Daily News | Bitcoin ETFs Make Key Progress; Institutions Predict BTC Price to Record High Next Year; More than Half of the World's Countries and Regions Achieved Crypto Legalization

Crypto Daily Digest: Bitcoin ETFs May Make Key Progress, Institutions Predict BTC price to Record High Next Year

On December 7th, according to sources cited by Reuters, discussions between the SEC and asset management companies applying for spot Bitcoin ETFs delved into key technical details, indicating that the agency may soon approve these products. This includes regulatory arrangements, subion and redemption mechanisms. According to insiders, as the discussion was conducted privately, anonymity was requested. A spokesperson stated that BlackRock did not respond to a request for comment, Invesco declined to comment, and Grayscale stated that they will continue to have constructive contact with the SEC.

On December 8th, Bloomberg analyst Eric Balchunas announced on his social media platform that Fidelity’s spot Bitcoin ETF code has been designated as FBTC and has been listed on DTCC (Depository Trust and Clearing Corporation of the United States).

On December 8th, Ethereum core developer Timo Beiko summarized the 176th ACDE meeting on social media. The developers discussed the status of Denchun, the schedule for testnet, and how to plan for the next network upgrade. According to the meeting discussion, Devnet # 12 was launched last week and almost all clients are running on it. Errors have been discovered and fixed in several clients, including Reth and Lighthouse.

Meanwhile, the development team has prepared a fork testnet and plans to conduct a large-scale Goerli shadow fork in the coming weeks. The developers unanimously agreed that if things go smoothly, a Goerli fork date will be set in early 2024, with the goal of activating Denchun online in January. It is reported that the last ACDE meeting of 2023 will be held at 22:00 Beijing time on December 21.

Asset management company VanEck tweeted its top 15 predictions for the crypto industry in 2024. Specifically, it includes:

1.The US economic recession is approaching, but the first batch of Bitcoin spot ETFs will also be approved. In the first quarter of 2024, over $2.4 billion may Flow into these ETFs to support the price of Bitcoin.

2.The fourth Bitcoin halving in 2024 will have minimal market disruption, and after the halving, Bitcoin prices will rise, leading to significant profits for some low-cost miners.

3.The price of Bitcoin will reach a historic high in the fourth quarter of 2024, which may be driven by political events and regulatory changes after the US presidential election.

4.Ethereum will not surpass Bitcoin, but it will still outperform major technology stocks. Ethereum’s market share will be challenged by other smart contract platforms.

5.After the implementation of EIP-4844, Ethereum L2 will capture the majority of EVM compatible TVLs and trading volumes.

6.NFT activities will rebound to historic highs, Ethereum will continue to lead, and Bitcoin will gain attraction through the Ordinals protocol. By the end of 2024, the NFT issuance ratio between ETH and BTC will reach 3:1.

7.Binance will lose its spot trading position and competitors such as Coinbase will compete for a leading position. Coinbase’s futures market daily trading volume may exceed $1 billion.

8.The market value of stablecoins will reach over $200 billion, reaching a historic high.

9.DEX’s share in the spot trading market will reach a historic high.

10.Remittances will promote the use of blockchain, and the “Bitcoin staking” on the Lightning Network provides revenue opportunities through new, user-friendly staking tools.

11.A breakthrough blockchain game may have over one million daily players.

12.Solana is expected to become the top 3 blockchain in terms of market cap, TVL, and user count.

13.DePin networks, especially Hivemapper and Helium, will be more widely adopted.

14.The new accounting standards will increase companies’ holdings in cryptocurrencies.

15.DeFi applications that comply with KYC requirements, led by Uniswap, may exceed those that do not, attracting institutional transaction volume and increasing protocol fees.

According to a report released by CoinGecko, over half of the world’s countries/regions have legalized cryptocurrencies, including 119 countries/regions and 4 UK overseas territories. Among them, Europe is at the forefront of global crypto legalization, with 39 out of 41 analyzed countries (95.1%) recognizing its legitimacy.

According to an analysis report, since the bear market bottomed out at the end of 2022, the proportion of holders who have not transferred Bitcoin within two to three years to the total token supply has significantly increased. Last December, this investor group held approximately 8% of the supply of tokens, but now it accounts for over 15%. Although Bitcoin has seen a 165% increase this year, holders who purchased BTC between December 2020 and December 2021 did not choose to make significant profits and leave the market.

