Daily News | BTC Returns to Downward Trend, Market Waiting for Wednesday's CPI Data

2024-08-12, 04:25

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## Crypto Daily Digest: BTC spot ETF experienced significant outflows last week, and WBTC is facing a crisis of community trust
According to Farside Investor data, the overall net inflow of <a href="/fr/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> spot ETFs was nearly $90 million last Friday. Among them, Grayscale GBTC had an outflow of $77 million, while BlackRock IBIT had a small inflow of $9.6 million. Last week, there was a significant outflow of funds overall.

Last Friday, the overall net outflow of <a href="/fr/price/ethereum-eth" target="_blank" class="blog_inner_link">Ethereum</a> ETFs was nearly $16 million, and the outflow rate has significantly decreased. Last week, the Ethereum ETF had a cumulative net inflow of $104.8 million, and the overall trading volume remained relatively small.

**MakerDAO plans to reduce the size of WBTC collateral to address potential risks associated with changes in custody rights**

According to on-chain data monitoring, WBTC currently supports Ethereum/Base/Kave/<a href="/fr/price/osmosis-osmo" target="_blank" class="blog_inner_link">Osmosis</a>/<a href="/fr/price/tron-trx" target="_blank" class="blog_inner_link">Tron</a> networks, with Ethereum mainnet minting accounting for 99.8%. As of today, 154,726 WBTCs (worth $9.45 billion) have been minted, accounting for 0.78% of Bitcoin's total market cap. According to Dune panel data, over 41% of WBTCs are currently used in the lending ecosystem, with MakerDAO being the largest usage scenario (acceptors), and nearly 32% used for direct transactions. MakerDAO plans to launch a proposal to reduce the size of WBTC collateral in a vote scheduled for August 12.

**Federal Reserve Governor Bauman: The cooling of the labor market is exaggerated, and be cautious about interest rate cuts**

Federal Reserve Governor Bauman stated that inflation remains "uncomfortably" above target levels. There is an upward risk of inflation, and the labor market continues to strengthen, indicating that she may not be prepared to support interest rate cuts at the next meeting of US central bank officials in September. She said that the progress made in reducing inflation in May and June is welcome, but inflation remains above the committee's 2% target, which is unsettling. When considering adjusting the current policy stance, I will remain cautious. She also stated that the US fiscal policy, immigration pressures on the real estate market, and geopolitical risks could all bring upward pressure on housing prices, and the recent surge in unemployment to 4.3% may exaggerate the extent of the labor market cooling.

**Viewpoint: Crypto venture capital is slowing down its investment speed, holding BTC/ETH can yield considerable returns, and the lack of new narratives is the key reason**

Cinneamhain Ventures partner Adam Cochran posted on social media that there is a subtle reason why venture capital firms have significantly slowed down their investment in cryptocurrencies. Most venture capital firms have limited partners (LPs), who are primarily interested in returns beyond index funds. But in the medium term, simply holding Bitcoin and Ethereum can easily outperform index funds in terms of risk return ratio.

This allows venture capitalists to maintain a wait-and-see attitude towards Bitcoin and Ethereum, waiting for safer and more profitable opportunities, rather than taking on as much early-stage risk in startups as they do in other industries. Because there are no assets in other markets that provide holding returns like BTC or ETH. Adam Cochran stated that during the previous crypto cycle (2020-2024), venture capital firms "seemed very active" and hoped to make a fortune with participants by investing in "already explosive" applications. But currently, several known narratives (NFTs, AMM Fork, DeFi, L2s) have come to an end, and it is still unclear what the next steps should be.

## Market Trends
### Mainstream Coins
BTC: After experiencing a significant rebound last week, Bitcoin (BTC) has returned to its downward trend. This morning, BTC fell below $58,500 at one point, and the market sentiment is currently sluggish. It is worth noting that the net outflow of BTC spot ETFs in August was relatively large, which may have been an important factor leading to a price correction.

ETH: Ethereum has been declining since rebounding to $2,700 and is currently hovering around $2,550, returning to the price level at the beginning of this year. The decline of ETH also reflects the lack of strong upward momentum in the overall market.

Altcoins: Altcoins have generally declined, and there have been no obvious hot sectors. The overall market sentiment is relatively low, and investors lack confidence.
### Data Indicators
AHR999 Index: Today's AHR999 Index is 0.66, indicating that the current price is still a good point for buying in batches.

Fear & Greed Index: The current Fear & Greed Index is 25, indicating that market sentiment is still in a relatively low state.
### Market Hotspots:
<a href="/fr/price/solana-sol" target="_blank" class="blog_inner_link">Solana</a> Ecosystem: SOL rebounded from a low of $110 to above $160 last week, but then fell sharply on Sunday, dropping to $141 at one point. The Solana ecosystem's tokens no longer have strong performance, as previously strong rebounding tokens such as POPCAT and WIF have fallen sharply from their high points. It is rumored that Jump Crypto is a major investor behind SOL, and if Jump Crypto withdraws from the crypto field, it may bring more impact to SOL.

BTC ecosystem: The largest wrapped Bitcoin (WBTC) on the Ethereum chain received a major event update over the weekend, suspected to have been taken over by a company controlled by Justin Sun, causing community distrust. Meanwhile, the token T of Threshold Network, which issued fully decentralized Threshold Bitcoin (tBTC), has seen a significant increase, and the current price has fallen. It is worth noting that the historical circulation of WBTC exceeds 150,000.

The public chain Sui: SUI rebounded more than 100% from last week's low, becoming the best performing public chain token last week. On the news front, the rise of SUI benefits from the SUI Trust launched by Grayscale. In addition, SUI will receive a token unlock of $60 million on September 1st, which may have further impact on the price.

## Macroeconomics: Risk asset markets such as the US stock market await Wednesday's CPI data
Last Friday, the three major US stock indices collectively closed higher, with the S&P 500 index rising 0.47% to 5,344.16 points; The Dow Jones Industrial Average rose 0.13% to 39,497.54 points; The Nasdaq index rose 0.51% to 16,745.30 points. The benchmark 10-year Treasury yield is 3.94%, while the 2-year Treasury yield, which is most sensitive to the Federal Reserve policy rate, is 4.05%.

Among the popular US stocks, Apple rose 1.37%, Microsoft rose 0.83%, Nvidia fell 0.21%, Google C rose 0.95%, Google A rose 1.01%, Amazon rose 0.69%, Meta rose 1.60%, TSMC rose 1.56%, Tesla rose 0.58%, and AMD fell 1.50%.

Last week's intense market volatility caused the Chicago Board Options Exchange Volatility Index (VIX), which measures the volatility of the S&P 500 index (SPX), to reach its highest level since the peak of the pandemic in 2020. According to data from Citigroup, based on Put-Call Parity, traders expect the S&P 500 index to fluctuate by 1.2% in either direction when CPI data is released on Wednesday.
### Conclusion
Overall, BTC and ETH have returned to a downward trend, and the overall market sentiment is relatively sluggish. Although the AHR999 index and the Fear Greed index indicate that the current market is a good buying point, investors still need to operate cautiously and pay attention to further market trends.

The turbulence of Solana and BTC ecosystems, as well as the strong performance of public chain Sui, indicate the shift and volatility of market hotspots. In the foreseeable future, the market may continue to be affected by macroeconomic factors and policy changes. Before the release of the US CPI data on Wednesday, it is recommended that users adopt a wait-and-see approach.

<div class="blog-details-info">
<div>Author:**Icing**, 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>

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