April 2024 Crypto Assets Market Review

Market Overview

In April 2024, the Crypto Assets market experienced significant fluctuations. After reaching an all-time high in March, Bitcoin's price saw drastic volatility this month. At the beginning of the month, Bitcoin's price plummeted over 5%, falling below $66,000. Throughout the month, the price fluctuated significantly multiple times, mainly influenced by macroeconomic factors and changes in market sentiment. These trends echoed the changes in U.S. interest rate expectations, highlighting Bitcoin's sensitivity to global economic trends.

The derivatives market indicates this round of decline, and the funding rate for Bitcoin perpetual contracts falling suggests an upcoming adjustment. For many observers, the shift in market sentiment makes this adjustment seem inevitable, and there was a noticeable liquidation event that occurred outside of trading hours on a certain trading platform.

Changes in U.S. interest rate expectations may be another factor affecting the shift in Bitcoin sentiment, and the recent decline may be related to this. This reminds us that, although many view Bitcoin as a "store of value," it remains sensitive to macroeconomic changes.

The Bitcoin price fluctuated between $73,000 and $60,000 throughout the month. This stability may be attributed to several factors. One significant influence is the unexpected decline of the Dollar Index DXY. The weakening of the dollar makes Bitcoin prices more attractive, thereby supporting the price of Bitcoin.

Investor expectations regarding the Bitcoin halving event, which may trigger hopes for a price surge, is another factor that could influence market sentiment. However, this expectation did not materialize, and the Bitcoin price was not significantly affected.

Moreover, despite the slowdown, ETF inflows continue to support the market.

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

Crypto Asset Investment Product Innovation

In April, an important development was the continued exploration of asset tokenization, particularly with the launch of an institutional-grade digital liquidity fund by a large asset management company. This fund is represented by tokens on Ethereum and is only open to qualified investors who meet a higher minimum investment amount. It primarily invests in safe, yield-generating assets, such as U.S. Treasury bonds and repurchase agreements, paying dividends in token form. 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 significant progress in merging real-world assets with blockchain technology.

In addition, through partnerships with multiple institutions, the token has been further enhanced. This collaboration connects the token to the USDC smart contract pool, enabling direct redemption and continuous liquidity. Therefore, investors can convert their token holdings into USDC at any time, supporting instant global transactions. This feature is particularly beneficial for crypto assets companies managing large finances, providing a seamless way for businesses to quickly access capital, as stablecoins are increasingly prominent in international transactions. This integration marks an important advancement in liquidity management within the financial sector.

Regulation and Regional Expansion

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

In Europe, the development of Crypto Assets is also advancing. A large bank in Germany has announced its readiness to provide Crypto trading and custody services. The actions of this traditionally conservative financial institution highlight the growing perception of Crypto Assets as legitimate investable assets. The bank's approach is particularly noteworthy, as they focus on integrating Crypto 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 Development and Regulatory Challenges

The trend of Ethereum is similar to that of Bitcoin, but it faces more intensive scrutiny in terms of regulation. A certain regulatory agency has yet to decide on the Ethereum spot ETF application, requiring public comments on the proposed amendments, which indicates the cautious attitude of the regulatory agency and the ongoing uncertainty of the regulatory environment.

It is worth mentioning that a certain Ethereum development team has sued the regulatory agency, challenging the decision to "classify ETH as a security." This lawsuit could clarify the regulatory status of Ethereum and also affect other Crypto Assets. If they win, it may impact market dynamics and boost investor confidence.

The lawsuit strongly suggests that the issuer assumes the approval will eventually go through.

Bitcoin Halving

The Bitcoin halving event that occurred this month has halved the miner block rewards. This change has significant long-term implications for the network economy. While we have not seen a direct impact on prices, over time, the reduced rewards may mean higher transaction fees as miners become more reliant on Gas to maintain profitability. This shift is important for the future of Bitcoin as a transaction network, especially since higher fees may diminish its appeal for small transactions. On a positive note, the development of Layer 2 networks is underway, which helps balance the trade-offs between security ( being more critical for larger transfers ) and costs ( being more important for smaller transfers ).

Macroeconomic Environment

The steady rise of gold is related to Crypto Assets

In April, gold remains the focus of attention. Despite the decline in holdings of the largest gold ETF in the United States, gold prices continue to rise.

This differentiation is worth noting, especially in Asia, where despite less developed market infrastructure, there have been net inflows into gold ETFs compared to North America and Europe.

