Is the bull market fading away? Don't panic, these storylines in the second half of 2024 are still worth looking forward to

Author: Terry, Plain Language Blockchain

In the past two months, although there have been constant hot events related to memes and major project airdrops, the market has remained in a rather paradoxical atmosphere of gloom—the bear's howl seems faintly audible, while the bull's footsteps are elusive; the market collapse and restart seem to be just a moment away.

This article aims to explore and organize some of the hidden fermenting events in the market over the past two months, while also looking ahead to the positive factors that may be overlooked in the coming months, and to envision the main storyline that may take center stage in the next half year.

01 BTC Spot ETF Inflows Turn Positive

The market tends to overestimate the short-term effects of new things while underestimating their long-term impact. For the Bitcoin spot ETF, which has been launched for nearly half a year, there is a recent signal worth paying attention to:

According to SoSoValue data, the Bitcoin spot ETF has seen a new wave of capital inflows since mid-May, lasting nearly a month, with June 4 reaching a historical second-high value of $886 million (only behind the $1.05 billion on March 12).

Although there has been a consecutive decline starting this week, the overall situation has clearly reversed compared to April and May. As of the time of writing (June 21), the total net asset value of the Bitcoin spot ETF is $56.24 billion, with an ETF net asset ratio (market value compared to Bitcoin's total market value) reaching 4.39%, and a historical cumulative net inflow of $14.67 billion.

02 Crypto Regulation Shifts & Ethereum Spot ETF Accelerates

As the winds rise from the edges, under the backdrop of the 2024 election year, both regulatory and funding aspects have shown a significantly improving macro environment, brewing a new round of bullish catalysts.

First, on May 22, the "21st Century Financial Innovation and Technology Act" (FIT21 Act) passed the House of Representatives with an overwhelming majority of 279 votes to 136. Subsequently, the U.S. Securities and Exchange Commission (SEC) officially approved the 19b-4 forms for eight Ethereum spot ETFs on May 24.

This indicates a shift in the U.S. regulatory stance from being tough to softening, especially as the expected approval timeline for the Ethereum ETF has been significantly advanced, seemingly just a step away from final launch. Interestingly, although the U.S. regulatory attitude change and approval speed have greatly exceeded expectations, looking back, it does not seem to be without signs:

At least as early as when Ethereum was around $3,000, whales like Justin Sun began accumulating ETH, firmly betting on the ETH/BTC exchange rate, suggesting that some individuals/institutions with keen senses were already making early arrangements.

Most directly, ETH's performance in the secondary market has also swept away previous downturns and started to strengthen gradually. The most obvious change is in the ETH/BTC exchange rate; since last October, ETH has been continuously declining compared to BTC, with the ETH/BTC exchange rate dropping from above 0.064 to below 0.045.

Since mid-May, the ETH/BTC exchange rate has begun to break the downward trend, successively surpassing the 0.05 and 0.055 thresholds in the past month, reaching a recent high of 0.058, showing overall strength.

03 Traditional Web2 Players Accelerate Web3 Layout

On June 6, Robinhood announced it would acquire the crypto trading platform Bitstamp for $200 million, thus expanding into regions outside the U.S. The two parties have reached an acquisition agreement, pending regulatory approval—this is half the acquisition price of $400 million paid by the South Korean company NXC's subsidiary NXMH in 2018, making it a significant bargain.

As we all know, Robinhood is one of the most commonly used stock and crypto CEX platforms among U.S. users, with 11 million monthly active users, and it is even more popular in the crypto trading field than Coinbase: Robinhood's revenue based on trading grew by 59% year-on-year in the first quarter of this year, reaching $329 million, with cryptocurrency revenue of $126 million, up 232% year-on-year, showing very strong performance.

Founded in 2011, Bitstamp is considered one of the longest-running and most compliant crypto CEX platforms globally, with operations in Luxembourg, the UK, Slovenia, Singapore, and the U.S., and it holds valid licenses and registrations in over 50 countries/regions, which can assist Robinhood in expanding its crypto business into other regions.

This is almost a perfect complementary relationship—Robinhood's current market focus is primarily on the U.S., while competitors Kraken and eToro have stronger operations in Europe, so although Bitstamp's 4 million users are not many, most of them are in Europe, making it a significant leap for Robinhood's expansion in Europe.

It is worth noting that just a month ago, Robinhood received a Wells notice from SEC staff regarding the listing, custody, and platform operations of RHC's crypto assets (RHC activities). Therefore, this acquisition of Bitstamp will expand Robinhood's global layout, hedging against the strong regulatory impact from the SEC and ensuring it remains in the game.

Additionally, Fortune magazine predicts that this transaction will not only add about 4 million new crypto customers to Robinhood but will also enable Robinhood to offer a wider range of cryptocurrency products to more institutional clients:

Expanding from the 15 tokens currently offered in the U.S. market and over 30 in Europe to more than 85 tokens included in Bitstamp, while Bitstamp's diversified services (such as staking, stablecoins, trading, custody, and major brokerage services) will also help Robinhood attract more institutional clients and potentially accelerate its expansion in the European market.

04 Macroeconomic Environment Signals Easing

Although in the past six months, U.S. CPI and PPI, non-farm payrolls, and other data have repeatedly exceeded expectations, and Federal Reserve officials have begun to make "tough statements," leading the market to continuously adjust interest rate cut expectations, at least for now, inflation seems to be nearing its end, and there remains cautious optimism regarding the Fed's interest rate cuts in the second half of the year.

FOMC permanent voting member, Fed "third-in-command," and New York Fed President John Williams emphasized this Tuesday that any decisions regarding the timing or extent of interest rate cuts this year will depend on the upcoming economic data, while Fed officials have lowered their expectations for planned interest rate cuts this year, with the median official predicting only one rate cut.

However, viewed as the vanguard of the Fed, the Bank of Canada and the European Central Bank have taken the lead in signaling a shift, preemptively cutting rates:

On June 5, the Bank of Canada lowered its interest rate from 5% to 4.75%, the first cut in four years;

On June 6, the European Central Bank lowered its interest rate from 4% to 3.75%, the first cut in five years;

Regardless, the global trend of interest rate cuts is accelerating, and favorable macro factors are indeed accumulating.

05 Major Payment/Financial Institutions Return

In addition, recently BN has again allowed Mastercard users to purchase crypto assets on BN, and the BN-branded Visa card has resumed use on trading platforms, with BN stating that the withdrawal service using Mastercard will be restored later.

As early as March, MetaMask also partnered with Mastercard to conduct tests for the first blockchain payment card, with marketing materials indicating that the MetaMask/Mastercard payment card issued by Baanx will be "the first truly decentralized Web3 payment solution," allowing users to use cryptocurrencies for daily consumption anywhere that accepts bank cards.

This undoubtedly greatly addresses the cognitive and entry barriers for incremental users, moving towards seamless fiat and stablecoin exchanges, and abstracting the user experience for easier use (account abstraction, akin to Web2 payment experiences), especially bridging the connection between cryptocurrencies and off-chain consumption scenarios, which is beneficial for establishing anchors between crypto assets and a broader asset pool.

06 Summary

Overall, in this market environment where the chill and warmth seem to alternate, there are still quite a few positive factors slowly fermenting; as long as one observes carefully, confidence can still be seen.

Although the bear's howl seems faintly audible, and the bull's footsteps are elusive, in this context, maintaining cautious optimism, constantly observing, and actively participating may be the only thing to do in the current market atmosphere.