Weekly Crypto Wrap: 15th February 2024

TLDR

• Axie Infinity (AXS) is coming to BTC Markets.
• Bitcoin surpasses US$52k, amid rising ETF demand.
• US ETFs absorb more Bitcoin than miners’ production, fuelling price rally.
• Avalanche (AVAX), surged an impressive 13.91% over the week.
• Higher US inflation data slows down wider market momentum.

BTC Markets announcements

New listing: Axie Infinity (AXS) is coming to BTC Markets.

We're excited to announce the addition of Axie Infinity (AXS) to our list of supported cryptocurrencies. AXS has emerged as an innovative project in the blockchain and gaming space. AXS will be added to our platform on Wednesday, February 21st.

In preparation, deposits, withdrawals, and post-only orders for the AXS/AUD pair will be active on February 20th. Full market trading will commence on the following day.

Learn more about Axie Infinity (AXS) by visiting our blog and following us on X (Twitter). Stay tuned for more updates about this listing in the coming days.

Bitcoin (BTC) withdrawal fees have been reduced on BTC Markets.

We have just taken a significant step to enhance your experience with Bitcoin (BTC) withdrawals. Effective immediately, we have lowered our Bitcoin (BTC) withdrawal fees by 25%, decreasing from 0.0004 BTC to 0.0003 BTC.

At BTC Markets, we are committed to being responsive to market demands, ensuring that our services remain competitive and accessible to all our users. This reduction in withdrawal fees is a testament to our ongoing dedication to providing you with the best possible trading experience.

You can view our fee structure here.

Trade Bitcoin today.

CEOs Corner

Navigating the post-spot Bitcoin ETF landscape.

BTC Markets CEO Caroline Bowler navigates the post-spot Bitcoin ETF landscape and offers insights into the 2024 outlook, examining transformative shifts in market dynamics and sentiment.

The recent approval of 11 spot Bitcoin ETFs by the US SEC, prompts re-evaluation of indicators, highlighting bullish trends. In these evolving markets, it is essential to analyse events, prevailing market sentiment and any indicators that have influenced the landscape in recent months.

Read her full post here.

BTC Markets in the news

Bloomberg Daybreak Asia: BTC Markets' Bowler on Bitcoin ETFs outlook.

Caroline Bowler, CEO at BTC Markets, shares her outlook for Bitcoin, one month after the U.S. approval of multiple Bitcoin exchange-traded funds (ETFs). Tune in as she engages in a discussion with Haidi Stroud-Wattson on Bloomberg Daybreak Australia to chat about these events and how they are impacting the crypto market. 

Watch the full episode here.

AFR: Bitcoin eyes longest winning run in a year on ETF inflows.

In further commentary surrounding the price surges in Bitcoin, BTC Markets CEO Caroline Bowler is featured in the Australian Financial Review talking about the capital inflow into the crypto market.

"Strong inflows: There are indications of an increasing movement of institutional money into the asset class," shares Caroline Bowler.

Read the full article here.

Investing.com: Bitcoin price gains from inflow of institutional money.

Since January 11th, nine new spot Bitcoin funds commenced trading in the US, attracting over US$9 billion in investor inflows. Offerings from BlackRock (NYSE:BLK) and Fidelity Investments emerged as the most successful ETF launches in terms of post-launch asset accumulation, according to Bloomberg Intelligence analysts Eric Balchunas and James Seyffart.

Caroline Bowler, CEO of crypto platform BTC Markets, highlighted an "increasing movement of institutional money into the asset class," indicative of shifting market dynamics.

Read the full article here.

Policy Forum: BTC Markets partners with Blockchain Australia.

We're excited to announce that we have officially partnered with Blockchain Australia for their upcoming Policy Forum on February 21st and 22nd, 2024.

Taking place in Sydney, the event will focus on essential themes: collaborative policy development on Day 1 and effective industry transition management on Day 2.

Limited tickets are available for Day 2 on February 22nd from 10 am to 3 pm. Join us in shaping the future of the cryptocurrency landscape in Australia!

Tickets are available here.

OTC Desk

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Our expert team of traders is at your disposal, ready to help you navigate the world of crypto trading with confidence.

Talk to our OTC Desk today.

The Bitcoin Halving countdown.

As of 10:30 am 15/02/2024.

We are just over two-months away from one of the biggest events that happen in the Bitcoin market. Occurring once every 4 years, block rewards are reduced. This year, they will be reduced from 6.25 Bitcoin to 3.125 Bitcoin per block.

During the 2020 Halving event on May 11th, 2020, Bitcoin's price closed at US$9,448.27 then surged to an all-time high (ATH) of US$69,000 on November 10th, 2021. Representing an increase of 705% over a six-month period.

Source: Coinmarketcap.com

State of crypto

• Higher than anticipated US inflation data slows down market momentum.
• Bitcoin surpasses US$52k, amid rising ETF demand.
• US ETFs absorb more Bitcoin than miners’ production, fuelling rally.
• Google searches for Bitcoin signal increasing interest in cryptocurrency.
• Blockchain poised to unlock US$400 billion revenue opportunity in finance.

The market reacted strongly to the hotter-than-expected US inflation report this week, resulting in losses across Wall Street and impacting Bitcoin's attempt to surpass the US$50k range.

Bitcoin shrugged off the wider markets concern of higher-than-expected inflation reading in the US, surging as high as US$52k gaining 4.22% on the day. Bitcoin's break through the key psychological milestone reflects growing demand for US spot Bitcoin ETFs (ETFs) and speculation about rate cuts.

The ETFs have absorbed significantly more Bitcoin than miner production, with BlackRock's iShares Bitcoin Trust and Fidelity's Wise Origin Bitcoin Fund leading in inflows. The ETFs have amassed US$10 billion in assets in less than a month, contributing to Bitcoin's recent price surge.

The ETFs also experienced record weekly inflows, surpassing US$1.2 billion. Bitcoin's price exceeding US$52k for the first time since 2021, is attributed to increased institutional interest and optimism surrounding the upcoming Halving event in April.

Source: Blockworks.co

Bitcoin's surge in value propels it to become the 10th largest asset globally, surpassing established entities like Berkshire Hathaway and JPMorgan. With a market capitalisation nearing US$1 trillion, Bitcoin's growing significance in the financial market cannot be understated.

Source: Companiesmarketcap.com

Google searches for Bitcoin are on the rise, reaching levels not seen since July 2022, indicating increasing interest in the asset class. This uptick in search volumes coincides with Bitcoin's price surge, reflecting heightened attention from investors and retail.

Source: Theblock.co

Blockchain technology presents a US$400 billion revenue opportunity for asset managers, driven by the tokenisation and fractionalisation of private assets. Major institutions like Siemens and Franklin Templeton leverage blockchain to streamline processes and reduce costs, signalling a shift towards broader adoption across the financial sector.

The weekly crypto close from TradingView*.

This week's standout performer, Avalanche (AVAX), surged an impressive 13.91%, leading the pack. Bitcoin (BTC) followed closely with a 13.43% gain, with Solana (SOL) and Chainlink (LINK) not far behind, boasting gains of 12.54% and 10.98%, respectively.

AVAX's remarkable surge was fuelled by the Durango upgrade on Fuji Testnet, aiming to bolster cross-chain communication and scalability. Bullish signals from technical indicators and on-chain metrics further bolster AVAX's outlook. Meanwhile, Bitcoin's ascent past the US$52k mark was supported by increased inflows into US spot Bitcoin ETFs.

Source: Tradingview.com

Crypto Fear& Greed Index

Source: Alternative.me

Year-to-date in the crypto space from TradingView**.

Chainlink (LINK) leads as this year's top performer, boasting an impressive gain of 34.47%. Bitcoin (BTC) follows closely with a rise of 22.63%, while Ethereum (ETH) and Solana (SOL) trail behind, showing gains of 21.95% and 14.47%, respectively.

*The weekly trading stats as of Monday, February 12th at 11:00 am AEDT, based on data from Tradingview in USD.

**Year-to-date performance as of Thursday, February 15th at 11:00 am AEDT, based on data from Tradingview in USD.

Crypto news

Solana’s (SOL) new token extensions: a game-changing move for NFTs.

