The trend of Bitcoin last week took a turn for the worse. When Grayscale won the SEC lawsuit and the court asked the SEC to review the Bitcoin spot ETF, Bitcoin rebounded to $27,500, rekindling the atmosphere of the market rebound. The probability of the spot ETF is as high as 95%, but then the SEC announced the postponement of the license date of the 7 bitcoin spot ETFs, clearly wanting to veto the listing of the ETF through delaying tactics, and the price of the bitcoin market gradually fell to the range of 25,900 US dollars and returned to the market. to the origin.
The current situation is still not very good. Although the price of Bitcoin once rushed up, but the strength is not very strong, only about 5%. It can be judged that the market buying is not very strong, and the decline is hard and fast. Within a few days, the cryptocurrency has fallen into the predicament of low liquidity.
But it is worth noting that Robinhood has been exposed as a cryptocurrency whale one after another. It was first revealed by Arkham Intelligence that it held about 120,000 BTC, worth about $3 billion, becoming the third largest Bitcoin holder. Later, it was also alleged that Robinhood is also the fifth largest holder of ETH, equivalent to approximately US$2.5 billion, while Robinhood's stock market value is only US$10 billion.
We think it’s good to read this news. The trading volume of Robinhood’s cryptocurrency is only tens of millions of dollars a day, which is too small compared to Coinbase and Binance, which can easily reach tens of billions of dollars in a single day. The possibility of hosting the top few large cryptocurrency positions is very low. Assuming that investors really hold such a large amount of cryptocurrency, if there is no transaction demand, they still tend to hold it in their own cold wallets, and will not put it on the exchange. Risk of Misappropriation.
This move is more like Arkham wanting to speculate on Robinhood's stock price. Robinhood's stock price, which has been weak for half a year, rose by 5% last week. In fact, the intention is to heat up the stock price, not the cryptocurrency itself.
Furthermore, Coinbase has listed the Paypal stable currency for trading. At present, more and more exchanges are beginning to support PaypalUSD (PYUSD), including Crypto.com , BingX, Kraken and other exchanges. The circulation has reached about 44 million US dollars. We see that PaypalUSD It has the potential to replace BUSD and become the second largest compliant stable currency, and expand the user market in the United States together with USDC.
In addition to the changes in the encryption industry itself, last week the global financial market also continued to revise interest rate expectations. In particular, the United States released two indicative employment reports last week, pointing to the fact that the tightness of the U.S. job market has eased, and the market has also Going further in the direction of easing inflation and cooling the job market, but the impact of this is only a "suspension of interest rate hikes" and will not return to the past era of ultra-low interest rates. Will interest rates have a chance to reverse? ?
A. On August 29th, Robinhood was revealed to own $3 billion in Bitcoin, making it the third largest whale
The blockchain analysis company Arkham Intelligence has confirmed through the analysis of the chain database that several wallet addresses and cryptocurrencies held are owned by the online broker Robinhood, and one of the wallets has a total value of more than 3 billion US dollars, which makes Robinhood a The third largest Bitcoin whale in the world, second only to Binance and Bitfinex, the company has not yet confirmed this analysis. We cannot really confirm that the whale is Robinhood, because a single wallet stores too large a cryptocurrency Not normal for institutions that need to diversify their deposit risks.
In the past few months, there have been many discussions and rumors about this wallet address in the community. They are all speculating on who this Bitcoin whale is. This wallet address has also successively transferred a total of 118,300 BTC from multiple wallets to a single wallet address. These transactions It first occurred in March this year, and the largest transfer occurred on July 14. It is strange that the Robinhood trading platform has a low bitcoin transaction volume, but holds such a high bitcoin asset, which is unreasonable.
Robinhood’s cryptocurrency trading volume in the second quarter of this year was only $31 million. In comparison, it is incredible to have such a large amount of Bitcoin assets, considering that the company has a market capitalization of only $9.6 billion but holds $3 billion in assets. Bitcoin, even customer assets do not meet the low trading volume, does that mean its stock price is seriously undervalued? Or the analysis on the Internet is actually wrong, and we tend to think that the analysis results of Arkham Intelligence may be wrong.
B. On August 31, the number of new jobs reported by ADP in the United States was far lower than market expectations
The ADP report released by the U.S. private sector showed that the number of U.S. jobs increased by only 177,000 in August. Compared with the increase of 371,000 services in July, the number of new market jobs was revised down by 50%, lower than market expectations. 200,000 people, indicating that the tightening situation in the U.S. job market has improved. The pace of private job openings and the growth rate of workers finding jobs are slowing down. This gives the Fed a big reason to stop raising interest rates in September. message.
On the other hand, the official July JOLTS report of the U.S. Department of Labor was released on Tuesday, indicating that there were 338,000 fewer job vacancies in July than in June. This information revealed that the number of job vacancies in the United States is decreasing. It also pointed out that The job market is cooling, and the voluntary turnover rate has also dropped to 2.3%, indicating that Americans are no longer as confident as in the past about finding their next job. However, the current unemployment rate in the United States is still at a historical low, and it can only be said that growth has increased. Slowly, there is still a long way to go before recession.
But such market news is enough to cheer up the market. There are currently growing calls for the Fed to suspend interest rate hikes in September. 88% of interest rate futures are betting on a pause in interest rate hikes. This has inspired a strong rebound in U.S. stocks recently, coupled with many risk aversions in the past month. Funds bet on a fall in U.S. stocks and shorted them, so short-side covering became more intense. The crypto market also benefited from GrayScale's victory and rebounded slightly, with Bitcoin rising from $26,000 to $27,000.
