Bitget Research: Federal Reserve Maintains Expectation of Three Interest Rate Cuts This Year, Cryptocurrency Market Rebounds Across the Board

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Bitget Research2024/03/21 08:02

By:Jarseed & Aaron

In the past 24 hours, many new popular tokens and topics have emerged in the market, which are likely to be the next wealth creation opportunities.

Overview

Less than 24 hours ago, the Fed released its interest rate dot plot and announced it will stick to its call for three rate cuts in 2024. This news alleviated concerns about potential rate hikes, leading to a strong rally in the cryptocurrency market in response to this positive development.

Sectors with strong wealth creation effects: Public chain and RWA.
Top searched tokens and topics by users: Polyhedra Network, BaseTools, RWA, Bearchain.
Potential airdrop opportunities: GRVT, BWB.

Data collection time: March 21, 2024, 4:00 AM (UTC)

1. Market Environment

Early this morning, the Fed released its interest rate dot plot during the FOMC meeting, revealing that most Fed members expect to maintain three rate cuts in 2024. The decision is widely interpreted as a dovish signal, leading to a strong rally in the cryptocurrency market, with BTC surging by up to 8.3% and ETH by up to 9.8%.

BTC ETFs are still experiencing net outflows, with a total outflow of $260 million today, reaching a three-day streak of net outflow. BTC's price dropped 17.7% during the correction from its highest point of $73,000 but rebounded in response to the Fed's dovish signal. If BTC ETFs can reverse the outflow trend and maintain a steady net inflow, there could be another surge before the halving.

2. Wealth Creation Sectors

2.1 Sector Movements: Public chains (BTC, ETH, SOL)

Main reason: Earlier today, the Fed’s decision to stick with its call for three rate cuts in 2024 provided relief for the market, and a short-term liquidity shortage is unlikely. BTC, ETH, and SOL, the three largest public chains in the crypto industry, are impacted by macroeconomic policies as the line between traditional finance and the crypto industry blurs. The Fed's dovish signal has spurred the whales to rally the public chain sector. However, whether a market reversal could happen depends on future market conditions.

Price increase: In the past 24 hours, BTC rose by 8.2%, ETH by 11.5%, and SOL by 13.2%.

Factors affecting future market conditions:

BTC ETF inflows: BTC ETFs saw a three-day streak of net outflow, with BTC's price having dropped 17.7% from the highest point of $73,000. With the Fed's decision now known, if BTC ETFs can reverse the outflow trend and maintain a steady net inflow, there could be another surge before the halving, potentially hitting new highs.
ETH ETF approval: The question of ETH ETFs can get approval in May is the biggest factor affecting the future ETH market. There will be speculation and hype catalyzed by news and rumors about ETH ETFs' approval, such as whether the SEC will deem ETH as security, which may contribute to ETH price volatility. Investors should stay updated and manage risk exposure accordingly.
Solana upsurge: The boom in the Solana ecosystem has driven up the demand for SOL, leading to a rise in its price. However, this surge was followed by rapid profit-taking. The future price of SOL will depend significantly on whether this boom can be sustained by more funds remaining in the Solana ecosystem. Investors should monitor changes in the Solana ecosystem’s TVL and the potential emergence of innovative applications.

2.2 Sector Movements: RWA Leader (ONDO, CFG)

Main reason: BlackRock has filed with the SEC to offer the BlackRock USD Institutional Digital Liquidity Fund in partnership with asset tokenization firm Securitize. This marks BlackRock's entrance into the real-world asset tokenization race with its first tokenized fund.

Gainers: ONDO (46%) in the last 24h.

Factors affecting future market conditions:

Ondo-BlackRock RWA product update: Ondo Finance's Short-Term Investment Grade Bond Fund (OUSG) invests its assets by tokenizing Blackrock's iShares Short Treasury Bond ETF (Nasdaq: SHV), contributing significantly to Ondo Finance's TVL. The current price of OUSG stands at $105.47, with an APR of 5.17%. Investors can look forward to more RWA updates and product launches from Ondo's partnership with BlackRock, potentially benefitting the ONDO token.
Information influence: Ondo published an ecosystem catalog on its website, disclosing partnerships in liquidity, custody, and other key areas. Its custody and trust partners include TradFi giants such as Morgan Stanley, BlackRock, Ankura Trust, Clear Street, and NAV Consulting. Driven by news from BlackRock, ONDO has surged. It's advisable to continue monitoring developments in TradFi, as there is a significant correlation between the two.

2.3 Sectors to focus on next — Cross-chain protocols (AXL, RUNE)

Main reason: The crypto industry is grappling with the common issue of fragmented liquidity across different public chains. As the crypto industry gradually enters mainstream attention, solving the problem of liquidity silos has also become a focus of the industry. Both Axler and RuneChain are excellent products that provide solutions for cross-chain liquidity, earning recognition and funding from the market.

Specific token list:

AXL: Axelar is a universal relay chain that verifies and transmits information on its own Layer 1 chain. Axelar has launched its demo product Satellite, a cross-chain transfer tool, showcasing the ability to transfer assets across multiple EVM chains. The recent strong rally in AXL indicates that some investors are actively opening positions and driving up its price. Investors can keep an eye it and consider buying at lower prices.
RUNE: THORChain facilitates cross-chain liquidity and reduces the reliance on centralized exchanges and third parties within the DeFi space. It enables cross-chain swaps and yield generation on crypto assets like Bitcoin and Ethereum. Thanks to its special nature, investors can deem RUNE tokens as leveraged BTC or ETH and add them to their portfolios.

3. Trending Searches

3.1 Popular DApps

Polyhedra Network (ZK): The project is a Web3 infrastructure and an interoperability protocol that facilitates cross-chain transfer of NFTs and other tokens. The project has strong financing backing from Foresight Ventures, Binance Labs, OKX Ventures, and other leading investors. The project is available on Bitget Launchpool where users can stake BGB and USDT to enjoy an APR as high as 60%.

3.2 Twitter

BaseTools (BASE): A Layer 2 network developed by Coinbase, the project focuses on developing Telegram bots that deploy on the Base platform. Recent movements in memecoin deployment and the wealth effect on the chain indicate fund inflows to the Base ecosystem. One or two well-known memecoins on the Base chain will likely emerge and be listed on major exchanges. As a Telegram bot, BaseTool has captured a lot of attention recently.

3.3 Google Search (Global and Regional)

Global focus:

(1) FOMC meeting (event)

Following the FOMC meeting yesterday, Federal Reserve Chairman Jerome Powell's dovish message drove up not just the crypto market, but also the capital market, bond market, and commodity market, painting a picture of a flourishing economy despite the US dollar weakening. Meeting highlight: (a) Interest rate remains in the 5.25%–5.50% range, the highest in the cycle. (b) There could be three rate cuts this year. (c) Quantitative tightening might end early in case of a bank reserve shortage.

To sum up, FOMC's decision is favorable for risky assets, leading to a strong rally in the crypto market with core assets such as BTC and ETH rising by more than 10%. The bullish market expectation remains as crypto asset prices are supported by macroeconomic policies.

Regional focus:

(1) Asia shows high interest in popular sector tokens such as RWA.

Asia's trending searches reveal a high level of interest in current popular projects. The RWA sector witnessed substantial growth yesterday, with ONDO taking the lead. The sector has been booming with keen attention from Asian users. Other popular RWA projects in Asia to keep an eye on are MKR, MPL, and CFG.

(2) Certain projects are trending across various regions.

Bearchain (Dapp) is trending in Canada and the US. The project announced that it raised $69 million this year and is valued at $1.5 billion, with participation from OKX, Polychain, and other leading institutions. The project has not yet launched its token, offering an opportunity to interact early for a potential airdrop.

4. Potential Airdrop Opportunities

GRVT: Decentralized trading platform with clear airdrop opportunity

GRVT (Gravity) is an institutional-grade, trustless trading infrastructure for cryptocurrency. Built by technology and financial market experts, Gravity helps create a platform where institutional traders can enjoy a completely private, regulated (KYC & AML) and self-custody trading environment.

With substantial funding amounting to $9.3 million, GRVT has garnered support from well-known institutions including Delphi Digitial, ABCDE Capital, and Folius Ventures. Phase 1 is underway, and will be followed by a Phase 2, where participants earn points through promotions and trading.

How to participate: (1) Create a personal/institutional account. (2) Complete tasks such as following the project's X account. (3) Open mystery boxes to get the platform's NFT and a chance to receive airdrops.

BWB: Bitget Wallet’s upcoming platform token with a large potential airdrop

Bitget Wallet is a Web3 wallet recognized for its substantial funding, a large global user base (over 19 million worldwide), and top five ranking for global wallet downloads. It is a top-tier project in the wallet sub-sector, which suggests a relatively high valuation.

Recently, Bitget Wallet announced its airdrop plan where platform tokens converted from BWB points will be distributed to users of MetaMask, Phantom, and other wallets.

How to participate: Users with previous on-chain interactions can check for eligibility here: https://web3.bitget.com/en/bwb-airdrop?open_in_browser=true

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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