Bull market gone? Don’t panic, these plots in the second half of 2024 are still worth looking forward to

Author: Terry, Plain Language Blockchain

In the past two months, although there have been constant hot events of meme and Airdrop of top projects, the market has been in a rather strange depressed atmosphere - The howling of bears seems to be faintly audible, and the footsteps of bulls are close yet distant, and the market collapse and restart seem to be only a moment away.

This article aims to explore and sort out some fermentation events hidden in the market in the past two months, and at the same time look forward to the positive factors that may be overlooked in the future, and look forward to the main storyline that may take up the main responsibility in the second half of the year.

01BTC spot ETF inflow turns from negative to positive

The market always likes to overestimate the short-term effects of new things and underestimate their long-term influence. For the Bitcoin spot ETF, which has been launched for nearly half a year, there is a signal worth paying attention to recently:

According to SoSoValue data, Since mid-May, the Bitcoin spot ETF has still seen a new wave of capital inflows, which has lasted for nearly a month, and on June 4th it reached the second highest value in history of $886 million (second only to $1.05 billion on March 12th).

Although there has been a continuous decline since the beginning of this week, the overall situation has been significantly reversed compared with April-May. As of the time of writing (June 21), the total net asset value of the Bitcoin spot ETF was $56.24 billion, the ETF net asset ratio (market value to the total market value of Bitcoin) reached 4.39%, and the historical cumulative net inflow reached $14.67 billion.

02 Crypto Regulation Turns & Ethereum Spot ETF Accelerates Suddenly

The wind starts from the tip of the green ripples. In the context of the 2024 election year, the macro environment has been significantly improved both in terms of regulation and capital, brewing a new round of bullish catalysts (recommended reading "Trump and Biden compete to "win over Bitcoin", is the US crypto regulation about to turn the wheel?").

First, on May 22, the "21st Century Financial Innovation and Technology Act" (FIT21 Act) was passed by the House of Representatives with an overwhelming advantage of 279 votes to 136 votes, and then the U.S. Securities and Exchange Commission (SEC) officially approved 8 Ethereum spot ETFs on May 24. 19b-4 forms.

This means that the position of US regulators has begun to soften from tough, especially the expectation of Ethereum ETF has been greatly advanced through the node, and it seems that it is only a step away from the final launch.Interestingly, although the attitude change and approval speed of the US regulators this time are much faster than expected, looking back afterwards, it seems that there are some traces:

At least as early as around $3,000, giant whales such as Sun Yuchen began to accumulate ETH chips and firmly go long on the ETH/BTC exchange rate, which seems to indicate that there are already individuals/institutions with a keen sense of smell who are making early arrangements.

Most directly, ETH's performance in the secondary market has also swept away the previous decline and began to gradually strengthen. The most obvious change is the ETH/BTC exchange rate. Since October last year, ETH has been falling compared to BTC, and the ETH/BTC exchange rate has fallen from above 0.064 to below 0.045.

Since mid-May, the ETH/BTC exchange rate has begun to move out of the downward trend. In the past month, it has successively broken through the 0.05 and 0.055 levels, reaching a recent high of 0.058, which is relatively strong overall.

03 Traditional Web2 players accelerate their layout of Web3

On June 6, Robinhood officially announced that it would acquire the cryptocurrency trading platform Bitstamp for US$200 million to expand outside the United States. The two parties have reached an acquisition agreement, but it needs to be approved by regulators - compared to the acquisition price of US$400 million by NXMH, a subsidiary of South Korean company NXC in 2018, it is half lower, which is considered a big bargain.

As we all know, Robinhood is one of the most commonly used stock and crypto CEXs by US users, with 11 million monthly active users, and is even more popular than Coinbase in the field of crypto trading: Robinhood's transaction-based revenue in the first quarter of this year increased by 59% year-on-year to US$329 million, of which cryptocurrency revenue was US$126 million, a year-on-year increase of 232%, which is a very strong performance.

