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Bitfinex Alpha | Signs of economic cooling, but long-term Bitcoin sentiment remains positive
Hit by a year of rate hikes, the economy is finally showing signs of cooling. As an indicator of economic sentiment, housing is a good proxy for long-term sentiment. U.S. housing starts fell 0.8% in March, with multi-family housing projects declining while single-family housing projects held steady. The increase in borrowing costs is clearly having an impact on buying patterns, with potential buyers opting for existing homes over new construction.
Likewise, the U.S. labor market showed signs of continuing to cool, with jobless claims rising for the first time in three straight weeks. The rise in continuing claims suggests job seekers are taking longer to find new jobs, suggesting a less ample labor market, one of the signs the Fed is looking for to see if its tightening monetary policy regime is having an impact.
The Conference Board's leading economic index also fell for the 12th straight month, pointing to a possible recession later in 2023. Historically, declines in the LEI have preceded recessions, but it should be noted that the LEI has fallen below its six-month moving average without subsequent recessions. Despite these signals, the S&P Global PMI Composite Output Index in the US pointed to an improvement in the US economy, with both manufacturing and services growing in April.
A loosening labor market and a slowdown in housing starts, but gains in manufacturing and services could be just the case for the Fed looking to pause interest rates. Our base case remains for another 25bp rise next week followed by a pause in rate hikes.
In the cryptocurrency market, expiring bitcoin options are sending a bearish signal following the recent decline in bitcoin mining stocks, but the negative sentiment does not appear to last. The 25% delta deviation for Bitcoin options expiring in 7 days has dropped to a negative value of around 2.86 on April 22, indicating increased investor demand for bearish put options. However, the 180-day delta deviation of 25% is still quite high, indicating continued confidence in Bitcoin's long-term prospects.
Likewise, in the quotes of crypto mining stocks, RIOT, HIVE and HUT etc. have seen recent declines, which could be attributed to the year-to-date price increase of BTC and then the recent decline. Over the past 30 days, the correlation between mining stocks and BTC prices is very strong, with a correlation of 0.75. Ethereum’s transition to a proof-of-stake (PoS) consensus mechanism has contributed to a tighter correlation between mining stocks and BTC prices, as the mining industry is more concentrated in BTC.
Another driver of the decline is that Bitcoin mining difficulty has now reached an all-time high of 48.71 T, which calls into question the future profitability of mining. High mining difficulty makes it more challenging for miners to find new blocks, which can further reduce miner income.
Against this backdrop of economic data and cryptocurrency market sentiment, last week we also saw the SEC face questions from members of Congress over its enforcement actions against digital asset firms, its rulemaking agenda, and its role in shaping regulation. Question the scene of the securities industry. House Financial Services Committee Chairman Patrick McHenry criticized SEC Chairman Gary Gensler for regulating the digital asset ecosystem through law enforcement and an overly aggressive rule-making agenda.
During that time, the SEC charged Bittrex and its former CEO, William Shihara, with operating an unregistered securities exchange, broker and clearinghouse. The SEC complaint alleges that Bittrex repeatedly chose profit over investor protection and circumvented the registration requirements of federal securities laws.
Meanwhile, the U.S. House of Representatives has signaled its intention to do more to create a regulatory framework for stablecoins like USDC and Tether (USDt). The proposed bill is expected to address issues related to investor protection, market stability and financial crime by providing a comprehensive regulatory framework for stablecoins. The New York Department of Financial Services (NYDFS) has also joined the cryptocurrency regulatory agenda, announcing rules on how to assess the costs associated with regulating cryptocurrency companies. Companies with state-issued BitLicenses are now required to pay regulatory fees.
NYDFS Director Adrienne Harris also responded to her criticism that Signature Bank's failure was due to its exposure to the crypto industry, blaming it on the contagion of Silicon Valley Bank's (SVB) collapse, and claiming that this triggered Signature's customers, from the trust. Trusts to wholesale food suppliers have withdrawn their deposits in large quantities.
