Bitcoin’s Resilient Climb
Bitcoin (BTC) has been dancing above the $22,500 mark since January 20, showcasing a whopping 40.5% gain this month. As if that’s not impressive enough, this surge came hand-in-hand with a stock market rally spurred by China casting off three years of stringent COVID-19 measures. It’s like the world decided to throw a welcome back party for investments.
Stock Market’s Hot Performers
Leading the charge in the stock market, various e-commerce and entertainment companies have been catching everyone’s attention. Some stars include:
- Warner Bros (WBD) – up 54%
- Shopify (SHOP) – up 42%
- MercadoLibre (MELI) – up 41%
- Carnival Corp (CCL) – up 35%
- Paramount Global (PARA) – up 35%
Corporate earnings have been stealing the show as well, with Chevron announcing a jaw-dropping profit of $36.5 billion. Now that’s what I call a happy investor!
Anticipating Apple’s Earnings
Now, hold onto your hats because this February 2, Apple (AAPL) is expected to report an astronomical $96 billion in earnings for 2022. That’s enough to make Microsoft (MSFT) and their $67.4 billion seem like pocket change. Strong earnings like these validate current stock valuations, but let’s not throw all our eggs in one basket just yet.
The Curious Case of Crypto Demand
Americans are still very much in love with crypto, especially following the report from financial services firm Matrixport, which shows that a staggering 85% of recent purchasing activity comes from American institutional investors. It appears the big players aren’t bailing on crypto just yet!
Bitcoin Futures Markets and Professional Sentiment
As Bitcoin bulls light their celebratory fireworks after a recovery of 49% from its November low of $15,500, Bitcoin bears are still casting a long shadow. To understand the true sentiment among professional traders, we need to delve into the futures markets. The current demand for USD Coin (USDC) is indicating strong stablecoin buying from Asia, with premiums standing at 3.7%. This isn’t *just* a random figure—it’s a signal of retail traders dipping their toes back in.
Assessing Futures Premiums
Retail traders often sidestep quarterly futures due to their disconnect from spot markets. However, professional traders thrive on these, as they avoid fluctuations in funding rates. Healthy markets typically see the three-month futures annualized premium range between +4% to +8%. So, when the futures hover below this, it’s not a good sign.
The Bitcoin futures premium has recently breached the crucial 4% mark, indicating a renewed positivity lurking in the market after a lengthy bearish stint. But keep your eyes peeled—while the bulls gather steam, unexpected twists from the Federal Reserve could still sway the market.
What Lies Ahead?
The future is a mystery wrapped in an enigma after Bitcoin’s phenomenal January. With the Fed potentially shifting gears on interest rate hikes, all eyes will be on how economic indicators evolve. If solid corporate earnings can lend a helping hand to keep inflation in check, Bitcoin might just keep its inflation protection crown in the upcoming volatility.
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