āøThe Fed is expected to maintain the rate at 4.5%
The FOMC statement emphasizes: āŖļøInflation remains high āŖļøRisks of both higher inflation and rising unemployment āŖļøQuantitative easing policy continues, inflation target of 2% confirmed āŖļøThe Fed is ready to adjust policy if necessary, but is not yet ready to pivot.
April has been successful for Bitcoin: +14.2% and the best month since March 2024. Ethereum, on the other hand, is disappointing ā another decline, this time -1.58%. This is already the fifth consecutive drop, something ETH has not experienced since 2018.
š Bitcoin outperformed gold and tech giants in April!
Since the beginning of the month, BTC has risen by 12%, surpassing gold and the shares of technology companies. Investors view it as an alternative hedge amid growing concerns about U.S. fiscal policy and institutional stability.
š Initially, tariff shocks caused a decline in the price of bitcoin along with other risky assets. However, soon the cryptocurrency diverged from the markets, sharply rising as long-term Treasury yields increased and investors sought protection from rising political risks.
š¦ In April, investors poured around $2.9 billion into Bitcoin exchange-traded funds listed in the U.S., marking a sharp turnaround compared to March and February, when net outflows from the funds totaled $811 million and $3.6 billion respectively.
š® A strategic reallocation of assets away from U.S. assets is expected to fuel the next rise of Bitcoin. The protective properties of bitcoin are becoming increasingly relevant as investors face a whole range of risks: from shocks in the private sector to threats from the public sector.
Investors poured $3 billion into Bitcoin ETFs in a week!
Last week, exchange-traded funds tracking Bitcoin and Ethereum attracted over $3.2 billion. The leader was the iShares Bitcoin Trust ETF (IBIT), which received an inflow of nearly $1.5 billion ā a record volume this year.
Other funds also recorded significant inflows: - ARK 21Shares Bitcoin ETF (ARKB): over $620 million - Fidelity Wise Origin Bitcoin Fund (FBTC): about $574 million
Ethereum products noted their first net weekly inflow since February. The rally comes amid a rise in risk assets, including the S&P 500, which rose 4.6% last week due to optimism about potential tariff agreements.
Crypto enthusiasts point to Bitcoin's resilience compared to stocks during President Donald Trump's trade war and the subsequent turmoil in financial markets. This year, the token has remained stable despite a nearly 6% drop in the S&P 500, which reignites discussions about Bitcoin as "digital gold" ā a new type of safe haven.
The Fed kept the interest rate at 4.5% forecast: 4.5% previous: 4.5% ā¶ļøKey points from Jay Powell's speech: āŖļøThe economy in the U.S. is strong. āŖļøThe Fed will slow down the pace of balance sheet reduction. āŖļøEconomic uncertainty has increased. āŖļøInflation expectations have risen slightly due to tariffs, long-term expectations also remain aimed at 2%. āŖļøThere is no rush to make a decision on the Fed's rate; we are ready to wait for greater clarity. āŖļøThe new U.S. administration is implementing changes in policy. If the economy remains strong, we may be able to maintain restraint in policy for a longer period. āŖļøWe may soften the Fed's monetary policy if the labor market weakens. āŖļøInflation is rising due to changes in trade policy. āŖļøFed chairpersons issued forecasts similar to the last time. āŖļøIf the Fed's dual mandate goals need to be balanced, it is a challenging task, but the situation is different now. āŖļøAnalysts have raised the likelihood of a recession in the U.S., but it remains low. āŖļøNow is the right time to slow down the pace of balance sheet reduction. We are still far from the level needed to stop the Fed's balance sheet reduction. āŖļøI see no reason to believe that we are witnessing a repeat of the 1970s.
ā”ļøStrategy will raise ~ $500 million to purchase bitcoin through stock placement
Company Strategy (formerly MicroStrategy) plans to place an additional 5 million Class A preferred shares at a price of $100 each. All proceeds from the placement will be used for corporate purposes, including the acquisition of bitcoins.
š Dividends: The shares will provide fixed dividends of 10% per annum, which will be paid quarterly in cash. The company also reserves the right to buy back some or all of the share issuance.
š° New purchase: The company recently acquired 130 BTC for $10.7 million, which is the smallest bitcoin acquisition since the launch of their bitcoin strategy in August 2020.
