Matrixport Research Institute’s latest report highlights key market information:
– CPI has been below market expectations for two consecutive months, benefiting the venture capital market.
– The Federal Reserve does not rule out providing stimulus measures by the end of the year, which is favorable for the price of BTC.
– The hawkish attitude of the Federal Reserve is noteworthy, with a possibility of a slight shift towards a dovish stance by the end of the year.
– This week is a major macroeconomic week, with US CPI, PPI, and economic data from the Federal Reserve meeting all relatively favorable for the venture capital market. However, the crypto market has responded poorly, contrasting significantly with the US stock market. The lower inflation data and the slightly hawkish stance of the Federal Reserve may create confusing signals for BTC.
CPI data has been below the previous month for two consecutive months, benefiting BTC prices.
On June 12, the US Consumer Price Index (CPI) data was released. The CPI year-on-year growth for May was 3.3%, slightly lower than the previous and expected values of 3.4%. The month-on-month CPI growth for May was 0%, below the expected 0.1% and significantly slower than the previous value, reaching the lowest level since July 2022. This marks the second consecutive month where CPI has been lower than the previous month. Since financial markets mainly focus on marginal changes, this inflation data is clearly favorable for Bitcoin, potentially providing enough “tailwind” effect for a price increase.
The hawkish stance of the Federal Reserve is noteworthy, with a possibility of a slight shift towards a dovish stance by the end of the year.
Federal Reserve officials have adopted a slightly hawkish stance and adjusted their interest rate forecasts. The FOMC (Federal Open Market Committee) expects two rate cuts in 2024, rather than the one cut that was widely anticipated by the market. This reactive behavior is predictable, and it cannot be ruled out that the Federal Reserve may shift towards a dovish stance by the end of the year to further support the rise of risk assets.
It is not ruled out that the Federal Reserve may provide more stimulus measures by the end of the year, benefiting BTC prices.
The Federal Reserve continues to advocate for a long-term high-interest rate policy, and the 10-year Treasury bond yield has broken its long-term upward trend, indicating that the market is pricing in a more accommodative monetary policy by the Federal Reserve.
Historically, based on seasonal trends, June and July are expected to provide upward support for Bitcoin. As usual, August and September pose more challenges, but before the strongest fourth quarter of the year arrives, the market usually sees positive performance. These buying trends help support the rise in Bitcoin prices, but the lower inflation rate may change the Federal Reserve’s response mechanism. Therefore, it is not ruled out that the Federal Reserve will provide more stimulus measures by the end of the year, potentially leading to a historical high for Bitcoin.
Biden nominates CFTC Commissioner Romero to lead FDIC, impact of US elections on crypto assets continues to expand.
US President Biden has nominated Commodity Futures Trading Commission (CFTC) Commissioner Christy Goldsmith Romero to lead the Federal Deposit Insurance Corporation (FDIC), and has nominated CFTC Commissioner Kristin Johnson to serve as Assistant Secretary for Financial Institutions at the Treasury Department. Both Democratic CFTC commissioners have been urging the agency to issue rules or guidelines to protect consumers and address conflicts of interest in the cryptocurrency field. Commissioner Romero has been nominated as FDIC Chairman, warning of “contagion risks” in the crypto market and comparing it to the 2008 financial crisis.
The above viewpoints are from Matrix on Target,
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Disclaimer: The market has risks, and investments should be made with caution. This article does not constitute investment advice. Digital asset trading may involve significant risks and volatility. Investment decisions should be made after careful consideration of individual circumstances and consultation with financial professionals. Matrixport is not responsible for any investment decisions based on the information provided in this content.
