Bitcoin
Bitcoin Awaits Guidance from US Inflation Data and Bond Market
With the oversupply from the state of Saxony in Germany almost cleanThe release of the US consumer price index (CPI) report on Thursday will be key in determining bitcoin (BTC) market trajectory.
Data due at 12:30 UTC (8:30 ET) is expected to show the cost of living in the world’s largest economy rose 0.1% month-over-month in June after remaining flat in May, leading to a 3.1% year-over-year increase, according to economists surveyed by Dow Jones. Core CPI, which excludes more volatile food and energy prices, is expected to have increased 0.2% from May and 3.4% since June last year.
If the actual number matches estimates, it would confirm continued progress toward the Federal Reserve’s 2% inflation target and set the stage for the bank to begin its long-awaited rate-cutting cycle this year.
Increased prospects of rate cuts will likely bode well for risk assets including bitcoin, helping the leading cryptocurrency extend its price recovery from July 5 lows around $53,500. CoinDesk Data show the recovery has stalled, with buyers struggling to establish themselves above the $59,000 mark.
“CPI data will be closely watched, with markets expected to react significantly to this release. Analysts’ bullish outlook for late 2024 and 2025 is contingent on the FOMC cutting policy rates, as lower rates typically increase liquidity, driving investors into ‘longer tail’ assets like cryptocurrencies,” algorithmic trading firm Wintermute told CoinDesk in an email.
Inflation has slowed sharply from a high of 9.1% in 2022. Still, in recent months, the Fed has reiterated the need to see more progress on the inflation front before pulling the plug on high interest rates. On Tuesday, Fed Chief Jerome Powell said as much in his testimony to Congress, while also emphasizing that the bank will not wait for inflation to cool to 2% to cut rates.
According to CME’s FedWatch tool, since Friday’s weak payrolls report, traders have priced in about a 70% chance of a Fed rate cut in September and see an increasing likelihood of another cut in December.
The response of the US Treasury yield curve to the expected soft CPI release could influence broader market sentiment, including bitcoin.
Slower inflation and bigger rate-cut bets could boost prices on the two-year note, sending its yield lower. That’s because when investors anticipate lower interest rates, they are willing to pay a premium for a bond with a higher yield in the present. Meanwhile, the yield on the 10-year note is likely to remain elevated as markets fear larger budget deficits under a potential Trump presidency. Republican candidate Donald Trump’s chances of winning the November 4 election have recently increased.
The net effect will be the so-called bull’s inclination of the yield curve, represented by the spread between the yields on the 10-year and 2-year notes. The curve has been inverted, with 2-year notes consistently offering a relatively higher yield since mid-2022.
According to the CAIA Association, periods of sharp increases, characterizing a rapid normalization of an inverted yield curve, have historically occurred during periods of economic contraction and coincided with risk aversion.
“The typical periods of growth were: 1990-1992, 2001, 2003, 2008 and 2020, and all were recessive periods.” CAIA said in an explainer.
“Stocks typically do not fare well during this type of regime, and their performance during these periods clearly lags behind the overall historical average,” CAIA added.
Noelle Acheson, author of the Crypto Is Macro Now newsletter, made a similar observation in the July 4 edition, saying, “a sharp incline has always preceded the onset of a recession.”
Acheson added that the curve has steepened somewhat recently due to persistent political uncertainty in the U.S. “This also makes a Trump victory more likely in the interim, which implies a possible spike in inflation driven by tariffs and a flood of issuance to finance promised tax cuts,” Acheson explained.
Investment banks like JPMorgan and Citi are betting on the slope of the yield curve.
Bitcoin
‘This is huge’ — Billionaire Mark Cuban issues ‘incredible’ Bitcoin and crypto prediction amid price slump
Bitcoin
Bitcoin
came back with a vengeance this year when former President Donald Trump Cryptocurrency boosts US presidential election in November with ‘revolutionary’ plan.
The price of bitcoin has surged to more than its all-time high in recent months, surpassing $70,000 per bitcoin and triggering a wave of mega-optimistic predictions about the price of bitcointhough it fell again this week, falling below $65,000 after the Federal Reserve kept interest rates steady.
Now, as Elon Musk suddenly breaks his silence on bitcoin and cryptocurrenciesBillionaire investor Mark Cuban called a California plan to digitize 42 million car titles using blockchain an “incredible step forward” and “huge” for cryptocurrencies.
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Mark Cuban, famous Shark Tank investor and billionaire owner of the NBA team Dallas Mavericks, has… [+] called a cryptocurrency update “amazing” amid bitcoin’s price slump.
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The California Department of Motor Vehicles (DMV) has digitized 42 million car titles using blockchain, it was reported by Reuters, through technology company Oxhead Alpha on the Avalanche blockchain and designed to detect fraud and facilitate the securities transfer process.
“This is an incredible development for crypto,” Cuban, best known as an investor on TV’s Shark Tank and owner of the Dallas Mavericks NBA team, posted on X, joking that U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler could sue the state as part of his hostility toward cryptocurrencies and blockchain technology.
“The reason this is huge for crypto is because people who hold the tokens will have an app with an Avalanche wallet,” Cuban said. “Tens of millions of Californians having and using a crypto wallet in the next five years, or however long it takes, normalizes the use of wallets and crypto.”
John Wu, president of Avalanche developer Ava Labs, told Reuters that California’s DMV is “creating a wallet that you can download on your phone.”
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Bitcoin’s price has rallied this year, triggering a wave of bullish bitcoin price predictions from… [+] people like billionaire Mark Cuban.
Forbes Digital Assets
Last month, Cuban predicted that if the US dollar falls as the global reserve currency, bitcoin could become “a global ‘safe haven’” and a “global currency.” potentially sending the price of bitcoin to a much higher level.
According to Cuban, bitcoin could become what its most ardent supporters “envision” — a means “of protecting our economies… This is already happening in countries facing hyperinflation.”
The price of bitcoin has skyrocketed over the past year, largely due to the world’s largest asset manager, BlackRock, leading a bitcoin attack on Wall Street.
Analysts are starting to pay more attention than usual to Bitcoin-proxy’s underlying enterprise software business MicroStrategy Inc.
How to better invest cash generated from operations is what originally prompted co-founder and CEO Michael Saylor to turn to Bitcoin four years ago. Since then, the Tysons Corner, Va.-based company has adopted a two-pronged strategy of investing in the cryptocurrency instead of traditional assets like short-term Treasuries and ramping up its software operations.
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CoinDesk is a awarded media outlet that covers the cryptocurrency industry. Its journalists follow a strict set of editorial policies. In November 2023, CoinDesk has been acquired by the Bullish group, owner of Optimistica regulated digital asset exchange. The Bullish Group is majority owned by Block.one; both companies have interests CoinDesk has a portfolio of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial board to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.
Bitcoin has retreated from a six-week high as investors shift their focus to speculation the U.S. may sell seized tokens just days after Donald Trump vowed to create a government stockpile of the cryptocurrency if he is elected president again.
The US transferred $2 billion worth of Bitcoin to a new digital wallet address on Monday, blockchain research firm Arkham said in a publish on social media platform X. Market analysis firms have speculated that the tokens are from the Silk Road marketplace, where customers used virtual currencies to buy illegal drugs and hacking tools before it was shut down.
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