Daily News | Bitcoin On-chain Trading Reached a New High; Farcaster Daily Activity Reached A New High; Over $200 Million APT Tokens Will Be Unlocked This Week

2024-02-05, 04:24

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## Crypto Daily Digest: <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> on-chain transactions hit new highs, Farcaster daily activity hit new highs

On February 5th, the latest news was that the Supreme Court of Elections in El Salvador announced the preliminary vote count for the election. The current President Nayib Bukele has successfully been re elected as President and is about to enter another five-year term. Nayib Bukele will take office on June 1st this year, becoming the first President of El Salvador to be re elected during the democratic period.

It is reported that Nayib Bukele has served as President since 2019. In 2021, El Salvador became the first country to adopt <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> as its legal tender.

Recently, CoinShares found that 75% of respondents believe Bitcoin and <a href="/price/ethereum-eth" target="_blank" class="blog_inner_link">Ethereum</a> have the most attractive growth prospects, according to its latest survey of digital asset fund managers. The proportion of digital assets in the investment portfolio has increased from 0.4% of the average respondent's portfolio to 1.3%, indicating an increasing allocation of digital assets, and this proportion is the highest since the first quarter of 2023.

Although regulatory issues remain at the top of the risk list, their importance continues to decline, with the combination of government bans and regulation decreasing from 63% six months ago to 50%.

According to The Block, in January 2024, Bitcoin worth a total of $1.21 trillion was transferred on the chain. This is the highest monthly trading volume since September 2022 (when Bitcoin was priced at approximately $20,000). The data also shows that except for December, the Bitcoin transaction volume in all other months of 2023 did not exceed $1 trillion.

On February 4th, according to data from on chain analysis company Glassnode, after Bitcoin spot ETFs were approved, the number of active network addresses dropped to a cyclical low of 219,000 per day (slightly rebounding to 221,000 this week).

This means that although the price of Bitcoin has risen, the growth of Bitcoin users has not shown the same upward trend. Analysis suggests that this is mainly due to an increase in activities related to Ordinals and in_script_ions, with many participants reusing Bitcoin addresses, thereby reducing the number of active addresses.

In addition, Dune's latest data shows that the cumulative cost revenue from the casting of Ordinals in_script_ions in the Bitcoin NFT protocol has reached 6,076.84 BTCs, equivalent to approximately $260 million. Currently, the total number of in_script_ions cast has exceeded 59,575,506.

In terms of market fluctuations, on February 4th, Sun Yuchen posted on the X platform stating that he would destroy 20 million HT worth $60 million, which were obtained through user exchange. It is reported that after the destruction operation is completed, the total circulation of HT will be reduced to 134 million. According to the latest market data from Gate.io, HT's 24-hour decline was -0.4%, with a quote of $2.96.

According to data from on chain analysis company Glassnode, despite the recent strong performance of Bitcoin spot ETFs, the market has experienced an opposite phenomenon to intuition, with the number of active entities falling to a cyclical low of 219,000 per day. This means that although Bitcoin prices have risen, the growth of Bitcoin users has not kept up.

Analysis suggests that this is mainly due to an increase in activities related to ordinal numbers and in_script_ions, with many participants repeatedly using Bitcoin addresses, thereby reducing the number of "active entities" (without double counting).

In addition, the daily active user (DAU) activity of the popular decentralized social protocol Farcaster has reached a historic high recently. The number of unique reactions is 24,733, the number of unique casts is 19,081, and the average daily tracking value is 10,697.

On February 5th, Token Unlocks data showed that this week, tokens such as APT, GAL, and HFT will experience a one-time large unlock, with a total release value of over $235 million. Among them:

GAL (Galxe) unlocked 2.03 million GAL tokens worth approximately $3.83 million at 0:00 (UTC) on February 5th, accounting for 2.26% of the circulating supply;

HFT (Hashflow) will unlock 13.62 million tokens worth approximately $4.25 million at 8:00 am on February 7th, accounting for 4.02% of the circulating supply;

APT (<a href="/price/aptos-apt" target="_blank" class="blog_inner_link">Aptos</a>) will unlock 24.84 million APT tokens worth approximately $228 million at 8pm on February 11th, accounting for 7.34% of the circulating supply.

## Macro: Expectations for interest rate cuts in March continue to decline, focus on Powell's speech on Monday of this week

The past week has been a tumultuous season for the global market.

The focus of the market has shifted to the Federal Reserve, and Federal Reserve Chairman Powell has said something that the market had little expected, namely that the March interest rate cut is not the "basic situation."

Despite a significant decrease in inflation rates, Powell downplayed speculation that interest rate cuts were imminent, believing that the Federal Reserve still did not fully believe that it had won the war. He pointed out that stable economic growth, flexible consumer spending, and a tight labor market may keep inflation rates above 2% for a period of time.

His message may be that interest rates will eventually decline, but not as quickly as the market hopes. Therefore, traders have reduced their bets on the March interest rate cut from 60% to around 35%.

The strong announcement on Friday hit the March interest rate cut expectations even harder, with the swap market showing a decrease in bets on the Federal Reserve's March rate cut and no longer fully pricing the Fed's interest rate cut in May.

However, the market has not changed its view on the total number of rate cuts this year, and believes that the Federal Reserve has only postponed the timing of rate cuts, with an expected nearly six more rate cuts this year.

Looking ahead, the main event of this week will be the ISM non manufacturing survey scheduled for release on Monday. This is one of the most important leading economic indicators for the US economy, with forecasts showing significant growth in January. If that's the case, the market may continue to lift some of the bets on the Fed's interest rate cut, helping the US dollar regain some momentum.

In addition, the Federal Reserve's Gullsby said last Friday that there are still "weeks and months" of US economic data to help determine when to cut interest rates, and the Federal Reserve will bring inflation back to its target of 2%, but will not seek to restore prices to pre inflation levels.

Gulsby believes that if the Federal Reserve wants prices to return to the levels of a few years ago, it really must reduce economic growth to achieve this, so "interest rate cuts are not within our consideration." Gulsby believes that only increasing progress, such as in inflation and employment, can make them feel at ease in achieving their goals.

This week, numerous Federal Reserve officials will be mobilized intensively, predicting that they will continue to undermine market expectations for the Fed's first rate cut in March. In addition, it cannot be ruled out that they may suppress market bets on the Fed's rate cut magnitude.

Powell will light up the "60 Minutes" section of CBS on Monday morning at 8 am Beijing time. Considering that CBS has already revealed that Powell will discuss the topic of interest rate cuts, if it once again suppresses market expectations of the Federal Reserve's interest rate cuts, it may trigger another correction in market pricing.

<div class="blog-details-info">
<div>Author:**Byron B.**, Gate.io Researcher
<div>Translator:Joy Z.
<div class="info-tips">\*This article represents only the views of the researcher and does not constitute any investment suggestions.
<div>\*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all cases, legal action will be taken due to copyright infringement.
</div>