Bitcoin

<p><img src="https://www.blockhead.co/content/images/2023/03/BlockHeadBusiness-1-1.jpg" /></p><p>Welcome to the Blockhead Business newsletter, your go-to source for industry developments, news and insights in the world of digital assets.</p><p>Asia-led and global in scope, we bring you a weekly roundup of the most important business and economic developments in the industry, along with expert analysis and commentary from top professionals in the field.</p><p>Whether you&#39;re a fund manager, professional investor, or simply interested in the world of digital assets, our newsletter is your essential guide to navigating the future of finance. If you&#39;re here from a friend, <em><a href="https://www.blockhead.co/r/03a9a485?m&#61;22cfa91a-b8c7-4d8e-bee9-a563e08a696d" rel="noopener noreferrer nofollow">subscribe now</a></em>.</p><h2 id="header-0">CAPITAL FLOWS IN GLOBAL MARKETS</h2><h3 id="bitcoin-thrives-in-chaos-banking-crisis-eyed">Bitcoin Thrives in Chaos; Banking Crisis Eyed</h3><p>Global markets have been whipsawed in recent weeks as worries about contagion among banks have hammered financial stocks.</p><p>On Friday, world stock markets swooned after shares of lenders such as Deutsche Bank plummeted, while the flight from risk to safety propped up the dollar and sent bond rates down.</p><p>Deutsche&#39;s shares fell as much as 15% as its credit default swaps soared to their highest in more than four years, reflecting the surge in the cost of insuring debt against the risk of non-payment.</p><p>Nigel Green, chief executive of deVere Group, a financial advisor, said &#34;The growing sense of unease about the global banking system is heightening volatility in stock markets around the world.&#34;</p><h3 id="bitcoin-39-s-sustained-bull-run">Bitcoin&#39;s Sustained Bull Run</h3><p>Bitcoin has surged about 40% in less than two weeks. Many are now questioning if the banking crisis is fuelling the crypto rally.</p><p>&#34;The path of least resistance for the world&#39;s largest cryptocurrency is more to the upside. Now bitcoin is acting out as more of a hedge against inflation,&#34; said the chief investment officer at a large U.S. asset management firm in Boston.</p><p>&#34;And, one more thing is clear from recent trades: Bitcoin is thriving in chaos after it broke above US$28,000 for the first time since June,&#34; added the CIO.</p><p>For now, <a href="https://www.blockhead.co/2022/10/28/this-week-in-crypto-dogecoin-is-back/" rel="noopener noreferrer nofollow">Bitcoin</a> and other cryptos are rebuilding their stance as a hedge against inflation as they look to sustain their <a href="https://www.blockhead.co/2022/08/15/weekend-roundup-bitcoin-arrests-lawsuits-ponzis/" rel="noopener noreferrer nofollow">bullish run</a>.</p><p>Broadly, cryptocurrencies also remain unbowed by the latest regulatory crackdown.</p><p>Those significant gains are finally justifying the <a href="https://www.blockhead.co/2023/03/25/cryptos-gains-justify-bitcoin-mining-boom-in-the-wild-west/" rel="noopener noreferrer nofollow">bitcoin mining boom</a> in the &#34;Wild West.&#34;</p><p>The other narrative building is that of <a href="https://www.blockhead.co/2023/03/24/is-bitcoins-resurgence-driven-by-derivatives-demand/" rel="noopener noreferrer nofollow">renewed interest in cryptocurrency futures and options</a>.</p><p>One reason for this is the recent unrest in traditional financial institutions, which has led to a rise in the prices of digital assets and a rise in the number of derivatives traded.</p><p>Around the turn of the year, bitcoin entered a bleak midwinter following a year of dropping crypto prices, bankruptcies, and business scandals.</p><p>But bitcoin&#39;s value has risen rapidly in just a few months this year. More than 70% of its value has been added to the market.</p><h3 id="fed-39-s-outlook-shifts">Fed&#39;s Outlook Shifts</h3><p>The latest rise in the largest and most popular cryptocurrency is due to people&#39;s hopes that <a href="https://www.blockhead.co/2023/03/23/feds-outlook-shifts-bitcoins-surge-narrative-gains-traction/" rel="noopener noreferrer nofollow">interest rates will</a>, at best, stay the same and, at worst, go the other way and go down.</p><p>The market thinks that major central bank interest rate hikes have reached their pinnacle, and as a result, Bitcoin and other risky assets are projected to soar in value.</p><p>The Fed sounded close to calling time on interest rate hikes on Wednesday as it kept an eye on the banking turmoil.