Bitfinex alpha | Bulls return to Bitcoin

May 12th Bitfinex alpha | Bulls return to Bitcoin

Bitcoin has regained its $100,000 mark for the first time in over three months, showing new strength after a 32% drop from its all-time high in January. Driven by macro tail winding. This eases tariff tensions and includes a disrupted shift in the Fed’s tone – breakouts coinciding with a wider risk-on shift, with BTC surpassing stocks.

Importantly, the capital turnover into Bitcoin appears to last, as reflected in the realisation cap reaching a new all-time high and ETF inflow of over $920 million over the past two weeks. Also, chain data confirms that over 3 million BTC returns to profit and a significant drop in coins held in losses. Coupled with rising spot volume and institution-driven ETF flow, Bitcoin is currently sitting on a structurally solid footing. As long as the macro conditions remain supportive, short-term dips are likely to be absorbed quickly, enhancing upward bias and adequately positioning potential new legs towards fresh heights.

In the meantime, the Federal Reserve has stabilized interest rates as concerns grew over both increased inflation and unemployment. Fed Chairman Jerome Powell highlights the uncertainty surrounding the economic outlook, noting that the Fed needs more data before deciding on further policy measures. Despite market expectations for interest rate cuts by July, the Fed is cautious and prioritizes price stability over quick response to slowing growth.

In the energy sector, crude oil prices have plummeted due to the shift to OPEC+ production targets, but US gasoline prices remain solid due to their tight refinement capabilities and seasonal demand. This difference, driven by the widening bottlenecks of refining and crack spread, suggests that these supply problems can be resolved and retail fuel costs can only be eased when oil prices are low.

Despite a decline in some commodities, such as British vehicles and US agricultural exports, the highly regarded US-UK trade agreement also offers limited economic relief. However, the transaction does not have a comprehensive scope and the wider trade challenges remain unresolved.

In addition to economic tensions, U.S. labor productivity fell for the first time in nearly three years, but units’ labor costs increased, exacerbated by tariffs and trade disruptions. Companies struggle with rising compensation costs and lower efficiency, which could lead to tougher margins and hesitant investments unless productivity recovers or trade tensions are alleviated.

The crypto sector remains political and regulatory hurdles, but it shows an increasing institutional and government interest in the crypto market. New Hampshire took a bold step into financial innovation and became the first US nation to enact laws that allowed investment in cryptocurrencies and precious metals. The move reflects the growing momentum at the state level regarding digital assets integration in the debate of evolving national policy.

Meanwhile, Washington’s legislative burglars continue. The US Senate narrowly failed to advance the Genius Act by voting 48-49, with three senators not voting and filed an allegation to reconsider the submission. This underscores the current challenges in reaching bipartisan consensus on laws focusing on key economic and innovation. In the private sector, BlackRock has deepened its regulatory involvement by meetings with the SEC and discussing the introduction of Crypto ETFs and refinement of options trading rules. The conference marks a significant development in Crypto Asset Regulation, with BlackRock advocating for staking Ethereum-based ETFs and a wider range of product features. It also reflects the changing tone of regulatory regulations as the SEC becomes more proactive in shaping the digital asset space.