According to Deribit data, BTC options with a nominal value of nearly $1.399 billion and ETH option contracts with a nominal value exceeding $458 million will expire and be delivered on Friday, December 7th. The maximum pain point price for BTC is $40,000; The maximum pain point price for ETH is $2,100, reminding investors to pay attention to market changes.

Today’s Main Token Trends

BTC

Bitcoin continues to stabilize around the $42,000 mark this week. Short-term, there might be a gradual decline testing the $42,015 support. Two high targets persist at $45,345 and $47,990. Long-term bullish targets are set at $120,400 and $128,350, with a medium pullback expected in Q1 of the next year.

ETH

Ethereum achieved the upward target of $2,381, reaching a high of $2,382. Short-term, it is expected to test the $2,381 resistance multiple times. The possibility of an upward trend is anticipated, with targets at $2,545. Long-term bullish targets are set at $8,000 and $12,300.

HIGH

The weekly chart completes a golden cross retracement, closing above the $1.586 level. Breaking the first resistance at $1.882, the next target is $2.233. Deviations on the daily and weekly charts suggest a continued uptrend this week. Utilizing a low-risk ratio for position building is suggested for long-term gains.

Macro: Waiting for Non-farm Payrolls and Looking Forward to Next Week’s Federal Reserve Meeting

On Thursday, the US Treasury yield further retraced its intraday gains after the announcement of initial jobless claims. The 10-year US Treasury yield once again approached the 4.1% mark, returning to a three-month low and closing at 4.144%; The two-year US Treasury yield, which is more sensitive to the Federal Reserve’s policy interest rates, closed at 4.592%. The three major US stock indexes collectively closed higher, with technology stocks leading the way. The Dow Jones Industrial Average rose 0.18%, the Nasdaq rose 1.37%, and the S&P 500 Index rose 0.8%.

Due to the unexpected and explicit indication from the Japanese monetary authorities that policy adjustments will be made, the Japanese yen experienced its largest daily increase in nearly a year, and the US dollar/yen experienced a short-term drop of over 200 points in the US market. The market speculated that it may be caused by the “fat-finger error,” and the overall decline for the day widened to nearly 4%. Later, it basically recovered the lost ground from the early morning sharp drop and returned to the 144 level, closing at a new low in three months. Under the pressure of the strengthening yen, the US dollar index suffered setbacks and continued to decline after falling below 104, ultimately closing down 0.509% at 103.65, stopping three consecutive gains.

Prior to the release of the heaviest non farm payroll data this week, spot gold continued to remain stable sideways, falling towards the 2040 mark and ultimately closing at 0.18% at $2028.61 per ounce; Spot silver closed down 0.29% at $23.8 per ounce.

After five consecutive days of decline, international crude oil has shown a easing rebound, but still hovers at the low point since the end of June. WTI crude oil closed up 0.16% at $69.56 per barrel; Brent crude oil rose 0.19% to $74.36 per barrel.

The weak inflation and employment data of the past month has led investors to believe that the Federal Reserve will no longer raise interest rates, and has raised expectations that it will cut interest rates by at least 125 basis points in the next 12 months.

An important report on the US labor market will be released this Friday, and the bulls of US treasury bond bonds hope that the report will provide new evidence of economic cooling. The bond market has priced the Federal Reserve’s interest rate cut for 2024 at more than twice the median expected by policy makers. The latter hinted that they may have already completed the interest rate hike, but also warned that any discussion about rate cuts is too early at the moment.

Federal Reserve officials are in a period of silence before the next policy meeting. Before the December interest rate decision, the United States will also release the latest data on the November Consumer Price Index (CPI). With the latest employment and inflation report, the Federal Reserve will update its quarterly economic forecast summary and chart.

Observers believe that the Federal Reserve will maintain policy stability at next week’s meeting, and the next step will be to cut interest rates. Some people believe that Federal Reserve officials have not strongly opposed the expectation of easing next year, as this is consistent with their perception of the ultimate direction of policy.

Michael Gapen, Chief US Economist at Bank of America, said that in almost any economic situation, whether it is a hard landing, a soft landing, or a non landing, inflation next year may continue to slow down, driven by a decrease in rental costs. He expects Federal Reserve officials to release three interest rate cuts in 2024 in their economic forecast summary next week, “I call this a shift from a hawkish stance to a dove stance,” he said.

BI strategists Ira F. Jersey and Will Hoffman point out that if the Federal Reserve reiterates that it will maintain interest rates at their peak for a long period of next year, the interest rate market, which is expected to see a significant rate cut in early 2024, may be impacted next week.