Wintermute: The cryptocurrency market has passed the hawkish data test, with capital flowing from stocks and gold into crypto assets
Wintermute released a market update indicating that the non-farm payroll data for August exceeded expectations, pushing the interest rate hike probability to nearly 60%. Bitcoin briefly retreated from $82,400 but still closed the week up 3.45%, standing above $80,000. Bitcoin ETFs recorded a net inflow of $987 million, marking three consecutive weeks of positive inflows, totaling nearly $3.8 billion. This indicates that the crypto market has withstood the test of hawkish data.Bitcoin has fallen about 50% from its peak, which is significantly less than the over 75% declines seen in the same periods of 2018 and 2022, reflecting earlier involvement from ETFs and institutional funds. Wintermute believes that capital is flowing from stocks and gold into crypto assets, forming the premise for a new cycle. $82,000 is a key level that needs to be broken, while $72,000 is the point to judge a trend change. The voting on the CLARITY Act, along with the CPI and FOMC meetings, are all scheduled for next week. The end of the Robinhood Chain Gas subsidy at the end of September will be the first test of the sustainability of activity. If Bitcoin falls below $72,000 and ETF outflows turn significantly negative, a reassessment will be necessary.
