Daily News | Bitcoin in US Election Spotlight, Brazil's CBDC Advances; AI Stocks Defy Economic Worries
Crypto Daily Digest: Bitcoin Takes Spotlight in 2024 US Election Amid Uncertainties; Brazil Advances with CBDC Pilot
Crypto investors remained cautious as positive unemployment and GDP data in the US were overshadowed by concerns over debt ceiling negotiations. Bitcoin (BTC) continued to trade below $27,000 but has risen by 2.4% since dropping as low as $25,870 within the past 24 hours.
Bitcoin’s narrow range is influenced by macroeconomic uncertainties and the ongoing stalemate regarding the debt limit. Meanwhile, Ether (ETH) and other major cryptocurrencies generally followed Bitcoin’s movements but have also seen slight gains within the past day. Tech stocks, on the other hand, experienced an uptick as Nvidia predicted increased sales driven by the growth of artificial intelligence.
Despite favorable economic indicators, the market remained largely unaffected, with the focus shifting to the ongoing debt limit negotiations. Market observers anticipate a resolution that could potentially propel Bitcoin to outperform. Currently, the market trend is characterized by sideways volatility, with participants eagerly awaiting the next major catalyst: the Bitcoin halving.
In other news, Digital Currency Group (DCG), a prominent digital-asset conglomerate, has announced the closure of its TradeBlock subsidiary, which provides services to institutional investors. The decision to shut down the institutional trading platform is attributed to the challenging regulatory environment for digital assets in the US and the overall state of the cryptocurrency market. DCG faces additional challenges stemming from the collapse of FTX and a missed debt payment to Genesis Global. Currently, DCG, Genesis Global, and creditors are engaged in settlement and restructuring talks, while DCG explores options for debt refinancing.
On the global front, the Central Bank of Brazil has taken a significant step towards the development of a central bank digital currency (CBDC) by selecting 14 institutions to participate in the pilot program for the digital Real. The list of participants includes major banks, the local stock exchange (B3), and multinational companies like Visa and Microsoft. Starting from mid-June 2023, these institutions will be incorporated into the Real Digital Pilot platform. The central bank received 36 interest proposals from over 100 institutions representing various financial sectors, signaling Brazil’s commitment to exploring the potential of digital currencies.
Meanwhile, Bitcoin has unexpectedly emerged as a topic of discussion in the upcoming 2024 US presidential election. Republican candidate Vivek Ramaswamy has positioned himself as the candidate with the deepest understanding of Bitcoin, criticizing fellow contender Ron DeSantis for his limited knowledge of the cryptocurrency. Ramaswamy considers Bitcoin a decentralized alternative to the US dollar and advocates for increased competition within the financial . If elected, he plans to reduce the headcount at the Federal Reserve and implement reforms within the Securities and Exchange Commission (SEC). Ramaswamy claims to be the first Republican candidate to accept Bitcoin donations, particularly via the Lightning Network. However, his chances of success in the race are considered slim compared to frontrunners like Donald Trump and Ron DeSantis.
Bitcoin (BTC) $26,472 (+0.54%) - Neutral Outlook
Overview:
- Closest hourly support zone: 26380 - 26285
- Closest hourly resistance zone: 26570 - 26690
- Key Level: 26285 (Weekly Close between Dec. 21-28, 2020)
Hourly Resistance zones
- 26570 - 26690
- 26790 - 26990
- 27080 - 27265
Hourly Support zones
- 26380 - 26285
- 26120 - 25900
- 25870 - 25818
Macro: AI Revolution Ignites Stock Markets, Defying Economic Concerns
Asian stocks are poised to receive a boost from positive developments in US debt-ceiling talks and the strong performance of US equities, particularly in the artificial intelligence (AI) sector. Japanese equity futures are on the rise, while Australian futures remain steady. Hong Kong markets are closed for a public holiday. The surge in US stocks was driven by a bullish sales forecast from Nvidia Corp., a prominent player in the AI industry. As a result, the tech-heavy Nasdaq 100 surged by 1.7%, and the S&P 500 recorded a 0.9% gain.
Nvidia’s impressive performance sent shockwaves through the market, as the company’s shares soared by a remarkable 24%, bringing its market value closer to the $1 trillion mark. The enthusiasm surrounding AI continued after-hours when Marvell Technology Inc. projected that its 2024 revenue from AI would at least double compared to the previous year.
The market’s Optimism surrounding promising tech stocks, including those in the AI sector, appears undeterred by concerns over China’s economic situation and the looming possibility of a catastrophic US debt default. Although Fitch Ratings issued a warning about the US’s AAA rating being under threat, it still expects politicians to reach a resolution before the deadline.
The ongoing debates over the debt ceiling in Washington contribute to the risks uated by Federal Reserve officials as they contemplate the possibility of pausing interest rate hikes. Meanwhile, Treasury bill yields for the upcoming month have inched higher as investors seek higher returns from securities perceived to be at greater risk of non-payment in the event of the government exceeding its borrowing capacity.
Market sentiment has also been influenced by mixed data, including a revised higher first-quarter GDP and fewer-than-expected jobless claims. These factors have led traders to fully anticipate another quarter-point interest rate increase in the near future.
However, the positive momentum in US equities stands in contrast to broader market conditions, which include stagnant interest rates, sluggish global economic growth, flat full-year earnings, and already decent stock valuations. As a result, some market analysts express caution regarding the sustainability of the overall market upward trend.
In Asian markets, concerns over China’s economic slowdown and ongoing financial troubles in the real estate sector have dampened sentiment. The Hang Seng Index dropped by 1.9%, and the yuan breached the closely-watched 7-per-dollar level.
The market’s focus has also shifted to the Bank of England, with traders increasing bets on the central bank’s continued interest rate hikes following an unexpectedly strong reading of UK inflation. Money markets are now pricing in more than 100 basis points of additional tightening by December.
