Are investors swapping their gold for Bitcoin as inflation fears rise?

Are investors swapping their gold for Bitcoin as inflation fears rise?

For months now, economists have warned consumers that inflation will be a challenging monster to slay, that that last push to get prices below 2% will be a hard mile, or a tough row to hoe; take your pick of analogies or metaphors because they are all true.

This past week, we saw both consumer and producer prices rise more than expected, and while prices have come down from their 2022 peaks, we are still a long way from the Federal Reserve’s target of 2%.

Gold and silver prices dropped to multi-month lows, testing critical support at $2,000 and $22 an ounce, respectively. Investors continue to flee the gold market as higher-for-longer interest rates support higher bond yields and a stronger U.S. dollar.

Instead of gold, investors continue to push equities to record highs, and they also see new opportunities in Bitcoin. This past week, Kitco’s Jordan Finneseth noted that so far this year, more than $3 billion has flowed out of global gold-backed exchange-traded products. At the same time, the newly approved Bitcoin ETFs have seen total inflows of $4.115 billion.

Finneseth noted that with inflows of $4 billion, the cryptocurrency ETFs achieved in one month what took the gold market two years.

However, even in this difficult environment, we still must acknowledge the underlying strength of the precious metals market.

Despite the selling pressure, the precious metals were able to hold critical support levels. Silver, in particular, has rallied 7% from its lows earlier this week. Gold and silver may not be attractive assets as the Federal Reserve maintains its aggressive monetary policy stance; however, very few investors are actively shorting these assets.

Along with the inflation threat, fears of a recession have not completely disappeared; at the same time, there is enough geopolitical uncertainty to maintain a robust safe-haven bid in gold.

Let’s also not forget that a healthy physical gold market provides some price support. According to the National Retailers Federation, U.S. consumers were expected to spend a record $6.4 billion in jewelry for this year’s Valentine's Day. Jewelry purchases represented a significant portion of the $25.8 billion expected to be spent on gifts ahead of Feb. 14.

Meanwhile, China continues to assert its dominance in the gold market. According to a report from the World Gold Council, China’s gold market set all-time highs in several sectors in January. The WGC noted that 271 tonnes of gold was withdrawn from the Shanghai Gold Exchange last month, the busiest January on record and the third-biggest in the exchange’s entire history. Total holdings in Chinese-listed gold ETFs hit a record high last month At the same time, the People’s Bank of China continued to buy gold for the 15th consecutive month.

Despite the selling pressure in the gold market, there are some significant pillars of strength, and for many analysts, buying on dips is seen as a solid tactical investment.

Kitco Media

Neils Christensen

Time to Buy Gold and Silver

Tim Moseley

Ignore gold and focus on silver as prices rally 7 from support

Ignore gold and focus on silver as prices rally 7% from support

Rising inflation pressures have taken their toll on the gold market. While a lot has been thrown at the precious metal, it continues to hold critical support, at least for now, according to some analysts.

Although gold is ending its second week in negative territory, it is entering the weekend well off its lows after holding critical support at $2,000 an ounce. April gold futures last traded at $2,025.60 an ounce, down 0.64% from last Friday.

Analysts note that gold has struggled as hotter-than-expected consumer and producer prices force investors to push back the start of the Federal Reserve's easing cycle. Markets see only a 10% chance of a March rate cut; at the same time, the CME FedWatch Tool shows markets see only a 33% chance of a move in May. However, there are still solid expectations that the U.S. central bank could start easing interest rates in June.

Ole Hansen, head of commodity strategy at Saxo Bank, said that although gold could see further selling pressure in the near term, he remains bullish in the long term.

"We have highlighted on several occasions in recent months that both [gold and silver] are likely to remain stuck until we get a better understanding about the delivery of future U.S. rate cuts. Until the first cut is delivered, the market may at times run ahead of itself, in the process building up rate cut expectations to levels that leave prices vulnerable to a correction," he said.

However, Hansen added that despite the risks of lower prices, robust physical demand in Asia should continue to provide support for gold until investors come in to drive prices higher.

"Gold will likely struggle in the short term as rate cut expectations are being dialed back. But overall, I look forward to seeing how Chinese investors respond to slightly lower prices next week. I believe the physical demand from central banks and retail investors, not least in China, will continue to provide a soft floor under the market," he added.

Barbara Lambrecht, commodity analyst at Commerzbank, said that she is not expecting to see much movement in gold in the near term as the market remains caught in a tug-of-war between investors looking for the Fed to cut rates and others expecting higher for longer.

"As the market is already very cautious with regard to key interest rates, the potential for further corrections is likely to be rather small. After all, key interest rate cuts are still expected this year," she said.

Markets will be closed on Monday in recognition of Presidents' Day. With markets balancing on a knife's edge, analysts have said that investors will be paying close attention to the minutes of the Federal Reserve's January monetary policy meeting. Gold could be sensitive to any comments regarding the timing of the central bank's first rate cut.

Silver is the metal to watch

Julia Cordova, Founder of CordovaTrades and author of the weekly newsletter The MoneyMaker, said she sees more potential in silver.

"Silver looks to have been basing," she said. "Silver will dramatically outperform gold to the upside next week."

Michele Schneider, director of trading education and research at MarketGauge, said she is also paying more attention to silver and is completely neutral on gold.

"I am pretty much ignoring gold until prices fall to $1,920 or break above $2,100 an ounce," she said.

Schneider said that silver, because of its robust industrial demand, is in a perfect position to benefit from rising inflation.

"We're heading into an inflation that the Fed is not necessarily ready for or possibly able to control without killing gold," she said. Nobody's going to fly to silver as a safety flight unless they're worried about inflation. Right now, we just might need to be concerned about inflation."

The bullish calls on silver come as prices have managed to hold critical support at $22 an ounce and are ending the week testing initial resistance at $23.50 an ounce. The silver price is ending the week up 7% from its lows.

