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US Inflation Expectations Decline for Second Consecutive Month, NY Fed Survey Reveals

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US consumers’ near-term inflation expectations have decreased for the second month in a row, according to a recent survey by the Federal Reserve Bank of New York. This trend reflects a more optimistic outlook on the future costs of housing and other essential goods.

  • Near-term Inflation Expectations: Consumers expect prices to rise at an annual rate of 3% over the next year, down from 3.2% in May.
  • Home Prices: Expectations for home price increases fell to 3% in June from 3.3% in May.
  • Core Consumer Price Index: A report due Thursday is expected to show a 0.2% rise in June, marking the smallest back-to-back gains since August.
  • Long-term Inflation Outlook: The median outlook for inflation in three years rose slightly to 2.9% in June from 2.8% in May, while the five-year outlook dropped to 2.8% from 3%.

Decline in Near-term Inflation Expectations

The survey revealed that consumers now expect prices to climb at an annual rate of 3% over the next year, a decrease from the 3.2% expectation in May. This shift brings short-term inflation expectations back to the level that was consistent from December until April, before it spiked to 3.3%.

Home Prices and Essential Goods

Consumers’ expectations for home price increases have also moderated, falling to 3% in June from 3.3% in May. This aligns with the 12-month trailing average. Additionally, consumers anticipate slower rises in the costs of gas, food, medical care, and rent over the next year.

Core Consumer Price Index

The survey’s findings are consistent with recent data showing a deceleration in inflation. A forthcoming report is expected to indicate that the core consumer price index, which excludes volatile food and energy costs, rose by 0.2% in June for the second consecutive month. This would represent the smallest back-to-back gains since August, aligning more closely with the Federal Reserve’s targets.

Long-term Inflation Outlook

While near-term expectations have declined, the median outlook for inflation three years from now has slightly increased to 2.9% in June from 2.8% in May. Conversely, the five-year inflation outlook has dropped to 2.8% from 3%.

These mixed signals suggest that while consumers are becoming more optimistic about the short-term economic environment, there remains some uncertainty about the longer-term trajectory of inflation.

The Federal Reserve Bank of New York’s survey indicates a positive shift in consumer sentiment regarding near-term inflation, with expectations for price increases moderating across various sectors. However, the slight rise in the three-year outlook and the drop in the five-year outlook highlight ongoing uncertainties in the economic landscape.

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Bitcoin

US Spot Bitcoin ETFs Witness $300 Million Inflows Amidst Seven-Day Positive Streak

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US spot bitcoin ETFs have experienced a remarkable $300 million inflow, marking the seventh consecutive day of positive flows. This surge is led by BlackRock’s IBIT, highlighting the growing investor confidence in bitcoin as a legitimate financial instrument.

  • US spot bitcoin ETFs reported a daily net inflow of $301 million, extending a seven-day positive streak.
  • BlackRock’s IBIT recorded the largest net inflows of $117.25 million.
  • The total net inflow for US spot bitcoin ETFs since January has reached $16.11 billion.
  • Bitcoin’s price has surged past $64,000, trading at $64,770.
  • Spot ether ETFs are expected to launch on July 23.

BlackRock Leads the Charge

BlackRock’s IBIT, the largest spot bitcoin ETF by net asset value, recorded the highest net inflows of $117.25 million. The fund also saw the most trading activity, with a volume of $1.24 billion. Other notable inflows included Ark Invest and 21Shares’ ARKB with $117.19 million, Fidelity’s FBTC with $36.15 million, and Bitwise’s BITB with $15.24 million.

Market Performance and Investor Sentiment

The total trading volume for US spot bitcoin funds on Monday was $2.26 billion. Although this is lower than the trading volumes seen in March, the ETFs have accumulated a total net inflow of $16.11 billion since their launch in January. The price of bitcoin has also seen a significant recovery, breaking above $64,000 and currently trading at $64,770.

Institutional Endorsement

BlackRock CEO Larry Fink recently stated that bitcoin has become a “legitimate financial instrument,” a significant shift from his previous skepticism. This endorsement from a major financial institution has likely contributed to the growing investor confidence and subsequent inflows into bitcoin ETFs.

Upcoming Launches and Market Outlook

Spot ether ETFs are anticipated to launch on July 23, further expanding the range of cryptocurrency investment options available to investors. The continued positive inflows and institutional endorsements suggest a bullish outlook for bitcoin and other cryptocurrencies in the near future.

The recent inflows into US spot bitcoin ETFs underscore the growing acceptance and legitimacy of bitcoin as a financial instrument. With major players like BlackRock leading the charge and upcoming launches of ether ETFs, the cryptocurrency market is poised for continued growth and investor interest.

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Trump Picks Pro-Bitcoin Vice President

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Donald Trump has announced Ohio Senator JD Vance as his vice-presidential running mate for the 2024 election. This decision underscores a significant shift towards pro-Bitcoin and cryptocurrency policies, as Vance has previously declared owning between $150,000 and $250,000 worth of Bitcoin in 2021

  • Pro-Crypto Stance: Both Trump and Vance are vocal supporters of cryptocurrency, aiming to reshape the regulatory landscape.
  • Financial Disclosure: Vance holds between $100,000 and $250,000 in Bitcoin, highlighting his personal investment in the sector.
  • Legislative Efforts: Vance has introduced multiple bills to make crypto regulations more industry-friendly.
  • Political Implications: The choice of Vance could sway crypto voters, a growing demographic in swing states.

