Analysis

Market Overview (Feb 12–Feb 18): MicroStrategy’s Profits and Bitcoin’s Record Highs

Key Points

MicroStrategy’s profits were reported at $3.5 billion, emphasizing the potential of crypto investments.
The Federal Reserve Chairman called for a legal framework for stablecoin amid crypto market expansion.
Bitcoin is reaching new all-time highs after 2 years, partly due to the forthcoming ‘halving’ event and Bitcoin ETFs.

Get an in-depth look at crypto’s big players and market trends. Dive into MicroStrategy’s profits, the BTC mining surge, Ripple’s expansion, and more.

Last week’s highlights big news (Feb 12–Feb 18)

MicroStrategy, a major player in the crypto environment, reported a profit of a whopping $3.5 billion USD. MicroStrategy’s profits highlight the potential of crypto investments and the industry’s overall growth.

Besides, Bitcoin miners are aggressively accumulating BTC as the mining difficulty soars to a record 81.73 trillion hashes. The mining activity surge indicates anticipation of the upcoming halving event in April.

In other news, Ripple is expanding its services in the United States by purchasing the New York Crypto Trust. This acquisition will allow Ripple to provide a broader range of services, including tokenizing assets for financial companies.

Meanwhile, online trading platform Robinhood announced a 10% increase in their Q4 crypto revenue compared to last year’s period, hitting $43 million. This growth underscores the increasing popularity and adoption of cryptocurrencies among retail investors.

On the flip side, Russian police recently clamped down on two unauthorized large-scale Bitcoin mining centers, seizing over 400 mining machines across Siberia and Dagestan.

In addition, Justin Sun has announced plans to develop a new layer 2 solution for Bitcoin, aiming to connect the Tron ecosystem with Bitcoin and promote the development of Defi and Ordinals.

Meanwhile, Citibank has been testing the tokenization of private investment funds through the Avalanche network. Arkham Intel discovered that ~98% of MicroStrategy’s BTC is stored on-chain, split between Coinbase Prime and Fidelity.

In ETF news, Franklin Templeton, which manages $1.6 trillion USD, became the 8th company to file for an Ethereum Spot ETF. Valkyrie Funds’ CIO, Steven McClurg, noted that while there are currently 10 Bitcoin Spot ETFs, not all have successfully attracted cash flows. He suggested that funds failing to attract cash may close due to competitive pressure and operating costs, leaving only 7-8 strong funds.

Finally, Ethiopia, known for its low electricity costs, has become a hot spot for Chinese mining companies following the country’s decision to open to Bitcoin mining in 2022, despite banning crypto trading.

Macroeconomics (Feb 12–Feb 18)

This month’s Consumer Price Index (CPI) has been recorded at 3.1%, slightly lower than last month’s 3.4% and above the estimated 2.9%. While the decline was expected, it was not as significant due to increased food prices and gas and electricity service costs.

The Core CPI, which excludes volatile food and energy prices, remained at 3.9% this month and the last, with an estimate of 3.7%. Several items decreased, but others, such as health care services, housing, and transportation services, are still rising.

Looking at the U.S. CPI inflation rate trend over the past 12 months, there’s been a gradual decrease from a high of 6.4% in January 2023 to this month’s 3.1%. However, the rate has fluctuated, with increased periods observed in between.

Federal Reserve Chairman Jerome Powell recently addressed the House Financial Services Committee about the need for a legal framework for stablecoin. He stated that the Federal Reserve will not issue a Central Bank Digital Currency (CBDC). If a CBDC is deemed necessary, it would require passing a law by Congress.

As for financial events in the U.S. this week, Monday was observed as Presidents’ Day, so there were no events and the stock market remained closed, including no Bitcoin ETF transactions.

The remaining significant events are the release of the FED’s January meeting minutes on Tuesday and several speeches by FED officials throughout the week. After the release of the meeting minutes, the market will scrutinize whether Chairman Powell’s statements align with the content of the meeting.

Prediction Market Crypto (Feb 12–Feb 18)

Bitcoin (BTC) has been on a remarkable journey in the past week, creating new all-time highs (ATHs) after two years. This upswing momentum has been partly fueled by the upcoming ‘halving’ event and Bitcoin exchange-traded funds (ETFs) involvement.

Interestingly, these Bitcoin ETFs purchase Bitcoin at an astonishing rate of 12.5 times the number of BTC mined daily. This results in roughly $300–500 million of ETF funds flowing into Bitcoin on an average day. This significant influx of funds strongly indicates the growing institutional interest in Bitcoin and its potential as a store of value.

Historically, when Bitcoin surpasses the ATH of its previous cycle and then adjusts, altcoins tend to experience a ‘crazy run.’ If this pattern holds, we can expect a significant uptick in the value of altcoins.

The possibility of Bitcoin breaking its previous ATH of $69K is high. If this occurs, it will indeed be a surprising event, primarily due to the rapid pace of this increase. The crypto market is known for its volatility, but the speed and magnitude of this potential rise are exceptional.

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

Tommy

With a passion for blockchain and crypto, I write articles on market news, in-depth analysis, and guides on safe and effective investing. My goal is to bring accurate, up-to-date, and useful information about crypto to the community, helping everyone understand the potential of blockchain technology and how to invest effectively.