Daily News | BTC’s Rise Triggers a Decline in Altcoins; JPMorgan Chase Revised BTC Production Costs to $45K; PancakeSwap Announced Payment of Interface Fees for Uniswap Users

2024-05-17, 03:56

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## Crypto Daily Digest: JPMorgan Chase revised BTC production costs to $45,000; PancakeSwap announced payment of interface fees for Uniswap users; DTCC and Chainlink complete the pilot of fund data tokenization
Firstly, let's take a look at the trading activities of <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> ETFs. According to Farside Investor data, on May 16, Grayscale Bitcoin spot ETFs (GBTC) continued to experience outflows of $4.6 million in funds. Meanwhile, Fidelity Bitcoin spot ETF (FBTC) inflow was $67.1 million, Bitwise Bitcoin spot ETF (BITB) inflow was $1.4 million, and ARK 21Shares Bitcoin spot ETF (ARKB) inflow was $62 million.

JPMorgan Chase recently adjusted its central estimate for Bitcoin production costs from the previous $42,000 to $45,000 due to changes in Bitcoin mining computing power.

JPMorgan analyst Nikolaos Panigirtzoglou pointed out in a report released on Thursday, "We previously expected a significant decrease in computing power after halving as unprofitable Bitcoin miners exit the Bitcoin network. Despite some delays, this seems to be happening." Analysts added that the current computing power and power consumption make their central estimate of Bitcoin production costs around $45,000, far below the current price (around $65,000).

In February, analysts estimated the cost of producing one Bitcoin to be $42,000. Therefore, they also estimate that once the excitement caused by halving after April subsides, the price target for Bitcoin will be $42,000. Panigrtzoglou added, "The estimation of production costs is a function of computing power and mining equipment efficiency, which are constantly changing after being halved."

On the other hand, the rune protocol has led to a temporary surge in Bitcoin transaction costs, providing income growth for miners. However, analysts pointed out in the report that the boost from runes was brief, and user activity and expenses have sharply declined in the past one or two weeks. This highlights the ongoing challenges Bitcoin miners face in maintaining sustainable sources of income, especially in the environment after halving.

Analysts point out that as the enthusiasm for rune protocols fades and the temporary driving force of Bitcoin miners weakens, the decrease in network power consumption exceeds the decrease in hash rates, indicating that unprofitable and inefficient miners are exiting.

The decentralized exchange <a href="/price/pancakeswap-cake" target="_blank" class="blog_inner_link">PancakeSwap</a> recently announced plans to pay up to $8 million in fees incurred by traders on its competitor <a href="/price/uniswap-uni" target="_blank" class="blog_inner_link">Uniswap</a>.

According to the plan, crypto traders participating in PancakeSwap v3 will receive a full interface fee refund for Uniswap v3 trading volume in a 1:1 ratio from May 16 to August 15. This move is due to Uniswap Labs increasing the cost of most interchangeable interfaces from 0.15% to 0.25% to alleviate the burden on users. The interface fee of Uniswap is the fee paid by traders when using the wallet interface of the protocol and network applications to perform token exchange.

To qualify for a refund, crypto traders must hold at least $5,000 worth of Packaged Bitcoin (WBTC) and Packaged <a href="/price/ethereum-eth" target="_blank" class="blog_inner_link">Ethereum</a> (WETH) pairs traded on the Uniswap Ethereum platform between January 1st and March 31st. Uniswap users can access the Dune dashboard of PancakeSwap to check their activity eligibility and need to fill out a form to apply for reimbursement.

The interface fee campaign of PancakeSwap v3 marks its latest effort to gain dominance from competitors. According to CoinGecko's data, based on daily trading volume, Pancakeswap currently ranks sixth in DEX, slightly behind Uniswap V3's $700 million trading volume.

The American Depositary Trust and Clearing Corporation (DTCC) has partnered with Chainlink to complete a pilot program to tokenize data for traditional financial funds, and has successfully partnered with several major US banking companies, including JPMorgan Chase and Bank of New York Mellon.

According to the DTCC report, the pilot project is called the Smart Asset Net Worth Pilot Program, which aims to standardize the use of Chainlink's Cross Chain Interoperability Protocol (CCIP) to provide cross-blockchain fund asset net worth (NAV) data. The report states, "By providing structured data on the chain and creating standard roles and processes, basic data can be embedded into various on-chain use cases, such as tokenized funds and 'bulk consumer' smart contracts, which hold data from multiple funds."

The results of this pilot project show that tokenizing fund data can support future industry exploration and support "numerous downstream use cases" such as brokerage applications, more automated data dissemination, and easier access to fund historical data.

DTCC also pointed out that the pilot project will help establish better-automated data management and has a limited impact on existing market practices of traditional financial institutions. In addition, the project also enables customers to retrieve historical data without manually saving records, and provides a broader API solution for price data.

