Overview of the Crypto Market in April 2024

Market Dynamics

In April, the crypto market experienced significant fluctuations, with Bitcoin's price dramatically oscillating after reaching an all-time high in March. At the beginning of the month, Bitcoin's price plummeted more than 5%, falling below $66,000. Throughout the month, the price fluctuated multiple times, primarily influenced by macroeconomic factors and market sentiment. These changes aligned with shifts in U.S. interest rate expectations, highlighting Bitcoin's sensitivity to global economic trends.

The derivatives market signaled this decline, with the funding rate for Bitcoin perpetual contracts dropping, indicating an upcoming adjustment. For many observers, the change in market sentiment makes this adjustment seem inevitable, with a significant liquidation event occurring outside of U.S. ETF trading hours.

Changes in U.S. interest rate expectations may be another factor influencing the shift in BTC sentiment, and the recent decline may be related to this. This serves as a reminder that despite many considering BTC a "store of value," it remains sensitive to macroeconomic changes.

The BTC price fluctuated between $73,000 and $60,000 throughout the month. This stability may be attributed to several factors. A significant influence is the unexpected decline of the dollar index DXY. A weaker dollar makes the BTC price more attractive, thereby supporting the BTC price.

Investor expectations regarding the BTC halving event may lead to a price surge. This is another factor that could influence market sentiment. However, this expectation did not materialize, and the BTC price was not affected.

In addition, although the pace has slowed, ETF inflows continue to support the market.

At the end of April, BTC was at the lower end of the price range, showing obvious market weakness, which may lead to more interesting developments.

Crypto Investment Product Innovation

An important development in April is the ongoing exploration of asset tokenization, especially with the launch of an institutional-level digital liquidity fund by a large asset management company. This fund is open only to accredited investors who can meet high minimum investment amounts, and it represents tokens on Ethereum. It primarily invests in safe, income-generating assets such as U.S. Treasury bonds and repurchase agreements, with dividends paid in tokens. This innovative model not only provides new investment options but also demonstrates how blockchain can enhance the liquidity and accessibility of traditional financial assets.

The fund manages assets of over $375 million from just 10 holders, highlighting a significant advancement in integrating real-world assets with blockchain technology.

Additionally, through collaboration with multiple institutions, the token has been further enhanced. This cooperation connects the token to the USDC smart contract pool, enabling direct redemption and continuous liquidity. As a result, investors can convert their token holdings to USDC at any time, facilitating instant global transactions. This feature is particularly beneficial for crypto companies managing large finances, providing a seamless way for businesses to access funds quickly, as stablecoins become increasingly prominent in international transactions. This integration marks a significant advancement in liquidity management within the financial sector.

Regulation and Regional Expansion

The regulatory actions in April are particularly important for the encryption world, especially with the Hong Kong Monetary Authority approving Bitcoin and Ethereum spot ETFs. This approval represents a significant change for the Asian market, particularly the Hong Kong market, although it is worth noting that due to strict regulations, access for mainland Chinese investors remains quite limited. This decision involves three major investment groups, highlighting the importance of integrating cryptocurrencies into a broader financial ecosystem.

In Europe, the development of encryption is also advancing. A large bank in Germany has announced its readiness to provide encryption trading and custody services. The actions taken by this traditionally conservative financial institution highlight the growing perception of cryptocurrencies as legitimate, investable assets. The bank's approach is particularly noteworthy as they focus on integrating encryption services as part of their business model, rather than merely chasing speculative profits. This reflects a deeper and more practical application of blockchain technology in corporate finance.

Ethereum and Regulatory Challenges

The trend of Ethereum is similar to that of Bitcoin, but it has received more intense scrutiny in terms of regulation. Regulatory agencies have been slow to decide on the application for an Ethereum spot ETF, requiring the public to comment on the proposed amendments, which indicates the cautious attitude of regulators and the ongoing uncertainty in the regulatory environment.

It is worth mentioning that a certain Ethereum lab has sued the regulatory agency, challenging the decision to "classify ETH as a security." This lawsuit could clarify Ethereum's position regarding regulation, while also impacting other cryptocurrencies. If successful, it may affect market dynamics and boost investor confidence.

The lawsuit strongly suggests that the issuer is operating under the assumption that the approval will eventually be granted.

Bitcoin Halving

The Bitcoin halving event occurred this month, reducing the block reward for miners by half. This change has significant long-term implications for the network economy. While we haven't seen a direct impact on the price, the reduction in rewards over time may mean higher transaction fees, as miners rely more on Gas to remain profitable. This shift is important for the future of Bitcoin as a transaction network, particularly because higher fees may reduce its appeal for small transactions. On the positive side, the development of Layer 2 networks is underway, which helps balance the trade-off between security ( being more critical for larger transfers ) and costs ( being a bigger factor ) in smaller transfers (.

![Crypto market April review: BTC faces strong adjustments, influenced more by macro factors])https://img-cdn.gateio.im/webp-social/moments-a4d06da2fbf48e326f512e8a953439ab.webp###

Macroeconomic Environment

The steady rise of gold and its connection to the crypto market

Gold remains in the spotlight in April. Despite the decline in holdings of the largest gold ETF in the United States, gold prices continue to rise.

This divergence is noteworthy, especially in Asia, where net inflows into gold ETFs have been recorded despite less developed market infrastructure compared to North America and Europe.

