of spot Bitcoin ETFs, suggesting that the SEC should learn from this experience without needing court intervention for Ether ETFs.
Application Evaluation: Each ETF application has unique facts and circumstances. The SEC's job includes ensuring that disclosures align with how the product functions.
Decision Deadlines:
What are the chances?
Bloomberg's Eric Balchunas gives a 70% chance of approval by May.
Mark Yusko of Morgan Creek Capital sees a less than 50% chance for approval.
JPMorgan says the same - 50% chance.
SEC Chair Gary Gensler cautions that approval of Bitcoin ETFs doesn't guarantee the same for other crypto assets.
Fox reporter Eleanor Terrett has reported that there are differing opinions on whether the Ethereum spot ETF will be approved.
TTD Trump👨🏻🦰
Donald Trump, former US President and current presidential candidate, reiterated his opposition to CBDCs during a rally in Laconia, New Hampshire.
Trump lavishly credited Vivek Ramaswamy, the ex-Republican presidential contender and the brains behind a crypto-centric campaign, for enlightening him on the CBDC drama.
Trump first mentioned his stance against CBDCs in Portsmouth, New Hampshire, emphasizing that he would never allow their creation.
Ramaswamy’s Influence: Ramaswamy, known for having a crypto framework in his presidential program, influenced Trump's renewed focus on the topic. Despite initial personal reservations, Trump acknowledged Ramaswamy's impact after defeating him.
TTD AI📍
AI Deepfake in New Hampshire Elections
Incident: AI deepfake technology was used to generate robo-calls in New Hampshire, featuring a voice resembling President Joe Biden.
Objective: The calls urged voters not to participate in the primary, suggesting an attempt to meddle in the 2024 presidential election.
Response: The state's attorney general's office condemned the calls as misinformation. Former President Trump's spokesperson denied any involvement by Trump or his campaign.
Activision's AI Moderation Tool, ToxMod
Functionality: ToxMod can identify disruptive comments in 14 languages in Call of Duty games.
Impact: Since its implementation in August, the tool has penalised over 2 million accounts for disruptive behavior.
Underreporting Issue: Activision noted that only 20% of disruptive behaviors are reported by users.
Pontem's AI-Powered Crypto Chatbot
Product Launch: Pontem, a Web3 product development startup, is introducing an AI chatbot to provide real-time information on crypto-related topics.
Features: The chatbot will be compatible with MetaMask, X, Facebook, Gmail, and major Aptos wallets.
Funding and Focus: Pontem has secured funding from crypto-centric investors. Their recent $6 million funding brings the total to $10.5 million.
TTD Surfer 🏄
Canada has ruled that a law allowing the government to freeze funds and cryptocurrencies donated to protesting truckers was unconstitutional.
Core Scientific is set to resume trading on Nasdaq after successfully reorganising following its bankruptcy filing in 2022.
Email marketing firm MailerLite has confirmed that hackers gained access to accounts of large Web3 companies to carry out phishing email scams.
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