</p><p>&#34;Emergency Fed support for banks is at Great Financial Crisis proportions on some measures. Deposit flight from smaller banks remains a worry to boot. It should not be, but is,&#34; said Padhraic Garvey, regional head of research for Americas at ING.</p><p>&#34;That said, there is wider evidence pointing to no material rise in angst at a regional level in the past week. It&#39;s early days, and things can still turn sour. But a silver lining it is,&#34; he added.</p><h2 id="header-1">THE WEEK AHEAD</h2><h3 id="inflation-back-in-focus">Inflation Back in Focus</h3><p>It&#39;s a much quieter week next week following the central bank meetings.</p><p>Everyone&#39;s eyes will be drawn to the Fed&#39;s favoured measure of inflation, the core personal consumer (CPI) expenditure deflator, and consumer sentiment data, which will inevitably be impacted by the stresses in the financial system.</p><h4>Macro Calendar: Key Events in Developed Markets</h4><p><img src="https://academy-public.coinmarketcap.com/optimized-uploads/1419f5549e214f329d8d6c214483986b.png" /></p><h4><strong>&#x1f1fa;&#x1f1f8; </strong>United States: Financial sector chaos &amp; impact on inflation</h4><p>This week, the Fed raised interest rates by 25 basis points (bps), so all eyes will be on US policymakers&#39; newest assessment of the risks facing the economy and their projections for the future of monetary policy.</p><p>While central bankers insist that financial stability policy and price stability should be considered independently, investors believe that real economic growth and inflation expectations will be affected by feedback from stressors in the financial sector.</p><p>With the unpleasant news flow surrounding banks in recent weeks, everyone will be paying particular attention to consumer mood metrics in this area.</p><p>Plenty of housing data is also available, and the Fed&#39;s preferred inflation gauge, the core personal consumer expenditure deflator, is scheduled for release.</p><h2 id="header-2">Asia Week Ahead: Inflation, Inflation &amp; Activity</h2><p>Next week’s data calendar features inflation numbers from Australia and Japan plus activity data from Korea and China.</p><h3 id="macro-calendar-key-events-in-asia-next-week">Macro Calendar: Key Events in Asia Next Week</h3><p><img src="https://academy-public.coinmarketcap.com/optimized-uploads/390755398fcb433aa446df0312167157.png" /></p><h4>&#x1f1e6;&#x1f1fa; Australia: Should the central bank make a U-turn now?</h4><p>Inflation in Australia likely fell back below 7% in February as the unwinding of the holiday-induced increase in travel and leisure expenses, together with some reduced food prices, will somewhat offset higher petrol prices and some stickiness in other subcomponents.</p><p>If so, it would lend credence to the Reserve Bank of Australia&#39;s previous suggestions that rates are nearing a peak, with the most likely conclusion currently being another 25 bps raise, bringing the cash rate goal to 3.85%.</p><h4>&#x1f1ef;&#x1f1f5; Japan: Economy shows positive signs</h4><p>Japan’s economy is on the road to recovery and it appears that inflation has levelled out. As energy costs and base effects stabilise, the Tokyo CPI is likely to decrease further.</p><p>The service industry is where labour shortages have been most severe. As February progresses and normalcy is restored following the weather interruptions, production should increase.</p><h4><strong>&#x1f1f0;&#x1f1f7; </strong>Korea - Upcoming survey and activity data</h4><p>Next week, we&#39;ll get survey results and the latest monthly activity reports. Recent events in global banking have likely dampened consumer enthusiasm. But, the reopening of China may give entrepreneurs cause for optimism.</p><p>At the same time, market watchers expect that semiconductor output will drop owing to weak global demand for IT goods, while car manufacturing will climb steadily on the basis of excellent demand for electric vehicles.</p><h4>&#x1f1e8;&#x1f1f3; China - PMI data</h4><p>Next week, China will release its latest PMI readings.</p><p>The manufacturing purchasing managers&#39; index is anticipated to show a decrease in export orders and an increase in domestic orders from one month to the next.</p><p>That is because demand for exports is decreasing.</p><p>Although the Chinese economy&#39;s recovery has been sluggish, the non-manufacturing PMI is expected to show similar trends. The non-manufacturing PMI includes real estate activity.</p><p>There has been an uptick in house sales recently, which could help the services PMI, but this is not a growth driver.</p>

Blockhead Business Bulletin: Bitcoin a Hedge Against Looming Crisis & Inflation?

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