News

CCM Blockchain Newsletter (June 8, 2024)

Bitcoin ETFs pulled in $1.7 billion last week.

08 Jun 2024 — 2 min read

Macro Market Updates

All major indices traded up in May despite ongoing inflation concerns and softer economic data
Post earnings performance from the Magnificent 7 boosted market sentiment

The ISM (Institute for Supply Chain Management) employment outlook indices are below 50 (green horizontal line), suggesting weakness in the labor market
The last three times it has fallen below 50 have led to recessions

Economic data was somewhat softer in May
- April’s retail sales declined
- ISM manufacturing and services came in weaker-than-expected
- Consumer sentiment, however, rose after three months of decline
Inflation data showed signs of a continuing disinflationary trajectory
- April CPI was in line with expectations and core PCE price index hit the lowest mark in 3 years
There were no changes in market expectations for rate cuts, which are expected to start in Sept ‘24
- Fed speak remained hawkish but reflected greater confidence that inflation is moving back towards the 2% target

On Wednesday, June 5^th, Canada became the first G7 nation to cut its key policy rate – by 25bps
On Thursday, June 6^th, the European Central Bank confirmed a broadly expected reduction in its key rate – also by 25 bps
While markets had priced in these policy changes, we expect that this is the beginning of a new liquidity cycle, some of which we are already starting to see play out in commodities such as gold and silver

ETF Inflows Resurge Last Week

Bitcoin ETFs drew in their best day since March as price topped $71k last week, drawing over $1.7 billion just last week alone
The strong upward pressure is being met by miners and longer-term holders cashing out
The ETFs now hold over 878k BTC or ~$61 billion using $69.4k / BTC ratio – this amounts to ~5.2% of all BTC in circulation
All while BTC balances on exchanges continue to draw down