Less than six months away from its 15th birthday, Bitcoin seems to have entered a phase of adolescence. Much like angry teenagers striving for acknowledgment and independence by moving out of their parents’ home, BTC has separated from some of its next-of-kin.
Recent data shows that the 90-day rolling correlation between Bitcoin's price and the U.S. stock markets, particularly Nasdaq and S&P 500, has reached its lowest level in two years, indicating that Bitcoin's performance is no longer dependent on stock market sentiment.
What this could mean for the crypto community, is that Bitcoin could potentially display unprecedented freedom in its future price formation and be less dependent on traditional entities in the finance and technology sectors.
That impressive performance is undoubtedly supported by the filing of spot Bitcoin exchange-traded funds (ETFs) from major financial institutions like BlackRock and Fidelity with the top cryptocurrency up 25% since BlackRock's filing on June 15.
But with this new independence comes great responsibility – value storage and protection, cross-border capital transfers, micro-payments, and even NFT art are all prospective career paths for this young asset. It’s the beacon of revolution in personal financial independence that the community should look up to – much like a teenager wanting the world to be a better place.
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An Often-Overlooked Crypto Heavyweight Shines
Who doesn’t love when it all comes together for the underdog to take on the ruling establishment? This is what’s happening with Litecoin, one of the oldest cryptocurrencies in existence, as it gets closer to a halving event scheduled this August 2.
Dubbed “digital silver” by some, Litecoin has made a stunning comeback amid a greedy, yet fragile market sentiment. Its price has almost doubled Y/Y, with a 60% spike in the past two weeks.
Litecoin's recent upgrade, the MimbleWimble Extension Block, and its favorable regulatory positioning as a Bitcoin spin-off also played a role as LTC returned into the top 10 digital assets by market cap.
LTC has emerged as one of the best performers in tough markets – it is among the select few cryptocurrencies which have actually outperformed BTC since 2017.
The US Federal Reserve policymakers have decided to take a breather this month and are holding on raising interest rates at their June meeting. But there is a slight catch: the Federal Open Market Committee is also predicting a mild economic recession towards the end of 2023. A gradual recovery would follow it and it would be neither “deep nor prolonged,” reports say.
This hesitation to continue raising interest rates to counter inflation showcases the difficulties the US central bank faces in bringing it down to the desired 2% level – a hawkish, overly aggressive approach could put pressure on consumers, leading to personal credit and mortgage defaults. And that could really break things up economically, so we best land softly this time.
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UAE Seizes Miner Opportunities
The Middle East continues to put in efforts to establish itself as a global crypto hub. This week, we focus on the telltale signs the United Arab Emirates could potentially become a go-to Bitcoin mining destination:
The UAE boasts over 30 free trade zones and a growing contribution to the Bitcoin mining hash rate.
Marathon Digital and Zero Two established two mining sites with a combined capacity of 250 MW.
UAE’s mining capacity is ~4% of Bitcoin’s global hash rate at around 400 MW.
Focus on renewable energy sources places the UAE in a competitive position for future mining growth.
The country's zero-tax policy in free trade zones provides significant advantages for miners.
We are following the developments closely. 👀
The Week’s Most Interesting Data Story
No Money in Trading, They Said… Liquidity Dry, They Said
Open interest in Bitcoin options contracts, a.k.a. how much money traders enter in the options market, is ridiculously close to the previous all-time high of $15.1B and currently sits at $13.8B… Interpret that as you wish, but one thing is for certain yet again – Bitcoin traders are increasingly a force to be reckoned with.
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A healthy dose of economic optimism if we ever needed some.