How high can BTC go?

Thoughts of the Day

Bitcoin surged from below $51,500 to near $57,000, likely driven by significant inflows into crypto products globally, notably US-based Bitcoin ETFs receiving nearly $610 million last week. With inflows surpassing new production, expect it’ll keep going as long as inflows continue and we’re likely to see new All-Time highs before this cycle ends.

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Day Ahead

Nothing noteworthy on the horizon today.

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What Happened Yesterday

Market Movements as of New York Close 26 Feb 24

Schmid (2025 voter, known dove):
“No need to preemptively adjust the stance of policy. The Fed should be patient, waiting for convincing evidence that the inflation fight has been won. We are not out of the woods yet on ‘too high’ inflation.”
(This is Schmid’s first direct comment about monetary policy.)

Japan’s annual inflation rate for Jan 24 decreased to +2.2% from the +2.6% of the previous month, marking the lowest rate since March 2022. The core inflation rate also dropped to +2.0% from +2.3% in December, reaching its lowest point in 22 months. This was above the market expectations of +1.8%, yet remained within the Bank of Japan’s target of +2% after exceeding this target for 21 months. On a monthly basis, consumer prices remained unchanged following a slight increase of +0.1% in December. Reaction in the USDJPY was muted.

The US Treasury Yield curve inversion widened to 0.41% as the US 2-year bond yield and  the 10-year yield rose +0.02% to 4.69% and 4.28% respectively. 

The US stock futures traded within a small range through the Asian and London trading hours with the S&P 500 futures up merely +0.17% when the New York session started.

The US stock market opened a tad higher from Friday. It then started to trade slightly weaker as the day progressed. As a result, the S&P 500 fell -0.38% (high: +0.17%, low: -0.39%), the Dow Jones slipped -0.16% (high: +0.29%, low: -0.27%) while the Nasdaq inched lower by -0.02% (high: +0.43%, low: -0.06%).

Zoom Video Communications (ZM) +10.39% in aftermarket trading. Earnings per share: $1.22 adjusted vs $1.15 expected. Revenue: $1.15 billion vs $1.13 billion expected. The outperformance is due to the revenue beat.

The crypto market continues to rally with Bitcoin breaking past the 53,000 resistance level decisively and marking new highs since 2021. BTC traded to a high of 54,900 yesterday and is currently testing 57,000 at time of writing. The move is likely triggered by the news that crypto investment products investment funds had a further US$598m inflow globally last week. Microstrategy also announced that it has acquired an additional 3,000 Bitcoins (for approximately $155.4 million in cash, at an average price of approximately $51,813 per bitcoin) between 15 Feb 2024 and 25 Feb 2024 and now holds 193,000 BTC
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Headlines & Market Impact

JPMorgan CEO Jamie Dimon says AI is not just hype — ‘This is real’

Notable Snippet: The Wall Street titan told CNBC’s Leslie Picker on Monday that AI is not just a passing fad and is bigger than just the large language models such as Chat GPT. He compared the current moment favourably to the tech bubble around the start of the 21st century, when investor excitement seemingly got ahead of the actual changes.

“This is not hype. This is real. When we had the internet bubble the first time around … that was hype. This is not hype. It’s real,” Dimon said. “People are deploying it at different speeds, but it will handle a tremendous amount of stuff.”

JPMorgan has done work on the ability to use the new technologies internally, with Dimon saying that AI will eventually “be used in almost every job.” JPMorgan created a new role of chief data and analytics officer last year, in part to handle AI.

Dimon said Monday that there are 200 people at JPMorgan doing research on the large language models that have recently been rolled out by tech companies.

While acknowledging that AI can be used by bad actors, Dimon called himself a “big optimist” about the emerging technology, mentioning cybersecurity and pharmaceutical research as areas where it can be helpful.

“It may invent cancer cures because it can do things that the human mind simply cannot do,” Dimon said.

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Commerce Secretary Raimondo: U.S. set to become a major hub of leading-edge logic chip manufacturing

Notable Snippet:  The Biden administration is aiming to make the U.S. a major manufacturer of state-of-the-art semiconductor chips before 2030 to compete on the global market, increase national security and create more jobs, Commerce Secretary Gina Raimondo said Monday.

“Our investments in leading-edge logic chip manufacturing will put this country on track to produce roughly 20% of the world’s leading-edge logic chips by the end of the decade,” Raimondo said during a speech at the Center for Strategic and International Studies.

“That’s a big deal,” she added. “Why is that a big deal? Because folks, today we’re at zero.”

The announcement comes a year after the U.S. Department of Commerce opened funding applications for the 2022 CHIPS and Science Act, including $39 billion in manufacturing incentives, and Raimondo outlined its goals by 2030. Among them were the design and production of the world’s most advanced chips in at least two new fabrication plant clusters built for the purpose.

The plan will result in “hundreds of thousands of good-paying jobs,” Raimondo said Monday.

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Sweden clears final hurdle to join NATO as Hungary approves accession

Notable Snippet: Hungary’s parliament approved Sweden’s NATO accession on Monday, clearing the last hurdle before the historic step by the Nordic country whose neutrality lasted through two world wars and the simmering conflict of the Cold War.

Hungary’s vote ended months of delays to complete Sweden’s security policy shift and followed a visit by Swedish Prime Minister Ulf Kristersson on Friday, during which the two countries signed an arms deal.

“Sweden is leaving 200 years of neutrality and military non-alignment behind,” Kristersson told a press conference.

“We are joining NATO in order to defend what we are and everything we believe in even better. We are defending our freedom, our democracy and our values, together with others.”

With Sweden following Finland into NATO, Russian President Vladimir Putin has in effect achieved the very thing he sought to avert when he launched his war in Ukraine – an expansion of the alliance, Western leaders have said.

“When it comes to Russia, the only thing we can expect is that they will not like that Sweden is becoming a NATO member,” Kristersson said. “What they do in addition to that, we cannot know. We are prepared for all sorts of things.”

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Stock Indices

Phan Vee Leung
CIO & Founder, TrackRecord