The Nashville conference drives BTC up to $70,000. What will the market performance be like afterwards?
Bitcoin Breaks Through $70,000 Again: A Brief Peak and Market Correction
On July 30, 2024, Bitcoin (BTC) briefly broke through the $70,000 mark after more than a month of stagnation, reaching a high of $70,050. This price peak attracted widespread attention and discussion in the market, with many investors and analysts speculating whether Bitcoin would create a new historical high again. However, the market's high volatility and unpredictability meant that this peak did not last long, and Bitcoin's price quickly corrected. This situation serves as a reminder to investors that the cryptocurrency market is filled with risks and uncertainties.
Nashville Bitcoin Conference: A Key Event Driving Market Sentiment
The recent short-term surge in Bitcoin's price is partly attributed to the Bitcoin Conference held in Nashville, Tennessee, from July 25 to 27, 2024. This conference attracted global attention due to its scale and influence, as well as the attendance and speech of former U.S. President Donald Trump. Trump's remarks and proposals sparked widespread discussion and market reactions during the conference.
Trump's Remarks and Proposals
At the conference, Trump made a series of bold suggestions regarding Bitcoin, including the establishment of a U.S. Bitcoin strategic reserve and the dismissal of current SEC Chairman Gary Gensler. He believes these measures would help the U.S. maintain a leading position in the global cryptocurrency space. Additionally, Trump claimed that the U.S. would become the global center for cryptocurrencies, even becoming a "Bitcoin superpower." These remarks not only generated heated discussions at the conference but also had a direct impact on the Bitcoin market, driving a temporary price increase.
Other Important Speeches: Further Driving Market Expectations
In addition to Trump, other notable figures also garnered significant attention with their speeches at the conference. For instance, U.S. presidential candidate Robert F. Kennedy Jr. stated that if elected, he would sign an executive order directing the U.S. Treasury to purchase 550 Bitcoins daily until reserves reached 4 million BTC. He believes this move would greatly enhance Bitcoin's valuation, potentially pushing its market cap into the trillions of dollars. Furthermore, he proposed changing IRS policies to exempt Bitcoin transactions from reporting and taxation. If implemented, this proposal could have a profound impact on Bitcoin's trading volume and market participation.
U.S. Senator Cynthia Lummis also expressed strong support for Bitcoin at the conference. She suggested that the U.S. government purchase 5% of Bitcoin's total supply and hold it for at least 20 years. This proposal received backing from MicroStrategy founder Michael Saylor, who predicted that Bitcoin's price could reach $49 million by 2045. Robbie Mitchnick, BlackRock's head of digital assets, called on investors to actively purchase Bitcoin ETFs (exchange-traded funds). He pointed out that nearly all buyers of the ETF (IBIT) are long-term holders, as evidenced by only one day of net outflows in the past six months. These statements reflect a portion of institutions and individuals' optimistic attitudes toward Bitcoin's long-term prospects.
Market Correction: Risks and Uncertainties
Despite a series of positive remarks and market activities supporting it, Bitcoin quickly corrected after briefly breaking through $70,000, which may be related to market expectations of a potential correction following the conference. A report released by Bitfinex Alpha during the conference noted that the implied volatility in the Bitcoin options market had surged but has recently declined. This change may indicate a slight consolidation in Bitcoin's price in the short term.
Additionally, on the morning of July 30, a small test transfer (0.02 BTC) was observed from a Mt. Gox address. Given that substantial transfers typically follow similar operations by Mt. Gox, this heightened market panic and further amplified the correction. Reports indicate that the low point of the correction occurred around 8:15 AM, shortly after this news broke. This event once again reminds investors that the volatility and uncertainty in the Bitcoin market remain high.
ETF Market Performance: Optimism Among Institutional Investors
Despite the fluctuations in the Bitcoin market, the ETF market has shown strong performance. According to monitoring data from Trader T, on July 29, the U.S. Bitcoin spot ETF saw a net inflow of $123.1 million. This means that in the past half month (counting only trading days), the ETF market experienced net outflows on only one day, while maintaining positive inflows on other trading days. This data indicates that institutional investors remain optimistic about Bitcoin's long-term prospects.
Attention on Bitcoin Ecosystem Projects
As Bitcoin's price fluctuates, some Bitcoin ecosystem projects have also attracted investors' attention. In particular, projects closely related to Bitcoin, such as SATS and CKB, have gained more focus.
SATS is a leading BRC inscription project in the Bitcoin ecosystem, possessing meme attributes. Recently, SATS has performed strongly relative to ORDI, with market expectations of potential positive news. CKB, on the other hand, is a Bitcoin Layer 2 project based on the RGB++ extension protocol, aimed at addressing deficiencies in the Bitcoin ecosystem. CKB continues to enhance its technical capabilities in the competitive Layer 2 solutions space, showcasing strong technological potential.
POW Sector Movements: Performance of BCH, KAS, and BSV
Cryptocurrencies in the POW (Proof of Work) sector, such as BCH, KAS, and BSV, have also performed well recently. Notably, after Trump's appearance at the Bitcoin conference, the prices of these coins significantly surged in the short term.
BCH, KAS, and BSV rose by 15%, 12%, and 18%, respectively, following Trump's attendance at the conference. The market believes this is related to Trump's favorable policies for the mining industry discussed at the conference. The popularity of POW coins surged significantly in a short time, with notable inflows of capital and traffic. Investors and analysts need to continuously monitor the attention these tokens receive from miners on social platforms like YouTube and Telegram.
Moreover, changes in open interest are also an important market indicator. For example, BCH's open interest has recently increased, indicating an influx of hot money into the market. By analyzing contract data, one can observe the movements of major funds in the market, such as the increase in long positions and the expansion of trading volume, which are crucial references for assessing market trends.
Summary
Bitcoin's price quickly corrected after breaking through $70,000, highlighting the market's high volatility and complexity. Despite numerous positive news and policy support, Bitcoin's market performance remains filled with uncertainties. As more institutional investors engage in the Bitcoin market and the global policy environment evolves, Bitcoin's future remains unpredictable. For investors, maintaining caution, monitoring market dynamics, and implementing appropriate risk management are key to navigating this highly volatile market.
Key sectors to watch moving forward include Bitcoin ecosystem projects like SATS and CKB, as well as POW sector coins like BCH, KAS, and BSV. The performance of these projects and sectors will be significantly influenced by policy changes and market sentiment, and investors need to closely monitor relevant developments to make informed investment decisions.
