Mar 01
Week 9, 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. prices saw an uptick, primarily driven by a significant rise in the cost of services such as housing and finance. Despite this increase, the year-on-year inflation rate marked its smallest growth in three years, suggesting a gradual cooling of inflation. This development keeps the possibility of a mid-year interest rate cut by the Federal Reserve on the table. However, consumer spending showed signs of slowing down, affected by reduced spending on goods like motor vehicles, furniture, and other durable household items.
The Commerce Department's report highlighted that the inflation and consumer spending figures met economists' expectations. Yet, the notable rise in service costs, the largest in 12 months, introduces some uncertainty regarding the timing of the Federal Reserve's first rate cut. The increase in service prices, which encompasses sectors such as healthcare, restaurants, and recreation, is particularly significant as these areas are central to the Fed's efforts to combat inflation. Despite the January spike, officials are not in a hurry to reduce borrowing costs.
Over the past 12 months, PCE inflation climbed to 2.4%, the lowest annual increase since February 2021. This trend aligns with the recent consumer and producer price increases, attributed to the year's start. The core PCE price index, which excludes food and energy, saw a 0.4% increase, the most significant monthly rise since the previous February. This was supported by a 0.6% increase in housing and utilities costs and a 1.3% surge in financial services and insurance, likely reflecting higher share prices.
As core inflation rose by 2.8% year-on-year in January, marking the smallest increase since March 2021, the Federal Reserve continues to monitor these measures closely against its 2% inflation target. Achieving monthly inflation rates of around 0.2% is deemed necessary to return inflation to this target. Meanwhile, the stock market responded positively, with most stocks trading higher, the dollar weakening against other major currencies, and U.S. Treasury prices increasing.
Bitcoin
This week has seen U.S. Bitcoin ETFs breaking volume records, with a staggering $7.6 billion reported by market close on Wednesday, surpassing previous highs, as per Bloomberg. BlackRock's Bitcoin ETF, trading as IBIT, led with about $3.3 billion of this volume. Notably, IBIT had already surpassed $2.2 billion in volume by 1 pm ET on the same day. Fidelity's ETF, under the ticker FBTC, recorded around $1.4 billion, while Grayscale's ETF, GBTC, saw $1.8 billion in volume. These ETFs, which only began trading in January, have consistently posted high volumes throughout the week. IBIT, for instance, broke its volume records on both Monday and Tuesday, reaching $1.3 billion the day before the record-breaking Wednesday.
The enthusiasm for Bitcoin ETFs comes as Bitcoin's price neared record highs on Wednesday, reaching around $60,000 at the time of reporting. Bitcoin had peaked at $64,000 before dialing back to $61,000, with its all-time high at approximately $69,000. This surge in ETF volumes and Bitcoin's price performance underscores the growing mainstream acceptance and enthusiasm for cryptocurrency investments.
Top Gainers and Losers
As a top performer this week: DogWifHat with over a 196.1% gain. The memecoin sector seems to have been the biggest winner this week.
The worst performing asset this week is SiaCoin, but the Modularity sector seems to be falling quite a bit. Could be an opportunity to buy
Global Market cap
The total market capitalization of the cryptocurrency ecosystem grew this week, from $2.05trillion to $2.3 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 $50.55 to $59.12, which is a 15.74% 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 decided to rebalance our vault towards some more alt exposure. 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.
