Feb 09
Week 6, 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
The current economic landscape in the United States, presents a mixed picture with implications for risk assets. On one hand, the Federal Reserve Bank of New York's report highlights increasing financial stress among lower-income Americans. This group is beginning to feel the effects of the withdrawal of government support programs that were in place during the coronavirus pandemic. Early delinquencies on car and credit card loans have started to rise, particularly in lower-income households, surpassing pre-pandemic levels. Even higher-income Americans are facing challenges with mortgages, auto loans, and credit cards.
Conversely, the labor market appears resilient, with the number of Americans filing new claims for unemployment benefits falling to the lowest level in nearly one and a half years. This decline suggests robust job growth, painting an optimistic picture of the economy. Such strength in the labor market could influence the Federal Reserve's interest rate decisions, potentially delaying cuts. The data points to a tight labor market, with companies hesitant to lay off workers, a trend consistent with labor market conditions during and after the COVID-19 pandemic.
For risk assets, this presents a complex scenario. The financial strain on lower-income households could lead to increased volatility in markets related to consumer spending and credit, such as retail and banking sectors. Delinquencies in auto and credit card loans might affect the financial industry, potentially increasing credit risk and impacting investor sentiment. On the other hand, the strong labor market data suggests robust consumer spending power, which could support the performance of risk assets, particularly in consumer-driven sectors.
Bitcoin
This week, the 10 spot Bitcoin ETFs witnessed their consecitive 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,the price rebounded to a high of $45,500. 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.
Top Gainers and Losers
As a top performer this week: Mantra with over a 176.8% gain. Mantra is a vertically integrated and regulatory compliant blockchain ecosystem
The worst performing asset this week is Monero, as this was unlisted from Binance this week.
Global Market cap
The total market capitalization of the cryptocurrency ecosystem grew this week, from $1.71 trillion to $1.88 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 $40.58 to $43.78, which is a 5.05% increase.
While the the Bitcoin ETF is now complete, the market has pivoted towards a neutral stance. We have decided to remainNeutral 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.
