Feb 02
Week 5, 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
In January, U.S. job growth likely experienced a slight slowdown, reflecting a resilient economy and strong worker productivity that motivated businesses to hold onto their employees. This trend may contribute to sustaining economic expansion throughout the year. Despite recent notable layoffs, such as the 12,000 job cuts announced by United Parcel Service, economists are focusing on the positive aspect of worker productivity, which has seen more than 3% annualized growth for three consecutive quarters, and cooling labor costs.
Businesses, cautious about workforce reductions post-COVID-19, are adjusting workforces through reduced temporary hires or hours rather than layoffs, recognizing the value of retaining employees for potential demand surges. Job growth is anticipated across various sectors, with the government, leisure and hospitality, and healthcare likely continuing to show strength. The employment report will also include annual "benchmark" revisions, potentially affecting past payroll data, average hourly earnings, and the workweek length.
Meanwhile, New York Community Bank (NYCB) faces challenges, with its stock declining sharply following a surprise loss and a significant dividend cut. This comes after acquiring assets from the failed Signature Bank last year, pushing NYCB over the regulatory threshold for larger banks. Moody's is considering downgrading NYCB to "junk" status due to concerns over losses and reliance on wholesale funding.
The broader implications of Fed rate hikes are yet to be fully realized, as indicated by the ongoing adjustments in the banking sector and the labor market. These developments reflect a complex economic landscape where productivity, regulatory pressures, and market expectations interplay to shape the future direction of U.S. economic policy and corporate strategy.
Bitcoin
This week, the 10 spot Bitcoin ETFs witnessed their first net inflows in a week, marking a significant shift in investor sentiment and contributing to a surge in Bitcoin's value to its highest point since the day following the commencement of trading for these funds. This change comes despite the Grayscale Bitcoin Trust (GBTC) experiencing a slowdown in its previously substantial net outflows. Collectively, ETF issuers increased their Bitcoin holdings by more than 4,200, valued at approximately $183 million, a stark contrast to the continuous daily outflows observed last week. From January 23 to January 26, the funds saw about 20,000 Bitcoin withdrawn, with the last net inflow recorded on January 22, when the group collectively added just over 1,200 Bitcoin.
This turnaround has positively impacted Bitcoin's market price, which had dipped below $39,000 last week due to accumulating sales. However, by early Monday, the price rebounded to a high of $43,900 and stabilized around $43,500, indicating a roughly 10% increase from the previous week's levels. The slowing of outflows from GBTC since the ETFs' launch is notable. Initially, the fund experienced an average of $470 million exiting in the six days following the ETFs' introduction. By Monday, this figure had decreased to $192 million, as reported by BitMEX.
In the 12 trading days since their approval on January 10, the new ETFs have collectively seen net inflows surpassing $1 billion, highlighting a growing investor interest in Bitcoin through these investment vehicles, according to BitMEX. This influx of capital into Bitcoin ETFs suggests a renewed optimism in the cryptocurrency market, reflecting broader trends and investor responses to evolving market dynamics.
Top Gainers and Losers
As a top performer this week: GXChain with over a 645.8% gain. GXChain is a blockchain platform for the global data economy, designed to build a trusted data internet of value.
The worst performing asset this week is DogWifHat, DogWifHat is a memecoin in the Solana Ecosystem
Global Market cap
The total market capitalization of the cryptocurrency ecosystem remained stable this week, from $1.7 trillion to $1.71 trillion in the past 7 days.
Stablecoin Flows
The total market capitalization of stablecoins has remains around its level at $130 billion.
Flagship Portfolio Vault Performance
Over the past 7 days, the share price of the Portfolio Vault went from 39.22 to 41.78, which is a 6.12% increase.
While the the Bitcoin ETF is now complete, the market has pivoted towards a neutral stance. We have decided to flip Neutral as our indicators are flashing a neutral environment As a result, our risk profile is now Neutral
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.