Economic data for the week

Wednesday: FOMC meeting minutes

Thursday: Flash US PMI, Weekly jobless claims, U.S. existing home sales

Kitco Media

Neils Christensen

Time to Buy Gold and Silver

Tim Moseley

Analysts doubt gold’s strength next week retail traders don’t stop believing

Analysts doubt gold’s strength next week, retail traders don’t stop believing

As expected, the gold market got its direction from inflation data this week, with the only major move being the sharp price decline on Tuesday morning following hotter-than-expected CPI data for January, which drove spot gold from just under $2,030 per ounce in the minutes before the 8:30 am EST release all the way to $1,991 an hour and a half later.

 

After that, prices largely traded within a narrow $12 channel on both sides of the $2,000 level until Friday morning’s PPI release caused another smaller selloff. This was followed by a sharp if shallow rebound, after which prices climbed steadily into the President’s Day long weekend.

The latest Kitco News Weekly Gold Survey showed Wall Street and Main Street diverging once again in their price expectations, with a large proportion of retail investors seeing potential gains next week, while analysts see a strong case for precious metal prices to slide.

“April gold posted a bearish breakout of its previous short-term sideways trend this week, extending its intermediate-term downtrend to a low of $1,996.40 (so far),” said Darin Newsom, Senior Market Analyst at Barchart.com. “At the same time, the long-term uptrend of the US dollar index is gaining momentum. The next downside target for April gold is $1,970.50.”

Adam Button, head of currency strategy at Forexlive.com, sees lower gold prices next week. “I think there are seasonal adjustment problems with the latest CPI and PPI numbers, but it could be months before that’s clear to the market,” he said. “For now, it’s tough to fight the tide of rising Treasury yields and a higher US dollar.”

Mark Leibovit, publisher of the VR Metals/Resource Letter, said he expects gold prices to rally after a possible correction.

“The question is at what point will the gold suppression stop to help implement physical acquisition,” he said. “First big support range is in the mid-1900s and with risk clear down to the mid-1700s. Our cyclical model in our VR Forecast Report opens up both possibilities before we surge as high as 2700.”

Leibovit pointed out that the U.S. still faces significant economic and political risks at home. “Will the U.S. default on its debt? Is the banking crisis just on hold due to the upcoming Presidential election? The overall stock market has a 'crash' risk between now and mid-year which has to be factored in,” he said. “Next week gold looks higher.”

Adrian Day, President of Adrian Day Asset Management, sees gold continuing in its sideways price channel next week. “Gold will react up and down to the various economic reports that come in, until it is clear that the Federal reserve is going to cut rates,” he said. “We are not yet at that point.”

James Stanley, senior market strategist at Forex.com, remains bullish on gold’s near-term prospects.

“Dollar bulls had an open lane to run this week, but the comment from Goolsbee on Wednesday about not getting ‘flipped out’ over an inflation print turned that around quickly,” he said. “I think we’ll see the Fed continue to lean dovish and that’s a positive for gold.”

 

Stanley said spot gold’s test below $2,000 this week was telling, because it couldn’t hold below for very long. “I think we’ll see bulls try to run it back towards 2039 next week,” he said.

Sean Lusk, co-director of commercial hedging at Walsh Trading, was trying to decipher the significance of the gold market’s price movements on Friday.

“The dollar's backed off here, so the metal's got to jump, but this might be one last push per the seasonals on the metals,” he said. “They usually die around Valentine's Day, you're in the Presidents Day weekend and then it backs off. We've had some technical damage done there. Silver's carving out a nice little bottom here, $23.20 on the low.”

Lusk said part of gold’s subsequent move higher was probably driven by traders wanting to be long gold over the long weekend, given the conflicts and other geopolitical risks at play.

“We dipped below $2,000 in gold, and boy it didn’t stay there for long, did it?” he said. “But the CPI number did that in, and I think the market is slowly starting to realize that things are becoming more inflationary, given the recent data. You had retail sales moving lower yesterday, a poor number there. You had one big down day in the stock market, and then they just bring it back up.”

“It just doesn't make any sense,” Lusk said. “The interest that we're going to have to pay on our debt is just going to be so massive moving forward here, and the trade does not care. Seven or eight stocks are driving this thing higher. That's primarily the reason why you're getting the reaction in the stock market that you are, because of earnings results that didn't disappoint.”

“But underneath, you’ve got geopolitical [issues], you have shipping routes shut down,” he warned. “What are they going to do about Russia? Is this war going to expand? Is it going to get nastier? Hezbollah's coming out and saying they're not going to stop attacking Israel. So you're going into a long weekend and saying ‘okay, if the market doesn't break on bearish news, which is positive dollar, it's inherently bullish,’ and that's pretty much the reaction. But, again, the reaction's limp.”

Lusk is now looking at the mid-November low of $1,975 on the April contract. “About a month prior to that they took it up on a spike to $2,171,” he noted. “Dips continue to be bought and support levels are holding here. We haven't turned over this market.”

Lusk said that one thing the recent data has achieved is to eliminate “all this nonsense about rate cuts” and markets are slowly starting to come to grips with this, even though the stock market doesn't seem to care, as evidenced by its recent all-time highs.

 

“But what would send ripples through the stock market would be if they had to raise rates to combat inflation,” he said. “If these numbers, CPI, PPI next month continue to surge, because we got a little uptick in energy prices and some other things, we could see this thing push higher.”

But Lusk predominantly sees downside risks for gold since the last employment report was released.

“We broke gold over $80 here,” he said. “It could go a lot further next week. If they take this rally and dunk it, it would go to 5% down from here, which is about $1,968. We're going to blow through those early November lows and retest that area.”

“If this thing really gets hammered… we closed last year at $2,071. They'll punch this sucker 10% down, a $200 break in the market from that level.”

Lusk said that amid all the uncertainties, he’s bullish over the weekend at least. “But you’ve got to watch out for that seasonal, because the second half of February through March into tax season is usually met with more sellers than buyers, and the path of least resistance is lower.”

“We need some follow through here,” he said about gold’s modest Friday gains. “If not, I wouldn't be surprised if next week, all things being equal, we take out $2,000 and start moving lower.”

This week, 14 analysts participated in the Kitco News Gold Survey, and Wall Street seems to see very little upside potential for gold in the near term. Only three experts, or 21%, expected to see higher gold prices next week, while the clear majority of 8 analysts, representing 57%, predicted a price drop, and another three experts, or 21%, expected gold prices to trade sideways during the coming week.

Meanwhile, 221 votes were cast in Kitco’s online polls, with a plurality of Main Street still maintaining a bullish attitude. 94 retail investors, representing 42%, looked for gold to rise next week. Another 72, or 33%, predicted it would be lower, while 55 respondents, or 25%, were neutral on the near-term prospects for the precious metal.

Aside from weekly jobless claims and a smattering of Fed speakers, next week promises to be a quiet one on the data front, with Wednesday’s release of the FOMC meeting minutes the only significant event on the docket.

Everett Millman, Chief Market Analyst at Gainesville Coins, was also looking at the bounce gold got in the late morning on Friday.

“Part of it could just be the market realizing that it had overreacted to the downside,” he said. “It could be a little bit of mean regression. But I have to admit that I expected that move to be confirmed.”

“Both the hotter than expected PPI and the CPI we got recently, those all play into the narrative that the U. S. economy is a bit more robust than expected,” he said. “That's really gold-negative given that I think a lot of what's priced into the higher gold price is this expectation for some sort of nearing economic crisis or at minimum, a recession or economic downturn, so any positive economic data contradicts that.”

“Then at the same time, if PPI and CPI are higher than expected, that is going to play into the higher-for-longer expectation, and if rates are higher, that means real rates will remain higher, bond yields will go up,” he added. “All of that does work against gold.”

Millman said that with U.S. markets closed for the President’s Day holiday on Monday while China’s markets reopen again after the Lunar New Year holiday, traders may be positioning themselves for a higher move in the short term.

“China will be trading for basically a whole session before US markets reopen on Tuesday,” he said. “Maybe the thinking behind this move is they don't want to get caught on the wrong side of it.”

Turning to next week’s economic news, Millman said that with the FOMC minutes the only significant release, he believes gold prices are more likely to decline than to rally.

“I'm leaning towards downside risk,” he said. “I think that we got a pretty clear picture after the meeting and after Powell's comments that the Fed is definitely sticking to higher-for-longer for now. March was taken off the table for a rate cut. And the minutes are really the only data point other than Fed members speaking to the public. I think there's downside risk to the FOMC minutes, given that they could reveal or reinforce that more hawkish tone that the Fed seems to be taking right now.”

Millman said this week’s CPI and PPI data only reinforce that expectation for him. “Obviously that data came out afterward,” he said. “But I wouldn't be surprised if the Fed had some early indicators or some of their own data that showed that indeed, inflation is potentially bouncing back higher. Powell's comments lead me to believe that, if only because he was so reluctant to declare victory, or to say much about inflation coming down, although it has quite a bit.”

He said what he’ll really be looking for are any references to banking and a possible credit crunch.

“I’ll be interested to see if there was any mention in the minutes about the health of the banking sector,” Millman said. “We saw that was a big driver for gold last year around this time, when we started hearing about bank failures. Conspicuously, in the FOMC statement they removed any language about, ‘the banking system is resilient, blah, blah, blah’ that had stayed in there for nearly a year.”

“I think that may be a telling aspect of this,” he said. “Does the Fed have that on its radar? Are they worried about the banking system or on the other hand, are they trying to reassure markets about the strength of the U.S. banking system? I think that would be the main thing to watch. And in the absence of that, I feel like it can only be potential downside risk for gold.”

Ole Hansen, head of commodity strategy at Saxo Bank, will be watching Chinese buyers as they return from a week off after welcoming the Year of the Dragon. “Gold will likely struggle in the short term but as the rate cut expectations are being dialed back, but overall I look forward to see how Chinese investors respond to slightly lower prices next week,” he said.

“I like gold lower,” said Marc Chandler, Managing Director at Bannockburn Global Forex. “US inflation–CPI and PPI–were a bit stronger than expected. This helped lift the dollar and US rates. To me, the dollar and rates are more important a driver of gold than its function as an inflation hedge.”

Chandler pointed out that markets learned this week that the Japanese and UK economies contracted for the second consecutive quarter in Q4 23. “While US retail sales and industrial output contracted in January, the momentum of the economy suggests something still above trend,” he said. “Data due in the coming days are unlikely to undermine the new divergence. That said, I do look for the dollar to top soon…DXY is up for the 6th of the past seven weeks this year. And the week it was down, it fell by about 0.1%.”

“I like the $1950-65 area,” Chandler said.

And Kitco Senior Analyst Jim Wyckoff sees gold prices skewing lower next week. “Steady-lower, as near-term price trend is down,” he said.

Spot gold last traded at $2,013.18 at the time of writing, up 0.44% on the day but down 0.55% on the week.

Kitco Media

Ernest Hoffman

Time to Buy Gold and Silver

Tim Moseley

Gold silver rebound amid downbeat US retail sales report

Gold, silver rebound amid downbeat U.S. retail sales report

Gold and silver prices are higher in midday U.S. trading Thursday, on corrective rebounds following recent selling pressure and after a U.S. retail sales report that was weaker than expected. April gold was last up $9.60 at $2,013.90. March silver was last up $0.508 at $22.895.

The January U.S. retail sales contracted by 0.8% compared to December, marking the largest decline since March of 2023. This downturn contrasts with a modest 0.4% increase in December and fell short of market expectations, which had anticipated a 0.1% decrease. The decline was widespread across various sectors. However, some sectors saw growth. January typically sees a decline in retail sales following the strong December holiday shopping season. Still, the report falls into the camp of the U.S. monetary policy doves, who want to see the Federal Reserve cut interest rates sooner rather than later.

Asian and European stock markets were mixed to firmer in overnight trading. U.S. stock index futures are mixed near midday.

