March 18 Bitfinex Alpha | Bitcoin ETF inflows are moderate, but altcoins are not losing their luster
In Bitfinex Alpha
After reaching a new all-time high of $73,666 on March 14, Bitcoin saw a decline of more than 12.5%, in what was one of the largest price declines since the launch of Bitcoin ETFs in early January. While spot Bitcoin ETFs saw unprecedented inflows, surpassing $1 billion in a single day last week, the recent stabilization in flows has given the market some pause. It would not be surprising to see a period now where the market seeks some balance after the initial enthusiasm we saw. Flow data from next week will be crucial in highlighting TradFi investor sentiment towards Bitcoin, especially their reaction to last week's sharp corrections.
In contrast, the altcoin market has shown remarkable composure in the face of Bitcoin's volatility. The Total3 index reached a new session high, indicating increasing investment flows into alternative stocks. This resilience is reflected in significant inflows into Ethereum and other layer-one (L1) blockchain projects, despite Ether's disappointing performance against BTC.
However, there is an increasingly bullish narrative for Ethereum and Ethereum as evidenced by record inflows of ETH from exchanges, and the growing popularity and valuation of layer 2 ecosystems like Base, which has seen its total value locked (TVL) double in recent times. Weeks. As we look to the future, the performance of large-cap altcoins, especially those with their own ecosystems, will be crucial in understanding the direction of the market.
In the macro world, the February CPI report dealt a blow to hopes for an early easing of monetary policy in the US, as a 0.4% increase in the CPI indicated continuing inflationary pressures, especially in gasoline and shelter costs.
However, retail sales in February provided a silver lining, showing that the consumer remains unconstrained by higher interest rates. A 0.6% increase indicates strong consumer spending, supported by a strong labor market. However, persistent inflationary pressures, as evidenced by rising producer prices and strong utility expenditures, mean the Fed needs to remain cautious about cutting too early.
In the world of cryptocurrencies, a British court presided over a landmark legal decision in Craig Wright's claim to be Satoshi Nakamoto, the pseudonymous creator of Bitcoin. Not only does this ruling clarify Wright's lack of involvement in the creation of Bitcoin, but it also has important implications for his ongoing legal battles within the cryptocurrency community.
Meanwhile, in Thailand, regulatory amendments have opened the door for institutional investors and “ultra-high-net-worth individuals” to access private funds that invest in U.S. Bitcoin ETFs, classifying these stocks as securities. While this move indicates Thailand's progressive stance towards integrating digital assets into its financial ecosystem, it simultaneously highlights the challenges faced by retail investors in accessing emerging investment opportunities in the digital assets space.
Have a good trading week!