Solana's 13 new token extensions, particularly the ability to natively embed rich metadata into NFTs, are creating a buzz among developers. This advancement facilitates the addition of more information to NFTs, such as images and traits, beyond its previous ability to only include minimal metadata, such as the supply of a given token. With these extensions, developers can create custom NFT standards, fostering greater innovation and competition within the Solana network. Developers are already jumping on board, suggesting a potential boost for the Solana NFT ecosystem.

Previously, due to the lack of native metadata capabilities in Solana, Metaplex - a protocol allowing for the creation and minting of NFTs with additional metadata - dominated Solana’s US$4.8 billion NFT market, having facilitated the minting of over 20 million NFTs, nearly monopolising the market.

Solana's new token extensions, especially for incorporating native NFT metadata, are seen as transformative, enabling it to catch up with networks like Ethereum. These extensions facilitate innovation, allowing for the creation of new token standards and features like custom logic for transfers and royalty distribution. “The new token extension is a game-changer for Solana NFTs,” says a spokesperson at NFT marketplace Magic Eden.

Buy SOL on BTC Markets.

Avalanche's (AVAX) price surge faces upcoming token unlock.

Avalanche's (AVAX) recent price surge positions it near the US$40 mark, a level it reached between December 2023 and early January 2024. This marks a strong performance, with a 10% increase over the week and a strong price recovery of more than 17% since the beginning of February, up from its US$28 low in late January.

However, the upcoming unlocking of approximately US$370 million worth of AVAX tokens could introduce bearish pressure on its price. On February 22nd, Avalanche is set to unlock 9.54 million tokens, about 2.6% of AVAX's total supply, in four tranches to strategic partners (2.25 million), the foundation (1.67 million), the Avalanche team (4.5 million), and other recipients (1.13 million).

Whether these tokens are held or sold will determine the impact on the market. If sold, they could potentially dampen AVAX's recent momentum, making the coming days crucial.

Trade AVAX on BTC Markets.

ImmutableX (IMX) price nears high, key support looms.

The ImmutableX (IMX) price has seen a swift increase over the last 20 days, reaching above US$3. This marks its highest price in over two years, breaking past a long-term resistance area from February 2022. Despite this bullish trend, the Relative Strength Index (RSI) shows mixed signals, indicating potential caution for traders. The RSI's bearish divergence suggests that while the trend is upward, there might be a risk of a trend reversal. This poses a critical moment for IMX as it nears its all-time high with only one significant resistance left before it heads into price discovery.

Analysts and traders are optimistic about IMX's future, noting significant gains since its recent wedge breakout. Technical analysts suggest a bullish trend, potentially in the final stage of an uptrend based on Elliott Wave theory and RSI readings above 50. If IMX price continues increasing, breaking out from the key resistance at US$2.45 would support this trend, projecting a potential 35% increase to the next major resistance at US$4. However, closing below US$2.45 could negate this bullish forecast, potentially leading to a 40% decline to the nearest support at US$1.75.

Buy IMX on BTC Markets.

The week ahead: economic events

February

15th: U.K. GDP Growth Rate, GDP Annual Growth Rate and Monthly GDP MoM.

16th: U.S. Retail Sales. U.K. Retail Sales MoM.

17th: U.S. Building Permits, Producer Price Inflation MoM, and Michigan Consumer Sentiment.

20st: Australia Interest Rate. 

21st: Canada Inflation Rate. Japan Balance of Trade.

22nd: U.S. Fed Funds Interest Rate.

Source: Economic Calendar (tradingeconomics.com)

Market reflections

Overview

Australian consumer confidence jumps 6.2% to 20-month high, NAB's business confidence edges up, while dwelling approvals decline. The US faced an unexpected inflation surge, causing market instability. In contrast, China saw a significant decline in consumer prices, hinting at deflationary risks. However, Germany's ZEW Economic Sentiment Index surged, reflecting optimism, while Canada's decreased unemployment rate demonstrated labour market resilience.

Australia

• Australian consumer confidence surges 6.2% to 20-month high.
• NAB's business confidence edges up; consumer spending rises, business credits decline.
• Dwelling approvals and private house approvals decline in December.