The next U.S. inflation report comes with Friday’s producer price index report for January, seen coming in at up 0.1% from December, compared to a 0.1% month-on-month decline in the December PPI report. A Wall Street Journal headline today reads: “Pro Take: No big consumer price declines are in sight.”

The key outside markets today see the U.S. dollar index lower after hitting a three-month high Tuesday. Nymex crude oil prices are higher and trading around $78.25 a barrel. Reads a Dow Jones Newswires headline today: Higher global oil supply set to satisfy demand increase, IEA says.”

The yield on the benchmark 10-year U.S. Treasury note is presently fetching around 4.23%.

Technically, April gold futures saw short covering featured after prices hit a three-month low Wednesday. The bears have the overall near-term technical advantage. Prices are in a nine-week-old downtrend on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at the February high of $2,083.20. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the November low of $1,975.10. First resistance is seen at today’s high of $2,020.20 and then at $2,023.30. First support is seen at today’s low of $2,001.80 and then at this week’s low of $1,996.40. Wyckoff's Market Rating: 4.0.

March silver futures also saw short covering after prices hit a four-month low Wednesday. The silver bears have the overall near-term technical advantage. A nine-week-old downtrend is in place on the daily bar chart.

Silver bulls' next upside price objective is closing prices above solid technical resistance at $23.445. The next downside price objective for the bears is closing prices below solid support at the October low of $21.17. First resistance is seen at this week’s high of $23.15 and then at $23.445. Next support is seen at today’s low of $22.40 and then at $22.00. Wyckoff's Market Rating: 3.5.
 

March N.Y. copper closed up 550 points at 375.50 cents today. Prices closed nearer the session high today. The copper bears have the overall near-term technical advantage. A bearish pennant pattern has formed on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 390.00 cents. The next downside price objective for the bears is closing prices below solid technical support at the October low of 355.75 cents. First resistance is seen at 380.00 cents and then at 385.00 cents. First support is seen at today’s low of 370.00 cents and then at last week’s low of 365.50 cents. Wyckoff's Market Rating: 3.5.

Kitco Media

Jim Wyckoff

Time to Buy Gold and Silver

Tim Moseley

Gold weaker on follow-through selling from Tuesday’s solid losses

Gold weaker on follow-through selling from Tuesday’s solid losses

Kitco News

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Gold weaker on follow-through selling from Tuesday’s solid losses teaser image

Gold prices are down a bit on follow-through selling pressure after solid losses posted Tuesday. Prices hit a three-month low overnight. Silver prices are firmer after hitting a four-month low early on today. April gold was last down $3.20 at $2,004.20. March silver was last up $0.271 at $22.425.

The marketplace Wednesday had mostly digested Tuesday’s U.S. consumer price index report for January that came in at up 3.1%, year-on-year, compared to forecasts for up 2.9% and compares to a rise of 3.4% in the December report. The “core” CPI (excluding food and energy) for January came in at up 3.9%, year-on-year. The U.S. stock indexes sold off sharply, the U.S. dollar index surged, U.S. Treasury yields rose significantly and gold prices posted solid losses. The CPI report all but dashed hopes the Federal Reserve would start to lower interest rates early this spring. The warmer-but-still-not-hot CPI print Tuesday was not that far out of line from market expectations, yet the aforementioned markets showed serious reactions. It’s my bias the CPI report that was a bit warmer than expected was just an excuse for the U.S. stock market to experience a downside correction that was needed anyway, after the major U.S. indexes hit record highs earlier this week. And the U.S. dollar index was already trending up before the CPI news. Bond yields were already creeping up, too. Don’t be surprised to see stock market bulls look at Tuesday’s big pullback as a buying opportunity in existing solid price uptrends for the major indexes.

The next U.S. inflation report comes with Friday’s producer price index report for January, seen coming in at up 0.1% from December, compared to a 0.1% month-on-month decline in the December PPI report.

Asian and European stock markets were mixed in overnight trading. China is celebrating its Lunar New Year holiday this week and many China markets are still closed. U.S. stock index futures are modestly higher at midday.

The key outside markets today see the U.S. dollar index weaker after hitting a three-month high Tuesday. Nymex crude oil prices are lower and trading around $77.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently fetching 4.253%.

Technically, April gold futures prices hit a three-month low early on today. The bears have the overall near-term technical advantage. Prices are in a nine-week-old downtrend on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at the February high of $2,083.20. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the November low of $1,975.10. First resistance is seen at $2,010.00 and then at $2,023.30. First support is seen at today’s low of $1,996.40 and then at $1,985.00. Wyckoff's Market Rating: 4.0.

March silver futures prices hit a four-month low early on today. The silver bears have the overall near-term technical advantage. A nine-week-old downtrend is in place on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $23.445. The next downside price objective for the bears is closing prices below solid support at the October low of $21.17. First resistance is seen at $22.75 and then at $23.00. Next support is seen at today’s low of $21.975 and then at $21.50. Wyckoff's Market Rating: 3.0.

March N.Y. copper closed down 115 points at 369.95 cents today. Prices closed nearer the session low today. The copper bears have the overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 390.00 cents. The next downside price objective for the bears is closing prices below solid technical support at the October low of 355.75 cents. First resistance is seen at this week’s high of 375.45 cents and then at 380.00 cents. First support is seen at last week’s low of 365.50 cents and then at 362.60 cents. Wyckoff's Market Rating: 3.0.

Kitco Media

Jim Wyckoff

Time to Buy Gold and Silver

Tim Moseley

Bitcoin Hits 1 Trillion Market Cap For First Time Since December 2021 As BTC Tops 51000

Bitcoin Hits $1 Trillion Market Cap For First Time Since December 2021 As BTC Tops $51,000

By Brenda Ngari – February 14, 2024

After briefly dropping below $50K yesterday, thanks to a hotter-than-expected U.S. inflation report, Bitcoin has bounced back up. The overall market value of Bitcoin’s circulating supply breached $1 trillion today after the BTC price ticked above the $51,000 milestone.

