Macro data increases volatility around US$24k BTC

FOMC’s minutes had a mixed impact on the market with conflicting interpretations causing more volatility to Bitcoin prices
Macro data increases volatility around US$24k BTC

February 23, 2023 - At the end of the day, the FOMC’s minutes had a mixed impact on the market with some investors reading a narrative of rate hikes deceleration, while others seeing a still hawkish Fed. Not surprisingly, such conflicting interpretations caused more volatility to Bitcoin prices, which fluctuated ~US$1k around the US$24k level in the last 24h. The FOMC’s minutes also pointed out that the personal consumption expenditures (PCE) in 12 months has been declining, which was confirmed by the release of core PCE this morning, although above-than-expected by the market. In our view, the recent wave of macro data underscored the Fed’s narrative of rate hikes deceleration as inflation declines slowly but surely.

Coinbase’s Q42022 earnings release reflected a tough environment for crypto on the back of a bear market worsened by FTX collapse. However, it also shed light on the public adoption of cryptocurrencies with investors concerned about the market volatility, in general, and governance of CEXs, in particular. Despite all the negative newsflow that increased in late 2022, the adoption of digital assets has been resilient, and set to recover soon. A study from BIS showed that crypto adoption increased in bull runs, which could occur sooner rather than later. At, governance and the clients resources safety are core values, which are reflected in our partnerships with renowned names as Fireblocks and Nasdaq.

Despite the crypto resilience, the US regulators are increasing their scrutiny over the industry, as expected, after the FTX collapse last year. However, some divergent voices are questioning the SEC’s approach against the staking service, for example, such as Timothy Massad, former CFTC chairman, who demands more clarity from the agency. Contrarily, Hong Kong is changing its regulation for cryptocurrency-related service providers trying to regain its international crypto hub status, according to industry experts told Forkast. We think that this will be the result of a restricted regulation from US regulators, which could move the industry to crypto-friendly jurisdictions.

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