Bitcoin lags even as spot BTC ETFs draw investor interest

Hola folks!

Welcome back to another edition of Switch Weekly, as we take a close look at how the crypto market fared last week. But amid the downturn, there is a silver lining, as we will explain. Even as Bitcoin struggles to break the $60,000 barrier, the broader US economy is flashing green. 

Want to know more about what happened in the crypto sphere in the past week? We bring you a recap of significant developments and news that could potentially impact the crypto market and the price of your favorite crypto.

Bitcoin prices remained subdued, struggling to reach the $60,000 mark and trending downward. Despite Bitcoin's lackluster performance, the broader economic indicators in the US are signaling positive momentum. The latest Consumer Price Index (CPI) and job data show that the US economy is on track, with no immediate signs of a recession. This has fueled expectations of a soft landing, as the Federal Reserve might shift towards a 25 basis point rate cut in the upcoming FOMC meeting. In response, stock markets have surged, and gold has reached an all-time high. However, Bitcoin, often referred to as "digital gold," has not mirrored this performance, remaining in a downward trend.

On the on-chain side, despite Bitcoin dropping 21% from its all-time high, As much as 75% of Bitcoin supply held in wallets has remained unmoved for the last six months. This indicates that whales are still holding strong, suggesting confidence among large investors despite recent price declines. Meanwhile, the memecoin craze has notably cooled off, with approximately $20 billion wiped from the market since May. Both search interest and market values for these coins have dropped significantly, marking a shift in investor sentiment away from high-risk meme coins.

In contrast, Spot Bitcoin ETFs continue to attract investor interest despite some outflows in August. Positive inflows from major players like Fidelity and BlackRock underscore the growing confidence in these investment vehicles. Historical cumulative net inflows have reached $17.37 billion, further illustrating the growing acceptance and integration of spot Bitcoin ETFs in the broader investment landscape. Notably, an August 14th U.S. Securities and Exchange Commission filing reveals that Morgan Stanley holds $188 million worth of shares in a spot Bitcoin ETF, highlighting significant institutional interest.

For a few altcoins, the past week has been particularly strong as they rebounded from their lows. Toncoin and its ecosystem have seen significant growth, driven by the expansion of its DeFi ecosystem and the upcoming Binance Launchpool addition. Additionally, certain gaming tokens on Binance have experienced impressive gains, signaling a renewed interest in the sector.

While Bitcoin's current price action might appear discouraging, the combination of strong economic indicators, ongoing institutional interest, and resilient long-term holders suggests that a market turnaround could be on the horizon, especially as the market awaits the upcoming FOMC decision.

• TON $6.81 ⏫7.29% (7d)

• BTC $58,576  ⏬ 0.42% (7d)

• SOL $142 ⏬3.44% (7d)

• TRON $0.1359 ⏫6.37% (7d)

(All data here is as of 1.50 p.m., 19 August 2024)

Before we conclude, here’s a quick look at some important news from around the crypto world.

• Several days of mostly quiet price action came to a fast end during US trading hours on Aug.15, with cryptocurrencies suddenly plunging and sending bitcoin (BTC) to its weakest level after the early August market panic. As of Aug 19, Bitcoin was changing hands at $58,487.20. However, it appears macro factors are not at play as stock markets are up again, with the Nasdaq and S&P 500 both more than erasing early August declines. (Source: CoinDesk) 

• Defiance ETFs has launched MSTX, the first single-stock leveraged long exchange-traded fund (ETF) for MicroStrategy to be approved for trading in the US. MSTX seeks to provide 175% long daily targeted exposure to MicroStrategy, according to a press release. The approval of the ETF by the US SEC could provide greater leveraged exposure to bitcoin for US-based traders, according to Defiance CEO Sylvia Jablonski. (Source: The Block)

That’s it for now. Thanks for sticking around.

See you later, folks! 👋

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