Bitcoin Reclaims Its $1-Trillion Asset Status

 

Bitcoin has touched the $1 trillion market cap for the first time since December 2021.

At press time, BTC costs $51,681, according to data from CoinGecko. It’s gained 6.2% over the last 24 hours and an eye-watering 20.3% since this time last week.

BTC seemed like it was having a sluggish year after the greenlighting of 10 hotly-anticipated spot exchange-traded funds (ETFs) in mid-January.

The spot market products secured the regulatory nod from the U.S. Securities and Exchange Commission (SEC) after a decade of rejections, but the price of Bitcoin slumped. This was because one of the largest fund managers, Grayscale Investments, sold massive amounts of Bitcoin after users wanted to redeem their shares. That selling pressure looks to have subdued in recent days, though, and money is pouring back into the market.

The new spot investment vehicles have now seen over $3 billion worth of net flows — representing a milestone that is not typical within the first four weeks of trading for a newly-listed ETF.

Bitcoin’s notable growth comes as the Crypto Fear and Greed Index had soared to its highest point since late 2021 when Bitcoin attained its current lifetime high of $69,044.77. As per data from Alternative.me, the greed index inched into the “extreme greed” rating of 79 on Feb. 13. Hitting an extreme greed score for the first time in over two years indicates a renewal of optimism among crypto investors. Bitcoin’s market sentiment score now sits at 74.

The top crypto’s concerted attempt to hold its price above the $50,000 zone this year happens as the next Bitcoin halving, a quadrennial event when the reward to miners for securing the Bitcoin blockchain is ha

The original article written by Brenda Ngari and posted on ZyCrypto.com.

Article reposted on Markethive by Jeffrey Sloe

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Tim Moseley

Gold declines sharply as higher-than-expected CPI leads to dollar strength

Gold declines sharply as higher-than-expected CPI leads to dollar strength
 

Gold declines sharply as higher-than-expected CPI leads to dollar strength teaser image

Today the U.S. Bureau of Labor Statistics released the consumer price index report for January.

“The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3 percent in January on a seasonally adjusted basis, after rising 0.2 percent in December, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 3.1 percent before seasonal adjustment”.

The index for shelter increased by 0.6% in January, which contributed the largest spike in inflationary pressures, contributing approximately two-thirds of the monthly all items increase. Food was also troublesome, increasing 0.4% last month. The energy index fell by 0.9% over the month, largely due to a decline in gasoline costs.

The numbers revealed that inflationary pressures last month came in 1/10 of a point more than economists’ expectations. A higher-than-expected rise in inflation last month could easily change the timing of rate cuts by the Federal Reserve. More so, it raises a small, but real possibility that the Federal Reserve might raise rates before pivoting to rate cuts. However, for that to happen, inflation would have to come in hotter than expected in February.

Multiple Fed officials, including Chairman Powell have made it clear that they need to see more evidence that inflation is abating before making a final decision on the timing to initiate the Fed’s first rate cut. During his post-FOMC meeting press conference, Chairman Powell was asked if inflation has declined enough to initiate the first rate cut to which he answered, “We will need to see continuing evidence to build confidence that inflation is moving down sustainably toward our goal.”

Powell also remarked that a rate cut in March would be highly unlikely and today’s inflationary numbers reinforce that decision making the most likely first rate cut to possibly occur in May, but more likely in June. According to the CME’s FedWatch tool, there is only an 8.5% probability that the Federal Reserve will cut rates in March, and a 32.3% probability of a rate cut in May. That changes in June with a 52.7% probability that the Fed will have cut rates by ¼%, an 18.9% probability of ½% rate cut, and a 1.3% probability of a ¾% rate cut by the conclusion of the June FOMC meeting.

Following the release of today’s CPI report U.S. Treasury yields rose. The yield on 10-year treasury notes rose by 10 basis points to its current yield of 4.273%. The yield on 30-year bonds rose by seven basis points currently yielding 4.437%.

Higher yields on treasury debt moved the dollar substantially higher. The dollar opened at 104.156 and traded to a high of 105.001, and as of 4:45 PM ET, the dollar index is currently trading at 104.911 after factoring in today’s gain of 0.72%.

Gold sold off sharply based upon bearish market sentiment, resulting in traders actively selling, coupled with dollar strength. Gold futures basis the most active April contract declined by 1.64% taking gold $33.50 lower. While selling pressure resulted in a greater price decline than dollar strength, both were prominent factors in today’s $33 price decline.

Wishing you as always good trading

Kitco Media

Gary Wagner

Time to Buy Gold and Silver

Tim Moseley

Which Crypto Narratives Will Dominate The Next Bull Market? Cryptos To Watch In 2024

Which Crypto Narratives Will Dominate The Next Bull Market? Cryptos To Watch In 2024

The key to achieving success in the cryptocurrency realm is to invest in narratives, not just statistics. During the previous bull market, the most captivating narratives were Decentralized Finance (DeFi), Non-Fungible Tokens (NFTs), and the Metaverse. These narratives propelled certain cryptocurrencies to astronomical heights, with some experiencing growth of over 500 times their original value. The question now is what narratives will dominate the next crypto bull market and when they will experience a similar explosion in growth.

These projections are provided by key figures in the cryptocurrency industry and should be taken as speculative. This article focuses on the key narratives likely to shape the cryptocurrency landscape, their anticipated increase in popularity, and the projects linked to them that are worth keeping an eye on. The ongoing development of crypto regulations will largely influence the sequence in which these narratives gain prominence.

The rise of decentralized finance (DeFi) was a dominant force in the 2020 crypto bull market, with DeFi tokens experiencing remarkable growth, including Yearn Finance's YFI token, which at one point surpassed the value of Bitcoin. However, recent regulatory proposals aimed at DeFi suggest it may not be the dominant narrative in the current market cycle. Instead, other crypto narratives with fewer DeFi elements may gain more traction.