In other news, data analytics platform Dune also revealed that NFT marketplaces, including OpenSea and Blur, experienced a decline in daily users and sales in the last week, which was attributed to high gas fees, transaction taxes, and liquidity issues.
https://blog.bitfinex.com/bitfinex-alpha/bitfinex-alpha-signs-of-cooling-in-the-economy-but-long-term-bitcoin-sentiment-still-positive/
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Since Filecoin will undergo n v1 9 Lighting and n v2 0 Thunder network upgrades, Bitfinex will suspend the deposit and withdrawal of Filecoin (FIL) for about 24 hours from 13:00 UTC on April 27th (21:00 Beijing time). Bitfinex will notify customers once FIL deposits and withdrawals are open again. Transactions will not be affected.
https://www.bitfinex.com/posts/913
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Bitfinex Partners with Penguin Academy to Offer Paraguayan Coding Bootcamp for Women
Bitfinex announces sponsorship of Penguin Academy's three-week entry-level programming bootcamp in Paraguay. The camp, exclusively for women, will be held in Ciudad del Este, Paraguay from May 3-24, 2023.
Crafted by Penguin Academy, the course has a rich curriculum, including the fundamentals of coding in Python, as well as multiple workshops in robotics, IoT and web development, and there will also be sessions teaching blockchain fundamentals and microelectronics . Students will also have the opportunity to network and benefit from events such as meet and greets, speed dating nights and career nights.
The camp will culminate in a five-day hackathon and demo day, and three top contenders will receive scholarships to attend this year's Plan B Summer School in Lugano, Switzerland.
The advent of blockchain technology has revolutionized the traditional financial services industry in Latin America, most importantly how people in the region conduct their personal finances. A large part of this new wave of change is education, especially programming knowledge, especially for women, enabling many to unlock the financial freedom that blockchain technology offers, thereby significantly improving themselves, their families and the wider community standard of living.
As a resilient, trusted leader in the global cryptocurrency industry, Bitfinex continues to support the cause of unleashing personal freedom through technological innovation. To date, the firm has led several initiatives to accelerate financial inclusion by providing tools and educational programs to underserved communities around the world. Inspired by the original cypherpunk manifesto, the Bitfinex Freedom Manifesto outlines a vision of this freedom — a vision of freedom grounded in the power of cryptography, distributed systems, and open source software.
https://blog.bitfinex.com/media-releases/bitfinex-collaborates-in-coding-bootcamp-in-paraguay-with-penguin-academy/
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Bitfinex released an announcement introducing the process of unstaking ETH and withdrawing staking rewards after the Shapella upgrade
Following the completion of the Ethereum Shapella upgrade, Bitfinex customers can now unstake and withdraw previously staked ETH for the first time, and unlock their ETH staking rewards.
To unstake ETH 2 or unlock ETH 2 Rewards, Bitfinex customers will first need to convert their ETH 2 or ETH 2 Rewards to ETH 2 Unstaking using the currency conversion tool on the platform’s wallet page.
After the conversion is completed, its balance will be irreversibly converted to "ETH 2 Unstaking", and according to the result of the unbinding process of the pledged funds on the chain, the ETH 2 Unstaking balance will be converted to ETH, which can then be traded, withdrawn, etc.
https://www.bitfinex.com/posts/914
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Bitfinex Introduces New Demo Trading Feature
Bitfinex is pleased to update its demo trading functionality. The simulation trading supports a total of 18 spot and 16 perpetual trading pairs, including BTC, ETH, SOL and MATIC.
Bitfinex Demo Trading provides a simulated environment that replicates Bitfinex's live website, mirroring the order book and leverage levels available in the real Bitfinex market. Tokens in Bitfinex simulated trading have no value and can only be traded in a simulated environment.
https://www.bitfinex.com/posts/915
