While the index fell 23.2% in Q1, it significantly outperformed most major digital assets. XRP was the only CD20 constituent to post a positive return, rising 0.4% in the quarter, driven by the dismissal of the SEC’s case against Ripple, as well as strong growth in its RLUSD stablecoin. RLUSD’s market cap surged 323% in Q1 to reach $245 million, while cumulative trading volumes exceeded $10 billion in just over three months. The Bitcoin blockchain is public, so you can see all the information as it happens in real-time on the blockchain. And so, some people try to prescribe certain actions to certain transfers.
- This could squeeze miner profitability and reduce Bitcoin supply growth.
- If March’s CPI exceeds the anticipated 2.6% annual rise, Bitcoin might dip as investors pivot to inflation-resistant assets.
- The market seems to believe that inflation is at or near its peak, which they suspect would get central banks to slow the pace of interest rate hikes.
- According to the bank, the FED might be forced to cut rates before the next meeting.
- However, rising claims could fuel recession fears, prompting the Fed to consider rate cuts.
- While no strategy guarantees success, those who take a long-term, well-researched approach are better positioned to navigate financial uncertainties.
Investor sentiment plays an important role in shaping market cycles, with various indicators offering insights into broad trends. Measures like the CBOE Volatility Index (VIX), the Put/Call Ratio, and the American Association of Individual Investors (AAII) Sentiment Survey help gauge investor confidence and risk appetite. However, a drop below expectations of 54.5 could hint at https://hor-tax.com/ inflation or job worries, denting risk appetite. This index often embeds inflation expectations, such that Bitcoin’s hedge narrative could strengthen if consumers anticipate rising prices. The University of Michigan’s Consumer Sentiment Index, released Friday, will reflect US consumers’ economic confidence. “The next FOMC meeting is on the first week of May, can investors wait?
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The Federal Open Market Committee (FOMC) minutes from the March meeting are due on Wednesday. This US economic indicator will offer traders and investors a window into the Federal Reserve’s (Fed) monetary policy direction. Crypto-backed stablecoins like the $7 billion USDS and the $5 billion Ethena USDe—the third- and fourth-largest stablecoins after Tether and Circle’s USDC—add complexity. In the case of USDS, users lock their crypto (for example, ether) into a smart contract as collateral, which then issues stablecoins. To minimize default risk, the value of the collateral must exceed the value of the issued tokens. USDe, by contrast, relies on a delta-hedging strategy, pairing crypto collateral with short positions in derivatives markets to maintain its $1 peg.
Joshua has also been featured on CNBC’s Bitcoin Halving podcast, CoinDesk’s U.S. presidential inauguration livestream, and in top-tier media such as Bloomberg, Forbes, and the Financial Times. A high reading indicates optimism, potentially spurring spending and risk-taking, which could lift Bitcoin as investors seek growth assets. Strong sentiment might also reduce recession fears, indirectly supporting crypto by maintaining market liquidity. For crypto, a strong labor market (fewer claims) might dampen Bitcoin’s appeal as investors lean toward traditional equities. However, rising claims could fuel recession fears, prompting the Fed to consider rate cuts. Historically, this has been a boon for crypto, as lower rates make borrowing cheaper and increase liquidity.
Crypto Daybook Americas: Bitcoin Loses Allure to Gold as Economic Concerns Rise
Beyond the March FOMC minutes, the next US economic indicator for crypto traders to watch is the Initial Jobless Claims. Due every Thursday, this report provides crypto market participants with a real-time snapshot of US labor market health. There’s still significant development effort on the tech side of crypto and it remains quite strong. There are projects that are still in the works, the blockchains are still doing what they’re designed to do and there are several technical and usability enhancements that are in the pipeline. Coinbase, which is one of the largest exchanges in the world, they laid off around 2000 of their 5800-employee workforce over the last year and revenues have gone down significantly.
What Is Total Crypto Market Cap?
Based on these, crypto traders will watch for clues about the Fed’s stance on inflation. This is more so considering recent data showed no significant re-acceleration. Whether you’re new to crypto or looking to deepen your knowledge, our glossary makes it easy to navigate complex terminology with confidence. Crypto lending exists for many of the same reasons as traditional borrowing.
They’ll look at transactions to and from crypto exchanges and attribute that to sell or buy signals and they try to get information around there. And with that, they try to put a price that shows who’s underwater and who’s above water. And right now, we’re still kind of in that underwater phase despite the recent rally in Bitcoin. So it hasn’t necessarily gone up enough to cover some of the costs of many of these miners or some of those investors that bought earlier on in 2022 that are now very much underwater. It’s something that we are looking at on my team just to try to understand a bit more of this on-chain analytics and how it translates to price. But it’s still such an early space and there’s a lot of noise in blockchain data that we have to figure out how to cut through before we can try to tell a more concise and coherent story.