The latest research from Matrix Institute shows that the focus for the next week will be on the following areas:
– The decrease in the US inflation rate, which may lead to an increase in BTC as ETF funds flow in.
– Perpetual contract investors are preparing in advance to deal with the possible launch of ETH ETF.
– Trump hopes to gain more votes by supporting cryptocurrencies, leading to an increase in Meme coins with a Trump theme.
According to the data, there is an increased correlation between CPI and BTC prices. If the next CPI data is below 3.3%, BTC is expected to reach a new all-time high. BTC’s price performance in January was slightly weak after 24 years, but it surged in March and has been consolidating in the past two months. With the approval of BTC ETF, the price driver for BTC has shifted from application-driven to being influenced by macro factors, with CPI being one of them.
The data shows a correlation between the market flow of BTC ETF and CPI. In January, the CPI index reached 3.4%, higher than the expected 3.2% and the previous month’s record of 3.1%, resulting in outflows from GBTC ETF. In February, the CPI index was 3.1%, lower than the expected 3.4%, leading to a gradual recovery and acceleration of funds flowing into BTC ETF. In March, the CPI was 3.2%, and the inflow of funds into BTC ETF immediately stopped. In April, the CPI exceeded expectations at 3.5%, causing BTC to fall to $60,000, and with weak ETF fund flow in Hong Kong on April 30, the price dropped to around $56,500. In May, the CPI was 3.4%, and BTC rebounded. If the inflation index in June reaches 3.3% or lower, BTC prices are expected to reach an all-time high, providing momentum for net inflows into BTC ETF.
At the same time, the seasonal trend in June is relatively positive, with an average return rate of 4%+. July is even stronger, with an average return rate of 8%+. Therefore, benefiting from positive seasonal factors, Bitcoin is expected to achieve a growth of more than 12% in the next two months.
In the market, there has been an increase in the flow of perpetual contracts for ETH, indicating a lack of confidence in a significant increase in ETH after the launch of ETH ETF. Market data reflects investors’ views on ETH ETF. After the SEC approved the first part of the ETF application, the market saw a rapid increase of $4 billion in the flow of funds into ETH perpetual contracts. Based on historical experience, investors may profit from long positions in Ethereum as the price usually drops after the launch of new products. According to the latest report from Grayscale, due to the overvaluation, the price increase of ETH ETF is expected to be limited compared to the BTC ETF launched in early 24.
The political attributes of cryptocurrencies have been strengthened, and the attitude of the next government towards this emerging digital asset is crucial. A survey conducted by Grayscale for the 2024 US election’s second phase shows that due to geopolitical tensions and inflation factors, more and more voters are turning to Bitcoin, with support rising to 41%. 47% of voters expect their investment portfolios to include cryptocurrencies, higher than the 40% at the end of last year. About 32% of voters are willing to learn about cryptocurrencies as investments.
Combined with the SEC’s approval of ETH ETF, cryptocurrencies have become an issue that both parties cannot ignore, and the attitude of the next government towards this emerging digital asset is crucial. Currently, the two strong competitors in the presidential election have shown a friendly attitude towards cryptocurrency and actively created related topics. The political attributes of cryptocurrencies are increasing. In a report released by Matrixport on May 10, 2024, titled “Trump Could be the Biggest Driving Force for Bitcoin’s Rise this Year,” it was predicted that if Trump, who supports economic growth and is friendly to cryptocurrencies, is leading in the polls as the 2024 presidential election approaches, it may drive an increase in BTC prices.
The market value of the most popular Trump-themed Meme coin (Trump-USDT) has tripled in just three weeks, reaching $600 million. As mentioned in our report last week, titled “The US Political Sphere is Shifting towards Supporting Cryptocurrencies,” not only Trump and Republicans but also Democrats, as well as President Biden and the White House, are seen as supporting cryptocurrencies.
BTC has performed exceptionally well in election years (2012, 2016, and 2020) with an average increase of 192%, and the US stock market has also performed well. With the popularity of Trump-themed Meme coin (Trump-USDT), it is possible that more series of Meme coins will emerge in the future.
The above points are from Matrix on Target. Contact us for the complete Matrix on Target report.
Disclaimer: The market carries risks, and investment should be cautious. This article does not constitute investment advice. Digital asset trading can be highly risky and volatile. 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.