The central bank has also been actively buying gold, continuing a ten-year purchasing trend. The latest data shows that the central bank's purchase of gold is mainly driven by traditional market diversification and crisis hedging motives, rather than a departure from the dollar. The only increased motive last year was gold's performance during crises, highlighting global geopolitical and economic uncertainty.

This interest in gold seems to coincide with the discussion in the Crypto Assets community about "finding international payment options outside of the dollar," demonstrating the market's broad demand for reliable alternatives outside of the conventional financial system.

interest rate expectations and economic signals

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

US employment and FOMC progress

U.S. employment data is under close attention, expected to show a slight slowdown in the labor market. This data is usually a precursor to the official employment statistics released a week later, which also indicate a softening trend, with the unemployment rate remaining at 3.8%. The JOLTS and Challenger layoff reports further provide insights into hiring and layoffs.

Among these releases, the FOMC press conference is particularly crucial, where the chairman discussed the persistent issue of inflation and the Federal Reserve's interest rate strategy.

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

This month, the Treasury's quarterly report revealed key financial strategies, detailing the upcoming bond issuance plan and overall fiscal adjustments, which directly affect market liquidity. This update is reflected in the government bond market, where liquidity has decreased and volatility has increased since the end of 2021, attracting close attention from investors. The report emphasizes that the Treasury expects borrowing adjustments in the second quarter, $41 billion more than previously anticipated, totaling $243 billion. Although this increase seems significant, it is still relatively small compared to the enormous total amount of U.S. government debt (, which currently exceeds $34.5 trillion and continues to grow ).

Global Perspective

The global economy is also worth paying attention to. The operations in the Japanese currency market suggest that the government may intervene to support the yen. Basically, the "yen rebound" ( occurred simultaneously with a sudden increase in the value of the yen ) and a decrease in the dollar index, raising speculation that the Bank of Japan may intervene in the currency market to influence the value of the yen.

At the same time, South Africa is taking measures to regulate Crypto Assets, indicating an increase in institutional interest in digital assets there. In contrast, Venezuela is facing difficulties in using a certain stablecoin for oil transactions due to sanctions risk.

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 Assets sector.
• An institutional-grade digital liquidity fund managed by an asset management company has over $375 million in managed assets, indicating strong institutional interest in digital assets.
• Hong Kong has launched six new Bitcoin and Ethereum ETFs, significantly expanding the regulated Crypto Assets investment options in the Asia region, reflecting the trend of regulatory approval for Crypto Assets investments.
• A certain company increased its total holdings to 214,400 BTC by purchasing more Bitcoin, continuing its Bitcoin investment strategy.
• A certain Ethereum development team is facing regulatory challenges, which may affect the legal classification of Ethereum and the broader regulatory handling of Crypto Assets.
• Australia plans to launch its first spot Bitcoin ETF before the end of the year, which may expand the region's Crypto Assets investment market.
• A stablecoin was launched on the TON blockchain to enhance the liquidity and accessibility of decentralized applications.
• Hong Kong plans to launch additional Bitcoin and Ethereum spot ETFs, further expanding regulated crypto asset investment options in the Asian market.
• The Korean won surpassed the US dollar in the first quarter of 2024 to become the most used currency in crypto trading, showcasing South Korea's increasing influence in the crypto assets field.
• The price of a certain NFT project has plummeted, marking a significant decline in the once thriving digital collectibles market.
• Bitcoin miners move $3 million in long-dormant Bitcoin, sparking speculation that early miners may be cashing out.
• A certain asset management company's spot Bitcoin ETF has attracted $15 billion in inflows over three months, indicating an increase in investor confidence.
• Solana developers addressed network congestion issues to enhance transaction processing capabilities and alleviate bottlenecks.
• A payment company launched a stablecoin international remittance service for American customers, waiving transaction fees.
• A certain bank has launched a stablecoin trial on the Polygon network, integrating digital currency into the gaming and sports ecosystems, reflecting changes in Japan's regulatory environment.

On-chain Analysis

• Currently, despite Bitcoin's strong performance, overall interest in Crypto Assets is sluggish, especially towards altcoins.

• Despite the challenges in the market, major Bitcoin miners have not significantly exited, and miners with efficient equipment and low-cost electricity are still profitable. However, retail miners using older equipment are struggling with high electricity costs.

• The surge in Crypto Assets projects has increased market complexity. The latest report shows that as of April 2024, the number of Crypto Assets has risen to approximately 2.5 million, a 570% increase compared to 2022, although many projects or tokens may not be.