[Daily] Who will save BTC?

Good morning! Welcome to The Daily Moon. It’s a bad week for Solana. Two of its DeFi projects, Friktion and Everlend, will soon shut down. They just don’t have the liquidity to continue. In case you are wondering why, the reason is SBF.

As of Thursday, 8PM IST

The markets recovered. Bitcoin was at $23,900 levels and Ethereum inched closer to $1,700.  Nasdaq rose in early trade. Back home, Sensex had marginal gains while Nifty ended flat. 

Will Institutions Save BTC?

BTC moved from $21,000 to $22,000 and then quickly zoomed to $23,000. All within a month. But now it looks like Bitcoin’s rally may be short-lived. The bull momentum has turned lukewarm. Institutional investors, however, are still interested. 

What’s happened?The bulls have taken a break. A technical indicator called Relative Strength Index, or RSI, has fallen below 70. This means there is caution in the market. Plus, there was a slide in miner revenues, which forced many to encash their tokens. 

But the big investors are hereInstitutions have held onto their BTC holdings. And in fact bought more. There is Open Interest in Bitcoin. To simplify, Open Interest is the number of futures contracts held by investors at the end of each day. The higher the interest, the higher the cash flows into BTC. It’s institutions that are dominant in CME contracts right now. This is a big deal because CME typically drives BTC’s prices. 

How come?The large institutions have money. If they like it, they buy it. Current stats show individual investors will make good profits if they sell right now. