Market Weekly: Observational Sentiment Before Bitcoin Halving

Recently, the Federal Reserve's cautious stance on interest rate cuts has triggered a decline in the cryptocurrency market. This trend is also reflected in stocks and other risk assets. The market's expectations for interest rate cuts before the end of the year are even more hawkish than the Federal Reserve's, anticipating that year-end rates will be higher than previously predicted.

In this environment, gold has become the biggest winner, reaching a new high in price. It is worth noting that the appreciation of gold is usually associated with interest rate cuts and rising inflation rates. The performance of gold may suggest that the market's concerns about rising inflation outweigh its focus on changes in interest rates.

Bitcoin's status as "digital gold" is increasingly solidifying, which may attract a new group of investors. Compared to the past, even during price fluctuations, the market may see more aggressive buying behavior. The launch of the U.S. spot Bitcoin ETF provides a broader funding channel for Bitcoin, helping to curb volatility.

The impact of these ETFs can be seen in the open interest of Bitcoin futures. The open interest in CME Bitcoin futures has surpassed that of any single centralized exchange, accounting for more than one-third of the total Bitcoin futures market. The capital released by the ETFs may represent the most fundamental shift in market structure since the 2020-2021 cycle.

Considering these factors, along with the upcoming Bitcoin Halving expected to occur from April 20 to 21, (, we remain optimistic about the market performance in the second quarter.

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On-chain Dynamics: A New Chapter for Maker

Maker has performed exceptionally well recently, mainly due to the announcement of its Endgame plan. This plan includes four main phases, involving aspects such as token restructuring, governance reform, and asset bridge construction. As details gradually become clear, market speculation about possible future airdrops has also increased.

The revolution of Maker reflects the ongoing innovation of DeFi protocols to enhance competitiveness. Although these established protocols may be considered relatively conservative, their strong liquidity network effects enable them to drive innovation more effectively.

However, some governance proposals quickly passed by Maker have also sparked controversy. Some believe these changes were too rushed and increased risks. The Aave community is even discussing whether to remove the option of using DAI as collateral.

This controversy may signal a shift in the decentralized stablecoin market. Compared to DAI, Ethena's USDe has quickly gained market share due to its higher yield and airdrop incentives. However, both assets face supply constraints.

Despite the increasing number and market value of decentralized stablecoins, their growth rate is not as fast as that of centralized stablecoins. The market share of USDC and USDT has risen to 90%. Considering the advantages of centralized stablecoins in cross-chain issuance and user experience, the adoption of decentralized stablecoins may still face challenges.

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Market Data

Bitcoin price: $68,765 Ethereum price: $3,375 Gold spot price: 2,286 USD S&P 500 Index: 5,151 points

The net inflow of the US spot Bitcoin ETF this month: $4.7 billion Net inflow from the beginning of the year to date: 12.2 billion USD Total assets under management: 54.9 billion USD Amount of Bitcoin held: 830,000 coins

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Exchange Insights

The market has been relatively calm over the past week. Bitcoin has been fluctuating within the $2000 range, and while the inflow of funds into the US spot ETF is positive, it has slowed down. Overall, the trading volume of cryptocurrencies continues to decline, and the market seems to be searching for new upward momentum.

The risk of long positions has eased, with the funding rates for Bitcoin, Ethereum, and various tokens approaching this year's low points. The upcoming Bitcoin Halving may act as a catalyst for price increases, but there is still the need to face the weak trend of the overall risk asset market.

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Industry News Overview

• The monthly trading volume of spot Bitcoin ETFs in March increased nearly twofold, reaching 111 billion USD.
• The TRON Foundation and Justin Sun request the U.S. court to dismiss the SEC lawsuit.
• Ethena token listed and airdrop claim opened
• Vitalik Buterin and Arthur Hayes commented on the Meme coin craze
• Hong Kong financial company VSFG plans to launch a spot Bitcoin ETF as early as May.
• HSBC launches tokenized gold products for Hong Kong retail investors
• Singapore expands cryptocurrency regulation, enhancing user protection
• Taiwan approved the establishment of a cryptocurrency industry association

In the coming week, the market will focus on important events such as the US CPI data, the European Central Bank interest rate decision, and the financial reports of several large banks.

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