Central banks have also been actively buying gold, continuing a decade-long purchasing trend. The latest data shows that central bank purchases of gold are mainly motivated by traditional market diversification and crisis hedging, rather than a departure from the dollar. The only additional motivation last year was gold's performance during crises, highlighting global geopolitical and economic uncertainties.

Interest in gold seems to align with the discussions in the crypto market about "finding international payment options beyond the US dollar," indicating a broader demand for reliable alternatives outside the conventional financial system.

interest rate expectations and economic signals

April opened with heightened attention to the U.S. financial markets, and expectations regarding interest rate cuts sparked heated discussions. Stronger-than-expected economic data dampened hopes for rate cuts in 2024. The U.S. economy may be more resilient than previously thought.

( US employment and the Federal Open Market Committee ) FOMC ### progress

People are paying close attention to the U.S. employment data, with the ADP payroll expected to reveal a slight weakening in the labor market. This data is usually a precursor to the official employment statistics released a week later, which also indicate a softening, with the unemployment rate holding at 3.8%. The JOLTS and Challenger layoff reports further provide information on hiring and firing conditions.

In these releases, the FOMC press conference is particularly critical, with the chairman discussing the ongoing issues of inflation and the Federal Reserve's interest rate strategy.

( The bond market is tense and the U.S. fiscal quarterly report.

This month, the Treasury's quarterly report revealed some key financial strategies, detailing the upcoming bond issuance plans and adjustments to the overall finances, which directly impact market liquidity. This update is also reflected in the government bond market, as liquidity has decreased and volatility has increased since the end of 2021, with the market being closely watched by investors. In addition, the report emphasizes the borrowing adjustments projected by the Treasury for the second quarter, which are now $41 billion more than previously estimated, totaling $243 billion. Although this increase may seem large, it is relatively small compared to the enormous total amount of U.S. national debt ), which currently exceeds $34.5 trillion and continues to rise ###.

( Global Perspective

The global economy is also worth paying attention to. Japan's monetary market operations suggest that the government may intervene to support the yen. Essentially, the "yen bounce" ) refers to the sudden increase in the value of the yen (, occurring simultaneously with a decline in the DXY dollar index, leading to speculation that the Bank of Japan might intervene in the currency market to influence the value of the yen.

Meanwhile, South Africa is taking steps to regulate encryption, indicating that institutions there are becoming increasingly interested in digital assets. In contrast, due to sanctions risk, Venezuela is facing difficulties using USDT), a digital currency(, in its oil transactions.

Highlights of This Month

• The former CEO of a certain exchange was sentenced to four months in prison for anti-money laundering violations, highlighting regulatory actions in the crypto market.
• A USD institutional-grade digital liquidity fund from an asset management company: The fund manages assets exceeding $375 million, indicating strong institutional interest in digital assets.
• Bitcoin and Ethereum Spot ETFs in Hong Kong: Hong Kong has launched six new Bitcoin and Ethereum ETFs, significantly expanding the regulated encryption investment options in the Asia region, reflecting the trend of regulatory approval for crypto investments.
• A company expands its Bitcoin holdings: The company has increased its total holdings to 214,400 BTC by purchasing more Bitcoin, continuing its Bitcoin investment strategy.
• Legal developments between a certain company and regulatory agencies: The company is facing regulatory challenges that could impact the legal classification of Ethereum and the broader regulatory handling of encryption.
• Potential Spot Bitcoin ETF in Australia: Australia plans to launch its first spot Bitcoin ETF by the end of the year, potentially expanding the crypto market in the region.
• Expansion of a certain stablecoin on the TON blockchain: The stablecoin has launched USDT and XAUT stablecoins on the TON blockchain to enhance liquidity and access for decentralized applications.
• Cryptocurrency Leap in Hong Kong: Hong Kong plans to launch additional Bitcoin and Ethereum spot ETFs, further expanding regulated crypto investment options in the Asian market.
• The Rise of Cryptocurrency in South Korea: The South Korean Won surpassed the US Dollar in the first quarter of 2024, becoming the most traded currency in crypto transactions, showcasing the country's increasing influence in the encryption sector.
• The price of a certain NFT has plummeted: The price of a well-known NFT series has collapsed, marking a significant downturn in the once thriving digital collectibles market.
• Bitcoin miners activate long-dormant BTC: A Bitcoin miner moved long-dormant Bitcoins worth $3 million, sparking speculation that early miners may be cashing out.
• A certain asset management company's spot Bitcoin ETF surges: The company's IBIT spot Bitcoin ETF attracted $15 billion in inflows in just three months after its launch, indicating increased investor confidence.
• A public chain developer is solving the network congestion issue: The public chain developer is working on resolving network congestion to enhance transaction processing capacity and alleviate bottlenecks.
• A payment company introduces stablecoin for international payments: The company has launched a stablecoin international remittance service for US customers, eliminating transaction fees.
• A certain bank's stablecoin pilot on a public blockchain: The bank has launched a stablecoin experiment on a public blockchain network, integrating digital currencies into the gaming and sports ecosystems, reflecting Japan's evolving regulatory environment.

![Crypto market April review: BTC faces strong adjustments, influenced more by macro factors])https://img-cdn.gateio.im/webp-social/moments-572e4d7556831f8c0743cfb5af26baba.webp

On-chain analysis

• Currently, despite the strong performance of Bitcoin, overall interest in the crypto market is sluggish, especially towards altcoins.

![Crypto market April review: BTC迎来强