Matrixport Research: With CPI Decline, BTC Expected to Achieve 12% Growth in the Next Two Months

Matrix Institute’s latest research shows that the focus for the coming week will be:

• US inflation rate is declining, BTC may rise with the recovery of ETF inflows.
• Perptual Futures investors are positioning themselves in advance to prepare for the potential launch of ETH ETFs.
• Trump hopes to gain more votes by supporting cryptocurrencies, and the Meme coins themed after Trump are pumping.

The correlation between CPI and BTC prices has strengthened. If the next CPI data is below 3.3%, BTC is expected to reach a new high.

After 24 years, the price performance of BTC has been slightly weak in January, surged in March, and entered a consolidation phase in the past two months. With the approval of BTC ETF, the price driver of BTC has shifted from application-driven to more influenced by macro factors, with CPI being one of them.

(BTC price compared to CPI)

Data shows the correlation between BTC ETF market inflows and outflows and CPI. In January, the CPI index reached 3.4%, higher than the expected 3.2% and the previous month’s record of 3.1%, leading to outflows in GBTC ETF. In February, the CPI index was 3.1%, lower than the expected 3.4%, and BTC ETF inflows gradually recovered and accelerated slightly. In March, the CPI was 3.2%, and the inflow of funds into BTC ETF immediately stopped. In April, the CPI exceeded the expected 3.4% and reached 3.5%, causing BTC to drop to $60,000 and further decline to around $56,500 on April 30th due to weak ETF fund flow in Hong Kong. In May, the CPI was 3.4% (lower than the previous month’s 3.5% but in line with the expected 3.4%), and Bitcoin rebounded. Moreover, if the inflation index reaches 3.3% or lower in June, BTC price is expected to reach ATH, providing impetus for net inflows in the BTC ETF market.

Meanwhile, the seasonal trend in June is relatively positive with an average return rate of 4%+, and July is even stronger with an average return rate of 8%+. Therefore, benefiting from the positive seasonal factors, Bitcoin is expected to achieve a gain of over 12% in the next two months.

(BTC Seasonal Performance)

ETH perpetual futures market inflow increases, lack of confidence in ETH’s sharp rise after the launch of ETH ETF

Market data reflects investors’ views on ETH ETF. After the SEC approved the first part of the ETF application, the Perptual Futures market for ETH saw a rapid influx of $4 billion in funds. Based on historical experience, investors may profit from long positions in Ethereum before the ETH ETFs start trading, as the price usually drops after the new products are listed. According to the latest report from Grayscale, the price of ETH ETF is further limited compared to the BTC ETF launched in early 24 due to the initial overvaluation.

The political attributes of encrypted assets are enhanced, and the attitude of the next government towards this emerging digital asset will be crucial.

The second phase of the 2024 US election poll conducted by Gray Release shows that due to geopolitical tensions and inflation, more and more voters are turning to Bitcoin, with a support rate of 41%. 47% of voters expect their investment portfolios to include cryptocurrencies, higher than the 40% at the end of last year. About 32% of voters expressed willingness to learn about cryptocurrencies as investments.

Combined with the SEC approval ETH ETF, Crypto Assets has become an issue that cannot be ignored by both parties, and the next administration’s attitude toward this emerging digital asset will be crucial. At present, the two strong contenders in the general election have shown an attitude of proximity to encryption assets and actively created related topics, and the political nature of encryption assets is becoming more and more high. As the November 2024 presidential election approaches, Matrixport’s May 10, 2024 report, “Trump May Be the Biggest pump Driver Bitcoin This Year,” predicts that a rise pro-economic, Crypto Assets-friendly Trump is leading the polls could push BTC price pump as the November 2024 presidential election approaches.

The market capitalization of the Trump-themed Meme Coin (Trump-USDT) has tripled in just three weeks.

**The market capitalization of the most popular Trump-themed meme coin (Trump-USDT) has risen threefold to $600 million in just three weeks. As we mentioned in last week’s report, “U.S. Politics Is Shifting to Support Crypto Assets,” not only Trump and Republicans, but also Democrats, as well as President Biden and the White House, are seen as pro-Crypto Assets.

In the election years (2012, 2016, and 2020), BTC performed exceptionally well - averaging a 192% pump, and the US stock market also performed well. With the popularity of the Trump-themed Meme coin (Trump-USDT), it is not ruled out that more series of Meme coins will emerge in the future.

The above views are from Matrix on Target, contact us to get the complete Matrix on Target report.

Disclaimer: The market carries risks, and investment should be cautious. This article does not constitute investment advice. The trading of digital assets may involve significant risks and instability. Investment decisions should be made after careful consideration of individual circumstances and consultation with financial professionals. Matrixport is not responsible for any investment decisions based on the information provided in this content.