The success of crypto narratives may depend on the regulatory landscape, but some experts suggest that those with minimal DeFi integrations will have an advantage. This is because they will face fewer regulatory obstacles and enjoy greater adoption. Non-fungible tokens (NFTs) are the crypto technology with the least regulatory scrutiny, making it likely that narratives centered around NFTs will dominate.

Crypto Narratives Most Likely To Explode

Decentralized Social Media

The rise of decentralized social media (DESO) is anticipated to gain significant traction thanks to a convergence of factors. Growing censorship on traditional social media platforms, potential failures of popular networks, and challenges with monetization in a high-interest-rate environment have created an opportune landscape for DESO's growth. Governments worldwide have implemented laws to restrict social media content following the impact of the pandemic, as highlighted in this article on online censorship.

The implementation of various regulations, including the Digital Services Act (DSA) of the European Union, is causing a noticeable impact. Consequently, engaging in open and unrestricted conversations on major social media platforms is becoming increasingly challenging. An example of one leading social media platform, such as X, is now prioritizing free speech. Unfortunately, the resistance by these platforms may lead to their eventual downfall. X, for instance, has recently lost advertisers and is expected to incur significant financial losses.

The supposed economic downturn has led to a universal decrease in advertising revenue. In response, Google has taken measures to restrict the use of ad blockers on YouTube and has increased the frequency of advertisements in an effort to boost its ad revenue.

Upon initial consideration, it may appear improbable that the typical individual would transition to utilizing a decentralized social media platform due to concerns regarding censorship and advertisements. Nevertheless, upon further examination, it becomes evident that the adoption of decentralized social media is gaining momentum, with decentralized streaming experiencing remarkably rapid growth, as illustrated in the graph below.


Image source: Coingecko

Put in perspective, Odysee boasts a substantial user base exceeding 5 million individuals monthly, which continues to grow. As a decentralized social media protocol, Odysee outshines its competitors significantly. It is worth noting that Odysee is powered by LBRY, a cryptocurrency initiative that faced legal action from the SEC and was subsequently forced to cease operations. Nevertheless, Odysee remains the most prized possession of LBRY, Inc.

Odysee’s assets were recently sold at auction. According to LBRY’s report, while it’s nearly certain the Odysee assets will be assumed by someone interested in resuming its growth, it’s unclear if Odysee will continue to use the LBRY network in the future, switch to another crypto network, or switch to being a traditional web2 platform. 

If another crypto network acquires Odysee, you can bet that the crypto project will see explosive growth. Additionally, there is growing interest in decentralized platforms that replicate the functionality of traditional social media platforms like Twitter, as shown in the graph. These platforms concentrate on specific aspects of digital media, such as decentralized streaming and microblogging, and are designed to operate vertically. 

One decentralized platform that is not on that list yet encompasses all of the above and more. Markethive and its community are dedicated to building an entire ecosystem for entrepreneurs, including marketing, blogging, curation, email autoresponders, page-making systems, video feed, conference facilities, e-commerce, broadcasting, press releases, social network integration, etc.

Having established a comprehensive financial center for all its users and utilizing the Solana network for its Hivecoin token, Markethive is now preparing to introduce its platform to a global audience. Markethive has also removed itself from the centralized cloud services that continue to stifle platforms at the mercy of third-party APIs serving their interests. Currently, several user interface (UI) and UX components of Markethive's arsenal are being integrated in tandem to provide a sanctuary and empower individuals to regain control of their sovereignty. This year, 2024, is shaping up to be a pivotal time for Markethive, as it aims to reach unparalleled success and give back to the community that has embraced its vision.

GameFi

GameFi, the second prominent crypto narrative, is poised to experience immense growth, with some arguing that it's already underway. A glance at DappRadar reveals that the majority of the most well-liked decentralized applications (dApps) are connected to blockchain-based games. These games have amassed a considerable following, boasting millions of monthly active users. The surging popularity of blockchain games shouldn't come as a surprise, given that the traditional gaming industry grapples with challenges akin to those confronting centralized social media platforms.

To begin with, it seems that older video games are preferred over modern ones. This can be attributed to a variety of factors, such as disappointing visuals, weak storytelling, unnecessary infusion of politics, and overall unsatisfactory gameplay.

In 2022, the video game industry experienced its first year of losses in ten years, resulting in widespread layoffs among major developers. This downturn may be attributed to the pandemic-driven surge turning into a decline or developers ignoring their loyal player base. Regardless of the cause, the gaming industry is struggling financially. Similar to other technology leaders like Google, this situation may motivate game developers to explore alternative revenue streams.

Interestingly, it has been reported that players of Assassin's Creed encountered disruptive pop-up advertisements while playing the game. This occurrence was purportedly a technical glitch, but it shed light on the possibility that the gaming industry is attempting to impose advertisements on players in a similar manner to how YouTube is attempting to do so with its audience. While the typical YouTube viewer might tolerate this, it is highly probable that the average gamer would not welcome having their gameplay disrupted by pop-ups.

The outcome may be that game developers must incorporate GameFi elements to compensate for lost revenue, or players will seek out ad-free alternatives. A mixture of both scenarios will probably occur, which could be why blockchain games have gained significant popularity. If it is indeed the case that game developers are disregarding their primary audiences, then the adoption of blockchain games could even further increase.

This is because crypto technology, such as NFTs, enables gamers to influence the game's design instead of being controlled by ESG-obsessed asset managers like BlackRock. However, there is a limitation: these blockchain games must not involve excessive financialization. If they do, they may attract regulatory scrutiny, similar to what happened to Axi Infiniti in the Philippines.

The likelihood of this scrutiny is likely the reason why there have been limited GameFi integrations. Aside from regulatory hurdles, scalability and speed pose a significant challenge to widespread adoption, as seen in the case of Axi Infinity. Only a few blockchains can effectively accommodate millions of users simultaneously. 

In Axi's situation, they had to develop their specialized layer two solution called Ronan. This implies that you should prioritize the underlying layer one and layer two blockchains that support blockchain games rather than focusing on specific games. Thanks to its subnet architecture, Avalanche is notably gaining popularity as a preferred choice in this area.