Consumer confidence in Australia experienced a surge, increasing by 6.2% to reach its highest level in 20 months according to Westpac’s consumer sentiment report. This uptick was driven by easing inflation and the belief that the Reserve Bank of Australia (RBA) has concluded its tightening campaign.

However, consumer sentiment has remained cautious, staying below the neutral mark since February 2022. Australia’s inflation rate slowed to 4.1% in the fourth quarter of last year, while the RBA held rates steady at 4.35% at its February meeting.

Matthew Hassan, a senior economist at Westpac noted “While sentiment is still firmly pessimistic, there finally looks to be some light at the end of the tunnel for Australian consumers. Moderating inflation and shifting expectations for interest rates appear to be the main factors behind the lift."

The National Australia Bank’s (NAB) business confidence index also showed a slight improvement, although it remained below the long-run average. Mixed signals were observed in consumer spending and business credits, with consumer spending rebounding in January while business credits declined.

"We will closely monitor how confidence evolves in early 2024 as price pressures ease further and attention shifts to the easing phase of the rates cycle," said NAB's chief economist, Alan Oster.

According to NAB's transaction data, Oster noted, "Our monthly transaction data showed a rise in spending in January, driven by a rebound in retail spending following the decline seen in December."

He added, "Changes in seasonal patterns and the impact of prices on these estimates remain uncertain, but the increase in January is nevertheless a positive sign."

Meanwhile, dwelling approvals and private house approvals experienced declines in December 2023, indicating challenges in the housing sector.

Global

• Unexpected surge in US inflation disrupts the wider market.
• China sees 0.8% drop in consumer prices, marking steepest fall in over 14 years.
• Germany's ZEW Economic Sentiment Index rises as Canada's unemployment rate drops.

The macroeconomic landscape was disrupted by an unexpected surge in the US inflation print this week, triggering losses throughout Wall Street and hindering Bitcoin's endeavour to surpass and maintain the US$50k threshold.

The uptick in core consumer prices, rising by 0.4% in January, the sharpest increase since April 2023. This surge was primarily fuelled by escalating costs of shelter and transportation services, challenging the prevailing trend of disinflation, and strengthening the argument for a more hawkish stance within the Federal Open Market Committee (FOMC).

Consequently, annual core inflation reached a 2-1/2-year low of 3.9%, defying market expectations. Despite the higher than anticipated inflation readings, the Federal Reserve appears inclined to maintain its interest rates at current levels, with financial markets pricing in a higher probability of the Fed holding rates steady in May.

“There’s still some inflation in the system that’s going to take some time to work through,” said Omair Sharif, founder of Inflation Insights, a research firm. “This justifies the Fed wanting to wait and see how things are going to go.”

The persistently high inflation levels, coupled with ongoing economic growth, have become significant considerations for the Fed's monetary policy decisions. While the economy continues to demonstrate robust growth, the Fed faces the challenge of managing inflationary pressures amidst rising costs of services and goods. 

Turning to employment indicators, Canada's unemployment rate eased to 5.7% in January, defying market expectations and marking the first monthly decrease in over a year. This positive shift, accompanied by an increase in job additions, suggests resilience in the Canadian labour market despite concerns over higher interest rates.

Conversely, China experienced a decline in consumer prices, with a 0.8% year-on-year fall in January, marking the most significant drop in over 14 years. This downward trend, attributed to declining food prices, reflects the fourth consecutive month of CPI decline in China, signalling potential deflationary pressures.

Japan's GDP unexpectedly contracted by 0.1% quarter-on-quarter in Q4 of 2023, missing market forecasts of a 0.3% growth and marking the country's first recession in five years. This decline was driven by a drop in private consumption amid cost pressures and global challenges.

In Europe, Germany's ZEW Economic Sentiment Index rose for the seventh consecutive month in February 2024. This surge, reaching its highest level in a year, comes amidst hopes that major central banks will initiate interest rate cuts. Over two-thirds of survey respondents anticipate the European Central Bank (ECB) to implement rate cuts in the next six months, with similar expectations for the US central bank.