A Pro-Cryptocurrency Ticket

Donald Trump and JD Vance have created a pro-crypto presidential ticket, signaling a major shift in the Republican Party’s approach to digital assets. Vance, a former venture capitalist and author of the best-selling memoir “Hillbilly Elegy,” has been a vocal critic of the Securities and Exchange Commission’s (SEC) stringent crypto regulations. He has introduced and supported various bills aimed at making the regulatory environment more favorable for the crypto industry.

Financial Interests

Vance’s financial disclosures reveal that he owns between $100,000 and $250,000 in Bitcoin, held on the cryptocurrency exchange Coinbase. He also has investments in a gold ETF, a crude oil ETF, and a brokerage account with Charles Schwab. His estimated net worth ranges between $5 million and $10.5 million.

Legislative Efforts

Vance has been actively involved in drafting legislation to revamp how the U.S. regulates digital assets. His proposed bills aim to overhaul the roles of the SEC and the Commodity Futures Trading Commission (CFTC) in policing the crypto market. One of his notable efforts includes a bill to protect banks from regulatory pressure to cut off services to crypto firms, prohibiting regulators from citing “reputational risk” as a reason for action against lenders.

Political Implications

The choice of JD Vance as Trump’s running mate could have significant political implications. A Harris Poll survey found that one-fifth of voters in swing states consider cryptocurrency policies important enough to influence their vote. With political action committees raising substantial funds to support pro-crypto candidates, the Trump-Vance ticket could attract a considerable number of crypto voters.

Criticism of SEC Chair Gary Gensler

Vance has been a staunch critic of SEC Chair Gary Gensler, calling him “the worst person” to regulate the crypto industry. He has accused Gensler of injecting too much politics into securities regulation and has opposed the SEC’s enforcement actions against crypto firms. Vance’s stance aligns with the broader Republican agenda to create a more favorable environment for digital assets.

Trump’s selection of JD Vance as his running mate marks a significant shift towards pro-crypto policies in the 2024 election. With Vance’s strong financial and legislative backing for the crypto industry, the Trump-Vance ticket aims to attract a growing demographic of crypto voters, potentially influencing the election outcome.

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Mt. Gox Moves Nearly $2.7 Billion in Bitcoin Ahead of Anticipated Payouts

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In a significant development for the cryptocurrency world, Mt. Gox, the defunct Bitcoin exchange, has moved nearly $2.7 billion worth of Bitcoin ahead of its long-awaited repayments to creditors. This move has caused notable volatility in the crypto market, with Bitcoin prices experiencing a sharp decline.

  • Mt. Gox has transferred approximately 47,229 BTC, valued at $2.7 billion, to new addresses.
  • The repayments are part of a $9 billion payout to creditors, marking a significant resolution to the 2014 collapse.
  • The large-scale movement of Bitcoin has led to market volatility, with Bitcoin prices dropping nearly 6%.

Background of Mt. Gox

Mt. Gox was once the world’s largest Bitcoin exchange, handling 70% of all global BTC transactions at its peak. However, in 2014, the exchange collapsed after losing approximately 850,000 BTC due to security breaches. This event severely impacted Bitcoin’s reputation and set back mainstream adoption efforts.

Recent Movements and Market Impact

On July 16, 2024, a Mt. Gox Bitcoin wallet transferred around 42,588 BTC ($2.7 billion) to an unknown address. This was followed by additional transfers, including 44,000 BTC internally and 48,641 BTC to another address. These movements are part of the impending $9 billion worth of Bitcoin repayments to creditors.

The large-scale transfers have caused significant market volatility. Bitcoin prices dropped from roughly $65,000 to around $63,000 following the latest transfers. The market’s reaction was swift, with a 10% drop in Bitcoin prices and over $425 million in leveraged positions being liquidated.

Repayment Process

The repayment process is being facilitated through a network of exchanges, including Bitbank, SBI VC Trade, Bitstamp, Kraken, and BitGo. Each exchange has its own timeline for processing the payouts, ranging from immediate distribution to a 90-day window. Japanese exchanges Bitbank and SBI VC Trade have already completed their distributions, contributing to the ongoing market volatility.

Future Implications

The commencement of Mt. Gox repayments has injected a new level of volatility into the crypto market. However, Bitcoin has shown resilience, rebounding to around $59,000 after its initial plunge. Analysts believe that much of the selling pressure was already priced in before the event, explaining the relatively quick price recovery.

The broader crypto market also shows signs of decoupling from Bitcoin’s movements. Ether (ETH), for instance, has stayed above the $3,000 mark despite BTC market volatility. The upcoming US Consumer Price Index (CPI) report and Federal Reserve Chair Jerome Powell’s testimony before Congress are also being closely watched, as they could significantly influence Bitcoin’s price trajectory in the coming months.

The Mt. Gox repayments mark a significant milestone in resolving one of the most infamous events in cryptocurrency history. While the market has experienced volatility, the increased liquidity and maturity of the cryptocurrency ecosystem have helped absorb the impact. As the repayments continue, the crypto market will be closely monitored for further developments.

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