Artificial Intelligence (AI)

The emergence of Artificial Intelligence (AI) as a dominant force in the tech industry is a narrative that has gained significant traction recently. While some argue that the AI explosion is already underway, others believe the real breakthrough is yet to come. The current AI hype in crypto and stocks is largely considered just hype, as there have been minimal actual changes thus far. It is widely believed that it will take at least two years for innovative AI companies to release their products and even longer for the general public to embrace and utilize them fully.

The current AI-fueled market frenzy may eventually subside as regulatory measures take effect or other factors come into play. If this bubble does burst, it may create a prime investment opportunity for crypto projects centered around AI technology. These projects will likely perform exceptionally well when the AI narrative regains momentum. Currently, everyday investors like us are unable to capitalize on AI innovation, making these cryptocurrency projects an attractive prospect.

While investing in established companies like Nvidia and Microsoft is possible, their massive valuations limit their potential for significant growth. As a result, private equity remains the most viable option for those seeking substantial returns on AI investments – but this avenue is only accessible to high-net-worth individuals. If this trend persists, investing in AI-related cryptocurrencies might be the only way for everyday investors to generate meaningful profits from the AI sector.

The emergence of new AI companies may be hindered if industry leaders such as Nvidia and Microsoft restrict access to their hardware and software. However, crypto tech's decentralized and open nature could provide an advantage in this scenario. Interestingly, some crypto projects have enabled individuals to access the previously exclusive hardware needed to run AI models, thereby promoting greater accessibility and competition in the field.

Among the projects in this category is the Akash Network. Additionally, numerous cryptocurrency initiatives have been making advancements in the software aspect of artificial intelligence. By merging this open-source progress with decentralized AI hardware, the result is a foundation for robust crypto AIs capable of rivaling those developed by Google and other companies.

In this instance, the main point to note is that if crypto AI were to become popular, the existing players would probably try to influence government regulators in order to prevent the development of decentralized artificial intelligence technology. It is important to note that these incumbents are already campaigning for policies that would hinder their centralized rivals from creating AI technology.

The upside is that AI in the crypto sector is still largely under the radar. This means there aren't many established factors to consider when evaluating its potential. Nobody knows yet whether the crypto industry can support the development of these models. Nevertheless, just as no one anticipated Bitcoin becoming the de facto digital gold, we find ourselves in that very situation. This demonstrates the potential for unexpected developments in the crypto landscape. 

Crypto Infrastructure

Infrastructure in the crypto industry is expected to experience significant growth, particularly in the areas of decentralized storage cryptocurrencies and crypto oracles that provide external data to the blockchain. It is important to note that infrastructure cryptos will play a crucial role in the success of other crypto narratives. For example, decentralized social media will likely demand substantial data storage capacity, while decentralized gaming will rely on extensive data feeds. Additionally, crypto AI will heavily rely on decentralized computing, which differs from decentralized storage regarding technical requirements.

Data storage, data feeds, and computing processes must be decentralized to ensure seamless operation and avoid potential regulatory or technical issues. This is particularly important given that a prominent centralized cloud platform banned crypto in August 2022. Moreover, Meta's use of Arweave for NFT storage demonstrates that decentralized infrastructure can be just as effective as its centralized counterpart. If discriminatory practices persist at the infrastructure level, such as app stores refusing to list certain apps, decentralized alternatives are likely to gain traction

In addition to Arweave, other cryptocurrencies worth keeping an eye on include cutting-edge oracle systems like Pyth, which may have a role in the gaming sector (GameFi); video encoding protocols such as Livepeer, which could have a role in decentralized social networks (DeSo); and data indexing protocols like The Graph, which could have a role in artificial intelligence (AI) development. It's important to note that this list is not exhaustive, and there may be other promising cryptocurrencies beyond these examples.

The level of adoption of the three previous narratives will influence the demand for these cryptocurrencies and their competitors. If there is significant adoption, there will be ample demand for these cryptos, potentially leading to an increase in price. However, it is essential to conduct thorough research on the tokenomics of these cryptocurrencies before investing, as this will determine whether the demand translates into a price surge.


Image source: Techopedia

Two More Narratives with Potential

Concluding the discussion, two additional crypto narratives may grow significantly. These narratives can potentially surpass the combined impact of the previous four. The first is the concept of crypto payments, while the second is the tokenization of real-world assets (RWAs), which has recently generated much hype. These two narratives are presented together as the final topics in this article due to the numerous regulatory challenges they face, specifically in the case of RWAs for crypto payments.

One of the main challenges involves the regulations surrounding stablecoins, which remain uncertain in numerous jurisdictions, especially in the United States. Congress is currently considering a proposed bill that could facilitate the use of stablecoins for payments, but its passage is unlikely until after the upcoming election due to the political divisions within the legislative body.

In the European Union, the Markets In Crypto Assets (MiCa) regulation technically allows stablecoins to be used for payments. However, the use of stablecoins will be restricted to Euro-backed stablecoins, which some argue are not all that popular. Despite this, regulatory clarity could lead to the adoption of crypto payments, positively impacting high-performance blockchains primed for payments, such as Solana and layer two solutions on Ethereum.

This relates to the regulations around RWAs, which are much further away. Some would say that this is debatable, given that stablecoins are technically RWAs; there are already tokenized fiat currencies and commodities. However, some argue that these differ from the RWAs on which the narrative truly focuses. The RWAs that most people have in mind involve tokenizing assets such as real estate, stocks, and bonds. If this is the situation, then tokenizing these assets on public blockchains is a distant prospect.

Significantly, major organizations and wealthy individuals would likely feel uneasy about revealing their RWA assets on transparent blockchains accessible to the public. As a result, they would opt for private and permissioned blockchains or public blockchains that ensure compliant privacy. When considering this, the transparency of cryptocurrency blockchains could pose a major challenge for narratives centered around institutional interests such as RWAs, which is why we're seeing growing interest in crypto privacy solutions. However, this particular market segment may not experience significant growth until the next cycle; it's an area that holds promise for the future.