C. On September 01, the SEC postponed the approval date of 7 bitcoin spot ETFs in one go
Although the U.S. Securities and Exchange Commission (SEC) lost the lawsuit against GrayScale and was considered by the market to be likely to list a Bitcoin spot ETF, the regulator still retained the right to delay the approval of the Bitcoin spot ETF. This time it was delayed. The newly approved fund companies include Fidelity, Invesco, Valkyrie, VanEck, Bitwise and WisdomTree. The license date will be postponed for an additional 45 days from August 31, and the next decision must wait until October.
This resolution has affected the sentiment of the cryptocurrency market to some extent. The recent rebound was due to Grayscale’s victory in the lawsuit, which made the market think of Bitcoin spot ETF. The court required the SEC to re-examine the conversion of Grayscale Bitcoin Fund into a freely tradable ETF, but the SEC subsequently acted harshly. He was slapped in the face and planned to adopt delaying tactics to continue to wear down the fund company's patience until the applicant withdrew his application and Bitcoin fell back from US$27,000 to US$25,900.
Judging from the SEC's immediate announcement to postpone the review date, they are still opposed to the opening of Bitcoin spot ETFs. If the market wants to bet on this topic in the near future, it may have to be more patient. At this stage, we need to see supervision Institutional approval is unlikely. Bloomberg analysts previously bet on a 95% chance that spot ETFs would be listed before the end of 2024. Now this chance may need to be significantly readjusted.
Job market showing signs of cooling, but rate reversal unlikely
The U.S. Department of Commerce released its latest August job market report last Friday, which pointed out that the U.S. added a total of 187,000 non-farm jobs last month. The number of new jobs in July was also 187,000, and the unemployment rate also rose. to 3.8%, much higher than the 3.4% in July, ending the crazy record of the U.S. unemployment rate hitting new lows. This is due to the increase in the labor participation rate and the slowdown in U.S. wages. The more significance of this report is that the U.S. unemployment rate has continued to hit new lows. The job market is finally starting to cool off.
Looking further, health care is the industry that has contributed the most jobs recently, with a total of 71,000 new jobs, followed by the hotel and leisure industry with 40,000 jobs, and the information industry has lost 15,000 jobs, as well as transportation and warehousing. The loss of 34,000 workers is in line with our observation of the current slump in the technology industry. The U.S. economy is still good now because the recovery of leisure and tourism continues, spurring employment growth, but high-level white-collar jobs are still declining.
Compared with the number of new job openings of more than 300,000 in the past few months, we can confirm that U.S. employment is indeed slowly cooling down. As time enters autumn and winter, the temperature in the northern United States is no longer suitable for tourism, and the job market is expected to decline. Further cooling down, so the Fed will stop raising interest rates in September more and more voices, the current interest rate futures have about 90% of positions betting that the Fed will stop raising interest rates.
At present, the inflation situation has been almost clear since this year. Even if the Fed stops raising interest rates in September, it will look at economic data to judge whether to further raise interest rates. Assuming there are not too many surprises, the interest rate cut will at least wait until the third day of next year. After the second quarter, as long as the Fed sees employment cooling and inflation slowing down for more than three consecutive periods, the benchmark interest rate is likely to drop from the "restrictive interest rate" to the current yield of 10-year U.S. debt, which is about 4.2%. Although the interest rate is relatively It was still high in the past, but it can strike a balance between suppressing inflation and economic recession, which should be an ideal interest rate level at present.
Assuming that the mid- to long-term situation is to maintain an interest rate of around 4.2%, it will be more difficult if the price of cryptocurrency continues to rise. The interest rate in this range is still a high-level range compared with 2017 to 2023. After the explosive growth of cryptocurrency, it will also be I have never experienced a long-term interest rate of 4%. Once investors demand a 4% interest rate return per year, it will be more difficult for the price of risky assets to rise. Especially in the crypto market, which currently lacks external capital inflows, it will be necessary to push the market back in the short term. Past bull markets have not been easy.
If there is going to be a major reversal of interest rate cuts, the U.S. economy must have major problems to force the Fed to cut interest rates quickly, just like the 2020 epidemic. The U.S. economy is currently stable, and it is actually quite difficult for the Fed to predict continuous interest rate cuts like analysts do. , long-term bonds have gradually adjusted their expected declines, causing yields to rise, which means that the era of ultra-low interest rates has passed. Under the bad environment, we have also seen that even if Grayscale wins the lawsuit, it does not make the cryptocurrency market rise wildly. It rose by 5%, but then the news that the SEC postponed the bitcoin spot ETF immediately gave up all the gains of the cryptocurrency.
This means that market sentiment is still tending to be pessimistic. Funds are indeed not in the cryptocurrency market now. They are all going to the US stock market to chase AI-related concept stocks. However, investment always has cycles, and market funds are also taking turns to flow into various themes. From 2017 to 2021, it will be In the era of cryptocurrency, Web3 and NFT, after 2022, it will be AI concept stocks. Waiting for investors to get tired of the AI theme, when there is innovation in the encryption industry, funds are likely to return to the market again.
It is almost impossible to predict when innovation will appear in the market. In addition to the recent SEC approval of the listing of Bitcoin spot ETFs, we can only wait for more cryptocurrency market topics to emerge. The most obvious one is inevitably the Bitcoin halving next year. Although statistical studies have pointed out that halving has no impact on the price of Bitcoin, it is always a topic that can boost market confidence. With the expected assumption of an interest rate cut in 2024 and the market being dull for too long, there is still a chance to open a red market. , In addition, the cryptocurrency industry has a strong momentum to stimulate innovation in the industry. We are still optimistic about the long-term development of the encryption or your market.
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[MICA RESEARCH] High interest rates will last longer, and liquidity problems in the cryptocurrency market will worsen
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