Dispatch #196: Still Set for Bitcoin?

In this patch of your weekly Dispatch:

The Crypto x AI Intersection 🚦

A Game of Crypto Associations 🛢️

The Struggles in the Charts ✊

The Big Idea

Bitcoin’s Moving Forces Remain

Confession time, Dispatch readers. Our Bitcoin high wasn’t perfectly timed. You see, in a moment BTC was poised for a leap into new price discovery. Instead, we experienced a series of 2% drops… then briefly up 1%, followed by… that ping-pong can get in your head. But we’re at it again, following your votes with our weekly round-up, focusing on BTC’s big movers.

Key metrics appear healthy – the high $60,000s are supported by continued US spot Bitcoin ETF inflows and realized volatility is declining. One would hope that the days of severe 10%+ pullbacks are behind us. So, what could really move BTC now?

• Inflation and the Fed Interest Rate (still sounds like an indie rock band to us)

On Wednesday, the Federal Reserve decided to keep interest rates steady, delaying potential cuts to as late as December. Fed Chair Jerome Powell emphasized that rates will remain unchanged until there's a clear economic shift. US inflation fell to 3.3% in May, prompting the anticipation of early interest rate cuts.

• U.S. Spot Bitcoin ETFs

U.S. spot BTC exchange-traded funds (ETFs) saw a net inflow of $100.9M, reversing the outflows from the previous two days. Since their inception, these 11 Bitcoin ETFs have attracted a total of $15.5B in net inflows with total holdings of over $60B. 

• Bitcoin Whales

On June 11, Bitcoin whales seized the opportunity of a price drop to accumulate 20,600 BTC, worth $1.38B. According to CryptoQuant, this marked the largest inflow day for Bitcoin whales since February 28. As Bitcoin's price fell from $71,650, daily inflows into whale accounts ranged between 1,300 and 2,200 BTC, Cointelegraph reports.

TL;DR Jerome Powell says the worst has passed inflation-wise, institutions are enjoying their take on Bitcoin, and big holders keep buying.

But there’s a level beneath that all, the most fundamental one – where Bitcoin is produced. We’ve had a pick before. Now we have reports that miners are offloading their reserves after two months of lower revenue following the halving. On June 9, in Dispatch after hours, 3,000 BTC (worth around $207M) were transferred to exchanges, marking a two-month high, according to CryptoQuant. That’s the true sell-off that led to a 3% drop in Bitcoin's price to $66,000. 

Is it still a game-set-match scenario for Bitcoin in the long run?

The Latest In…

The Economic Power of Crypto and AI

Talking of miners, an inspiring development has emerged. Equipped with powerful chips and advanced cooling systems, BTC miners are well-positioned to meet the rising demand from AI companies. This intersection of AI and crypto could collectively contribute $20T to the global economy by 2030, media reports. The synergy extends beyond Bitcoin mining to areas like information validation and virtual assistants, highlighting the broad potential of this emerging collaboration.

Senior crypto research analyst Juan Leon emphasized the significant potential at the intersection of AI and crypto, predicting a major impact on global GDP. The surge in AI development has led to shortages of data centers, AI chips, and electricity. To address this, the four largest cloud companies are projected to spend around $200B on data center expansions by 2025.

The Latest In…

Smooth Work from the SEC

Now, many of us are holding our breath until ETH ETFs start trading. Finally, we can chill. SEC Chairman Gary Gensler announced on Thursday that S-1 registration forms for spot Ether ETFs are likely to be approved by summer's end in September. Following May’s approval of exchange applications, individual issuers are now finalizing their registrations.

Gensler highlighted the smooth process during a Senate hearing, noting that Ethereum futures ETFs are already live. Analysts predict that spot Ether ETFs could attract up to $4B in their first five months, significantly boosting the market.

The Latest In…

Cardano’s Top 10 Battle

Cardano founder Charles Hoskinson anticipates a major milestone with the upcoming Chang fork, marking the onset of the “Age of Voltaire” in June. This upgrade introduces essential tools and infrastructure for Cardano's path to self-sustainability. Voltaire empowers decentralized governance, enabling stakeholders to propose and vote on improvements funded by a transaction fee-powered treasury system. This move signals Cardano's shift towards full autonomy, fostering innovation and community-driven growth.

The Latest In…

Bitcoin Is Digital Gold and Ether – Digital Oil?

The world’s largest lender, the Industrial and Commercial Bank of China recently compared Bitcoin to gold and labeled Ethereum as “digital oil” in a detailed analysis, according to media. The report highlights the dynamic evolution of digital currencies driven by imaginitve belief and market demand, as noted by historian Yuval Noah Harari.

ICBC's report explores how Bitcoin maintains scarcity similar to gold and solidifies its status as a robust asset, while Ethereum stands out for its technical capabilities in powering applications across the web3 ecosystem through smart contracts and decentralized finance (DeFi). The report underscores the critical roles of stablecoins in stabilizing the crypto market.

The Week’s Most Interesting Data Story

The Evolution in Bitcoin Trading

Bitcoin futures markets are witnessing a surge, with open interest reaching record levels. Is this surge signaling a new wave of market enthusiasm or a strategic evolution in trading practices? Glassnode has the technicals in detail 🙏.

Hot Topics

What the Community is Discussing:

Here’s one for the thrill-seekers!

Dispatch editors busily taking note, now…

It’s the only capitulation we look for.

What to Watch for Next Week:

• The Next Wave of Ethereum Upgrades

• A Memecoin Special

• Deep in Bitcoin Charts (again)

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