Bitcoin and crypto sentiment is entering into a very quiet week in terms of upcoming events. Both crypto-related events and important macro data have been very rare this week.
The most important macro data is the ISM Services PMI Wednesday (6/9/2023) at 10:00 am EST and initial unemployment claims Thursday (7/9/2023) at 8:30 am EST.
However, both events are unlikely to have a significant impact on the dollar index (DXY) and the same is likely to apply to Bitcoin and crypto markets.
1. Bitcoin Sentiment Linked to Bitcoin Spot ETF Decisions?
Spot Bitcoin ETF approval is still the most important catalyst for the market to watch. Grayscale’s latest win in court against the SEC has been a milestone.
“The SEC will likely have no choice but to approve a Bitcoin Spot ETF following Grayscale’s victory in its case against the SEC,” according to JPMorgan. However, the exact timing is still in doubt.
While Bitcoin and crypto market sentiment is waiting tensely for a second deadline in mid-October, the consensus among analysts is leaning towards another delay by the SEC.
The first “final” deadline for Ark is scheduled for January 10th. Moreover, the market’s somewhat lackadaisical response to Grayscale’s win, which was followed by a rapid retracement, is evidence of the fatigue and anticipation that has accumulated over time.
However, Grayscale’s win has introduced an element of uncertainty. The SEC’s window for appealing court decisions closes on October 14, a date that coincidentally aligns with the second deadline for other institutional giants such as BlackRock, Fidelity, and Invesco.
However, while a definitive decision on a Spot Bitcoin ETF in September appears elusive, negotiations between Grayscale and the SEC regarding the implementation of the ruling could potentially result in a surprising turn of events.
2. Release US CPI on September 13
The September Consumer Price Index (CPI) report is the most anticipated economic indicator this month. Scheduled to be released on September 13, this report will provide an overview of the inflation trends of the US economy and will influence the overall Bitcoin and crypto market sentiment.
After a period of consistent decline, the July CPI showed a surprising increase. Financial markets are now on high alert, trying to determine whether this is the start of a new inflation trend or just an anomaly.
The Fed’s latest comments on the previous two CPI reports were somewhat optimistic. However, Fed Chair Jerome Powell’s latest statement is a reminder of the volatility and uncertainty of economic indicators.
If September’s CPI again shows worrying inflation trends, the Fed could be setting the stage for discussions around another potential rate hike in 2023.
3. FOMC meeting on September 20
The Federal Open Market Committee (FOMC) meeting on September 20 is another important event on the September financial calendar. Because the results of the FOMC meeting can significantly influence Bitcoin and crypto market sentiment.
This meeting is particularly significant as it follows the recent surge in CPI and PCE data, which remained high at 3.3 percent.
With the 2 percent inflation target set by the Fed still not reached, markets are highly inclined to hold off on a rate hike, with a very high 93 percent probability.
Every word spoken by Jerome Powell will be carefully analyzed for insight into the future strategy of the Fed.
Recent economic data present a complex picture. On the one hand, a sharp decline in US consumer confidence, coupled with a decline in job vacancies and persistent contraction in US manufacturing, paints a gloomy picture.
4. Bitcoin Sentiment and Crypto Market Through More Crypto Events
The dYdX decentralized exchange is preparing for an important update with the launch of V4 on their Cosmos app-chain network.
One of the key features of this update is the in-memory order book which will be monitored by the dYdX network validator.
In a move that represents a shift towards greater decentralization, trading revenues will no longer be directed to centralized entities such as dYdX Trading Inc.
With a current market capitalization of US$362 million and a fully realized valuation of US$2.09 billion, the upcoming revenue sharing model for DYDX token holders is a significant development.
However, potential investors should be wary of a 40 percent DYDX lock coming in December. Coinbase’s Base platform has been stealing the limelight in the crypto community. Since its inception, Base has quickly raised US$400 million in Total Retained Value (TVL).