Bitstamp, founded in 2011, is the world's longest-running crypto CEX and is also considered one of the more compliant CEXs. It not only has business in Luxembourg, the United Kingdom, Slovenia, Singapore and the United States, but also has valid licenses and registrations in more than 50 countries/regions around the world, which can help Robinhood enter other regions for crypto business.

And this is almost a perfect complementary relationship - Robinhood's current market is mainly focused on the United States, while competitors Kraken and eToro have stronger businesses in Europe than it, so Bitstamp's 4 million users are not many, but almost most of them are in Europe, so it is a huge leap for Robinhood's European expansion.

It is worth noting that just one month ago, Robinhood received a Wells notice from the staff of the U.S. Securities and Exchange Commission (SEC) regarding topics such as RHC's crypto asset listing, custody and platform operations (RHC activities). Therefore, the acquisition of Bitstamp will expand Robinhood's global layout, thereby hedging the strong regulatory influence of the U.S. SEC and ensuring that it never leaves the table.

In addition, Fortune magazine predicts that this transaction will not only add about 4 million new crypto customers to Robinhood, but will also enable Robinhood to provide a wider range of cryptocurrency products to more institutional clients:

From the 15 tokens currently offered in the US market and more than 30 in Europe, to the more than 85 included in Bitstamp, Bitstamp’s diversified services (such as staking, stablecoins, trading, custody and prime brokerage) will also help Robinhood attract more institutional clients and potentially accelerate its expansion in the European market.

04 The macro environment blows the horn of easing

Although the CPI, PPI, non-farm data and other data in the United States have exceeded expectations many times in the past six months, and the Federal Reserve officials have begun to "take a tough stance", which has led to the market to start adjusting the expectations of interest rate cuts, but at least for now, inflation is basically coming to an end, and everyone is still cautiously optimistic about the Federal Reserve's interest rate cuts in the second half of the year.

FOMC permanent voting member, the third-in-command of the Federal Reserve, and the president of the New York Federal Reserve, John Williams, emphasized on Tuesday that any decision on the timing or extent of interest rate cuts this year will depend on the upcoming economic data. At the same time, Federal Reserve officials lowered their expectations for planned interest rate cuts this year, and the median official predicted that there would be only one interest rate cut.

However, the Canadian and European Central Banks, which are regarded as the vanguards of the Federal Reserve, took the lead in blowing the horn of turning and rushing to cut interest rates:

On June 5, the Bank of Canada cut interest rates from 5% to 4.75%, the first cut in 4 years;

On June 6, the European Central Bank cut interest rates from 4% to 3.75%, the first cut in 5 years;

In any case, the global interest rate cut trend has further accelerated, and favorable factors at the macro level are indeed accumulating.

05 Large payment/financial institutions return

In addition, not long ago, BN also allowed Mastercard users to purchase crypto assets on BN again, and BN-branded Visa cards have also been resumed on the trading platform. BN stated that the withdrawal service using Mastercard will be resumed later.

As early as March, MetaMask also reached a cooperation with Mastercard to test the first blockchain payment card. According to marketing materials, the MetaMask/Mastercard payment card, issued by Baanx, will be the "first truly decentralized Web3 payment solution", allowing users to use cryptocurrencies for daily consumption anywhere bank cards are accepted.

This will undoubtedly greatly solve the cognition and entry barriers of incremental users, and move towards the direction of no-feeling deposits and withdrawals (instant exchange of fiat currency and stablecoins), abstraction of usage experience to facilitate user use (account abstraction, close to Web2 payment experience), etc., especially opening up the link between cryptocurrencies and off-chain consumption scenarios, which is conducive to the anchoring of crypto assets with a wider asset pool.

06 Summary

In general, in this market environment where the market is still warm, there are still quite a lot of positive factors slowly fermenting, and as long as you observe carefully, you can still see confidence.

Although the bear's howl seems to be faintly audible and the bull's footsteps seem to be close yet far away, in this context, remaining cautiously optimistic, observing at all times and actively participating may be the only thing that can be done in the current market atmosphere.