Mar 08
Week 10, 2024 - Weekly Market Outlook
The weekly market outlook article provides a brief analysis of the past week's market performance and an outlook for the upcoming week.
Introduction
In this weekly market outlook, we examine the most recent updates in the cryptocurrency ecosystem. With an emphasis on Bitcoin and the macro environment, we analyze recent price action. We evaluate the global cryptocurency market cap, DeFi stablecoin flow and do a short review of the crypto market's biggest gainers and losers. Finally, we evaluate the performance of the Flagship Portfolio Vault.
Macro
Jerome Powell recently concluded his two-day visit to Capitol Hill, delivering key testimony to both the House Financial Services Committee and the Senate Banking Committee. During these sessions, Powell expressed anticipation of interest rate cuts occurring within this year, reinforcing the sentiment that the Federal Reserve is prepared to adjust its monetary policy as needed.
Throughout his testimony, Powell highlighted that the Federal Reserve's policy-setting committee remains cautious. They seek assurance of continued progress towards the 2% inflation target before considering rate cuts. Despite this caution, Powell noted significant easing in inflation over the past year, without a corresponding spike in unemployment. He emphasized that the labor market remains robust, even with increased worker availability due to a surge in immigration.
This stance by the central bank mirrors the perspectives shared following the Federal Open Market Committee's January meeting, suggesting a consistent approach to monetary policy. Powell's comments underscore the Federal Reserve's responsiveness to changing economic conditions, including the unexpected decline in inflation and the recent bank failures.
In discussions with the Senate Banking Committee Powell faced questions about the efficacy of rate adjustments in addressing high living costs. Brown criticized the reliance on rate adjustments, pointing to corporate price gouging as a root cause of inflated costs, which rate changes do not address.
Additionally, Powell addressed regulatory concerns, particularly regarding the Basel III proposal for banking regulation. In a dialogue with Senator Elizabeth Warren (D-Mass.), he assured that any forthcoming changes to the proposal would be both broad and material, aiming to maintain strong capital standards for big banks without undermining the regulation's effectiveness.
Bitcoin
United States-based spot Bitcoin Exchange-Traded Funds (ETFs) experienced significant net inflows of $1.4 Billion as the price of Bitcoin surpassed the ATH on certain exchanges. This surge in inflows represented the third-largest single-day increase for spot Bitcoin ETFs since they began trading on January 11. Despite some outflows from smaller entities and the Grayscale Bitcoin Trust, which saw $368 million in outflows, the net positive influx into Bitcoin ETFs was remarkable, amounting to ten times the quantity of new BTC generated by mining activities on that day.
The substantial inflows were led by BlackRock’s iShares Bitcoin Trust and Fidelity’s Wise Origin Bitcoin Trust, which recorded inflows of $420 million and $404 million, respectively. The collective net inflows into spot Bitcoin ETFs underscored a burgeoning interest and confidence in Bitcoin as an investment, markedly outpacing the current market supply.
On the same day, trading volumes for spot Bitcoin ETFs soared to $5.5 billion, marking it as the second-highest volume day since the products' launch. This spike in trading volume, coupled with strong institutional demand, indicates that spot Bitcoin ETFs, exchange-traded products, and trackers now manage approximately 1 million BTC, or about 5.13% of the total circulating supply of Bitcoin. Remarkably, nearly 83% of this is managed by U.S.-based spot and futures ETFs, showcasing the dominant role of American financial products in the Bitcoin market.
This trend of net inflows into Bitcoin ETFs continued despite facing over $9 billion in outflows, with the sector seeing net inflows totaling $7.5 billion worth of BTC within just two months of their operation. Notably, BlackRock’s IBIT has already accumulated $10 billion in assets under management, achieving a milestone that took gold ETFs nearly two years to reach.
Top Gainers and Losers
As a top performer this week: Popcat with over a 813.8% gain. The memecoin sector seems to have been the biggest winner this week.
The worst performing asset this week is L7DEX
Global Market cap
The total market capitalization of the cryptocurrency ecosystem grew this week, from $2.3trillion to $2.7 trillion in the past 7 days.
Stablecoin Flows
The total market capitalization of stablecoins has risen to around $150 billion.
Flagship Portfolio Vault Performance
Over the past 7 days, the share price of the Portfolio Vault went from $59.12 to $67.74, which is a 14.89% increase.
We have decided remain ultra bullish Bitcoin as our indicators are flashing an ultra bullish crypto environment. While it's not an alt season environment, we are observing certain altcoins outperforming the market. Consequently, we have not ebalanced our vault and our letting our winners ride. Therefore, our risk profile can be classified as ultra bullish.
If you’d like to access Flagship’s portfolio Vault, click here.
Disclaimer: Nothing on this site should be construed as a financial investment recommendation. It’s important to understand that investing is a high-risk activity. Investments expose money to potential loss.