The UK's inflation rate remained unchanged at 4.0% in January 2024, staying close to the two-year low recorded in November and falling below market expectations of 4.2%. Despite this, it still exceeded the Bank of England's target of 2.0%. Meanwhile, the core inflation rate held steady at 5.1%, slightly below market consensus.

There was a decline in the UK’s unemployment rate to 3.8% in the fourth quarter of 2023, the lowest rate since late 2022. The decrease in unemployed individuals, coupled with a rise in the employed, indicates ongoing recovery in the UK labour market.

Regulation roundup

South Korea to ban non-compliant crypto exchanges in regulatory crackdown.

The Korea Financial Intelligence Unit (KoFIU) has unveiled plans to crack down on crypto exchanges that fall short of stringent regulatory standards, as part of South Korea's broader initiative to bolster financial oversight and consumer protection within the rapidly evolving digital asset industry. This sweeping regulatory overhaul follows extensive consultations with industry stakeholders and policy advisors, marking a proactive approach to address emerging risks and ensure market integrity.

Under the new measures set for implementation in 2024, the KoFIU will intensify scrutiny and inspection of crypto exchanges, with a focus on compliance with regulatory requirements. Exchanges deemed unsuitable will face expulsion from the market, aiming to eliminate entities posing risks to investors and the financial system. Additionally, the criteria for market entry will be broadened to prevent the admission of unfit businesses.

This regulatory tightening aligns with global standards recommended by the Financial Action Task Force (FATF) and anticipates the enactment of the Virtual Asset Consumer Protection Act, in July 2024. By mandating rigorous assessments and license renewals for crypto exchanges, South Korea aims to foster a safer and more transparent trading environment while establishing itself as a leader in managing the complexities of the digital economy.

Compliance conversations

Social media platforms fuel rise in scams.

Social media platforms have become hotbeds for scams, with bad actors leveraging platforms to dupe unsuspecting users. These scams often involve impersonating famous brands or celebrities to promote fraudulent schemes, preying on individuals' trust and curiosity.

In June 2023, the European Consumer Organisation (BEUC) raised alarms by releasing a report highlighting how social media platforms enable crypto scams. The 20-page report emphasised the loose policies maintained by platforms, which allow scammers to easily target unsuspecting individuals.

Protecting yourself from social media scams should be a priority for all users. First, exercise caution when engaging with any content on social media, ensuring that you verify the authenticity of accounts and projects before taking any action. Being wary of promises of quick wealth or unrealistic investment opportunities, can also help avoid falling victim to these scams.

You should be aware of common tactics used by scammers, such as creating fake accounts, impersonating influencers, or celebrities, and employing persuasive language to lure victims into their scams. Educating yourself about the most commons scams and understanding the risks associated with engaging with unknown individuals online, can also go a long way in preventing fraud.

Additionally, you should report any suspicious activity or accounts to the respective social media platforms, helping to mitigate the spread of scams and protect other users from falling victim. By remaining vigilant and practicing scepticism, you can safeguard yourself against the pervasive threat of social media scams.

ASIC provides a checklist of common scams and ways to avoid them. To learn more, visit ASIC’s website.

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Weekly prices are accurate as of 11:00 AM AEST on 15/02/2024.

Disclaimer: The information provided on this page is issued by BTC Markets Pty Ltd (BTC Markets, we, us, our). The information is general only and is not intended to constitute an opinion or recommendation with respect to its contents. Past performance is not a reliable indicator of future performance. Any reference to past performance is intended to be for general illustrative purposes only. The information cannot be relied upon for any purposes and is not intended to be a substitute for professional advice. The information does not purport to be complete, accurate or contain all of the information that a person may require to make a decision. It may also contain forward looking statements, which are subject to known and unknown risks, uncertainties and other factors. We recommend you obtain professional advice before making any decision with respect to the matters discussed in this document. To the maximum extent permitted by law, BTC Markets will have no liability for any loss or liability of any kind: (i) arising in respect of the information contained (or not contained) on this page; or (ii) arising from a person relying on any information or statement contained on this page. The information provided is only intended for recipients in Australia. This information cannot be reproduced without our prior written permission.