š¹ Considering the latest transaction, the total accumulated BTC by Strategy amounted to 499,226 BTC.
š„ The company continues to increase its bitcoin reserves, and this could be an important signal for the cryptocurrency market! Attention, traders and investors!
On March 17, the largest regulated derivatives exchange, CME Group, will launch futures on Solana (SOL), pending approval from regulators.
š„ What will be available? - Microcontracts ā 25 SOL - Standard contracts ā 500 SOL
š„ Why is this needed? The launch of futures on Solana is a response to the growing interest from clients looking to hedge risks using regulated instruments. Solana continues to gain popularity among developers and investors, and the new derivatives will provide a convenient way to manage risks in the crypto market.
š” What could this mean for the future? This launch of futures is an important step toward the possible approval of spot ETFs on Solana. The SEC traditionally views the presence of a regulated futures market as a key factor for approving spot ETFs, opening up prospects for new investments and expanding opportunities for investors.
ā³ What's next? Regulators are likely to monitor trading activity on CME for several months before making a final decision. This could lead to increased interest and liquidity in the Solana market.
šØChances of approval for the ETF on Litecoin and Dogecoin in the USA have reached 90% and 75%!šØ
š What does this mean for k
šØChances of approval for the ETF on Litecoin and Dogecoin in the USA have reached 90% and 75%!šØ
š What does this mean for cryptocurrencies? Bloomberg analysts predict that the chances of approval for the Litecoin (LTC) ETF in the coming months are 90%, and for Dogecoin (DOGE) ā 75%! This data was provided by analyst James Seyffart. We remind you that he and his colleague Eric Balchunas accurately predicted the launch of spot Bitcoin ETFs in 2024.
What is the situation today in the cryptocurrency market, February 7, 2025.
š Bitcoin (BTC) is trading around $97,936, showing an increase of 1.27% over the last 24 hours. The day's high was $100,186, and the low was $95,761.
š¹Ethereum (ETH) is also demonstrating positive dynamics, trading at $2,835.
š§ŖThe market is gradually recovering after recent volatility.
šThe Fear and Greed Index for BTC is at a neutral level of 54, indicating balanced sentiments among investors.
šŗš¦ In Ukraine, the legalization of cryptocurrency is expected by the summer of 2025, which could attract new participants to the market.
I recommend closely monitoring the news and being prepared for possible changes in the market.
āøThe Fed keeps the rate at the same level of 4.5% Previous: 4.5% Expected: 4.5%
ā¶ļøKey points from Jerome Powell's speech: āŖļøJerome Powell confirmed the strength of the U.S. economy, noting that inflation is gradually approaching the target of 2%, although it remains relatively high. āŖļøHe emphasized that labor market conditions are balanced, with stable unemployment, indicating that the labor market is not contributing to inflation. Additionally, he assured that inflation expectations remain firmly anchored. āŖļøPowell stated that while the recent rate cut was appropriate, there is no urgency for further cuts as the economy remains resilient. āŖļøLooking ahead, he confirmed that the Fed will conduct five-year planning in 2025 but indicated that changing the inflation target of 2% is not under discussion. āŖļøIn response to a question about recent calls from Trump for rate cuts, Powell declined to comment, stating that the Fed will focus on its work. He also noted that he had not received any direct communication from him.
Highlights from Jerome Powell's Press Conference (FOMC)
ā”ļø The U.S. economy remains strong, with GDP potentially exceeding 2% in 2024. ā”ļø Inflation is approaching the target level, but is still somewhat elevated. ā”ļø There is no rush to lower interest rates. ā”ļø The Fed is focused on real progress in inflation and the labor market before taking further steps. ā”ļø Forecasts are uncertain due to potential changes in the new administration's policy. ā”ļø The U.S. is gradually moving away from dependency on trade with China. ā”ļø Artificial intelligence is becoming an important factor for the stock market. ā”ļø There is no need to wait for 2% inflation to begin lowering rates. ā”ļø Assets in the market are overvalued by many metrics. ā”ļø Banks may work with cryptocurrencies with proper risk management.
Overall, the Fed maintains a wait-and-see position, noting that further changes in rates depend on macroeconomic data.
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