## Market Trends: BTC has a dominant rate of 56%, NOT performance is not as expected
BTC broke through the $66,000 mark yesterday but then experienced a slight pullback, currently quoting $65,350. This pullback triggered a significant decline in Altcoins, and as a result, BTC's ruling rate further increased to 56%. In terms of macroeconomics, there has been a pullback in the US stock market, and the market generally expects a higher possibility of a rate cut in September.
### Market Hotspots:
Ton Ecosystem Popular Meme Project NOT Launched on Gate.io: Despite high expectations for its launch, its price performance is not as expected and has been close to halving since its peak. NOT is a fully circulating Meme token, with miners holding approximately 80% and a current market value of roughly $760 million, consistent with yesterday's forecast. The price performance of this project deserves further attention and may affect future investor confidence in Meme tokens.

Oracle chain <a href="/price/link-ln" target="_blank" class="blog_inner_link">LINK</a> skyrocketed: There are rumors that LINK is partnering with JP Morgan, and this news may become a driving factor for price increases. At the same time, the FTM of the public chain has also seen an increase, and its project team plans to upgrade Sonic in the third quarter, which may include a developer reward plan. This positive news may bring more investor attention to related projects.

ALEX and STX in the BTC ecosystem have plummeted: ALEX is a DEX project in the BTC ecosystem. Recently, the private key of funds has been stolen, and hackers have stolen STX for sale, resulting in a significant drop in the prices of related tokens. This incident serves as a warning for the security issues of BTC ecosystem projects, and investors need to be cautious about the investment risks of associated projects.

Against the backdrop of BTC price correction, the overall decline of Altcoins has led to a further increase in BTC's dominance. Investors must closely monitor market trends, adjust investment strategies promptly, and prevent investment risks.

## Macro: After the Dow Jones index hit the 40,000 milestone, the US stock market lost momentum, and the Asian market slightly declined
On May 16, the US stock market closed lower, as investors began to readjust their interest rate cut expectations as the Dow Jones index hit a historic milestone of 40,000 points for the first time. Despite data showing a slowdown in inflation, the early gains in the stock market subsequently dissipated, and the three major stock indices closed slightly lower.

The specific performance of the three major indexes: the Dow Jones index fell 0.10%; The Standard&Poor's index fell 0.21%; The Nasdaq index fell 0.26%. Despite the Federal Reserve's interest rate hike, the Dow Jones Industrial Average has rebounded since its low point in October 2022, driven by strong economic growth in the United States.

According to data from the FedWatch tool of the Chicago Mercantile Exchange, investors are betting that the Federal Reserve will cut interest rates twice this year and expect a 70% chance of the first rate cut in September.

The data shows that the consumer price increase in April was lower than expected, indicating that inflation has returned to a downward trend. On Wednesday, all three major Wall Street stock indexes set historical closing records. However, Thursday's data showed that the number of new applications for unemployment benefits in the United States decreased last week. Although employment growth is cooling down, the labor market remains tense.

On May 17th, Asian stock markets slightly declined, and traders were cautious when considering the path of US monetary policy. Federal Reserve officials have stated that although inflation shows early signs of slowing, interest rates may need to remain high for a longer period.

Wednesday's data showed that US consumer price inflation has cooled, prompting the market to quickly digest expectations of at least two interest rate cuts this year. However, the latest report shows that the labor market remains tense, and the central bank governor is cautious about inflation, which has led investors to doubt monetary policy.

Although this week's data provides two aspects of good news for the Federal Reserve, policymakers have yet to change their view that investors are confident that interest rate cuts will begin this year.

Regarding the currency market, the euro rose by about 1% against the US dollar, with the latest price at $1.08595. The USD/EUR exchange rate experienced its largest weekly decline since February, while the EUR/USD exchange rate rose by approximately 1%.

In the early trading session, the Japanese yen fell 0.23% against the US dollar to $155.80, taking back some of the gains made earlier this week after a mild US CPI report. As the Bank of Japan maintains loose monetary policy, while the rise in US interest rates attracts funds to US bonds and dollars, the yen has fallen by about 9.5% this year.

In terms of commodities, oil prices have risen during Asian trading hours, and the global benchmark Brent crude oil price is expected to see its first weekly increase in three weeks due to improved global demand and signs of slowing inflation in the largest oil-consuming country in the United States.

The price of US crude oil has remained almost unchanged, while the global benchmark Brent crude oil price has risen due to improved global demand and signs of slowing US inflation. The price of crude oil in the United States is $79.18 per barrel, while Brent crude oil has increased by 0.1% to $83.35 per barrel.

The price of gold remains high at $2,377.25 per ounce.

<div class="blog-details-info">
<div>Author:**Sherry S. & 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>