This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

 

 

Editor and Chief Markethive: Deb Williams. (Australia) I thrive on progress and champion freedom of speech.  I embrace "Change" with a passion, and my purpose in life is to enlighten people to accept and move forward with enthusiasm. Find me at my Markethive Profile Page | My Twitter Account | and my LinkedIn Profile.

 

 

 

 

Tim Moseley

Solana Bulls Bounce Back from Network Outage Mounts Vigor For New SOL High

Solana Bulls Bounce Back from Network Outage, Mounts Vigor For New SOL High

By Newton Gitonga – February 13, 2024

Solana has demonstrated remarkable resilience following the recent network outage, with SOL reclaiming its position above the $100 mark and surpassing Bitcoin in performance this week.

The recovery comes after a minor dip to $92.91 on Tuesday during a major network disruption lasting approximately 4 hours and 46 minutes, marking the first outage since early 2023.

According to a report from Solana Status, block production on Solana’s mainnet beta resumed at 14:57 UTC on Wednesday, following a successful upgrade to version 1.17.20 and a restart of the cluster by validator operators.

In a detailed blog by the WU Blockchain team, journalist Colin Wu highlighted the challenges faced by Solana, particularly its periodic crashes due to transaction volume overload.

“Looking back at historical network events, we will find that the emergence of a large number of transactions is the main reason for the historical network disruption, which may be related to Solana’s mechanism,” wrote Wu, quoting Hu Zhiwei, president of the Boundary Intelligence Research Institute.

Wu further recommended several key areas to enhance Solana’s resilience, including improving infrastructure, optimizing the consensus mechanism, enhancing software robustness, and refining validator incentivization.

Notably, this outage adds to a series of historical network failures experienced by Solana, including incidents in May 2021, September 2021, January 2022, and February 2023, among others.

Nevertheless, despite these setbacks, sentiment surrounding Solana remains positive, with some viewing the recent outage as a potential blessing in disguise. On Thursday, popular on-chain analytics platform Santiment emphasized how Solana has outperformed Bitcoin this week, with its price surging above $110 and experiencing a 21.5% increase against Bitcoin’s 16.91 in the past 36 hours.

The firm further noted that the outage that initially caused concern among traders “ended up being a local bottom, with the FUD fueling this price rebound.”

Furthermore, the firm highlighted how development activity on the Solana platform has been on the rise, indicating ongoing efforts to address network scalability and stability issues.

That said, SOL is projected to keep soaring, with the price recently having bounced off yearly support around $80. Presently, price faces a minor resistance at $120. Should the price breach and hold above this ceiling, the next target is the December 2023 high of $125 and then $150.

At press time, SOL was trading at $113.95, up 21.10% in 24 hours, with trading volume surging by 91.53% to $2.8 billion. Notably, between October 15 and December 25, 2023, SOL gained about 460%, making it one of the largest gainers among the top ten cryptocurrencies by market capitalization.

DISCLAIMER: None Of The Information You Read On ZyCrypto Should Be Regarded As Investment Advice. Cryptocurrencies Are Highly Volatile, Conduct Your Own Research Before Making Any Investment Decisions.

The original article written by Newton Gitonga and posted on ZyCrypto.com.

Article reposted on Markethive by Jeffrey Sloe

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Tim Moseley

Thirteen Methods To Boost Your Click Throughs

Thirteen Methods To Boost Your Click Throughs

Thirteen Methods To Boost Your Click Throughs

The subsequent thirteen strategies will increase the number of click-throughs that your advertisements and communications receive:

  1. Request that you select. Request that the reader “click here to proceed” or “click here for further information.”
  2. Present a complimentary item on the opposing party. They are more likely to engage on a sales letter if they are assured of receiving valuable information without any monetary pressure. (Of course, you can include valuable information directly in your sales letter.)
  3. Facilitate the process of visualizing the outcome. A novice patron entering a restaurant for the very first time might feel apprehensive because they have no idea what to anticipate. However, those who have been there before feel considerably more at ease because they are already familiar with the surroundings, sights, and general atmosphere of the location.

Emails and advertisements serve as gateways to your restaurant, or in this instance, the landing page you desire your customers to visit. The greater your ability to assist individuals in envisioning and anticipating the experience that lies beyond the door, the greater the probability that they will click on your link.

METHODS TO BOOST YOUR CLICK THROUGHS

  1. Define the content that appears after the click. “Blind clicks” (advertises that fail to provide any indication of the content that follows the click) perform less effectively than advertisements and emails that explicitly inform the reader of what to anticipate on the following page.1
  2. Present an image illustrating the advantage of selecting. Be prepared to reveal the key to producing dinner plate-sized roses? Present them with an image depicting precisely that.
  3. In the event that you are providing a complimentary item in exchange for subscribing to your list (e.g., an ebook), ensure that the title of the freebie is captivating and conveys genuine value. “Free Dating eBook” is insufficient; “22 Surprisingly Easy Ways to Get Dates With Gorgeous Women” is a more suitable alternative.
  4. Implement a ‘coupon’ within the email, if applicable and in HTML format. Alternatively, add a coupon border to the advertisement. By attracting attention and suggesting savings, these dashed lines elicit a response.
  5. Discuss the benefits and value of the content that follows the purchase.
  6. Convey a benefit in the subject line of your email or advertisement. “A solution to the problem of low conversion rates.”
  7. Pose an incendiary inquiry, such as “Are you weary of engaging in arguments with your partner?”
  8. Request informational in nature. Inquire of individuals what approach you take to restore the affection in your marital relationship; for instance, “How do you accomplish this?”
  9. Be straightforward. If you have an exceptional offer for them, come right out of the chute with it without any delay. “12 miniature roses are available for $32, including shipping.”
  10. Provide valuable information to them. As an illustration, the subject line could read “Seven Methods for Eliminating Mold.” Seventh link provides access to your product and is included in the email containing the first six. The link is appended to a list of seven if it is an advertisement, with the seventh one directing to your product.

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The Artist that came out of the Winter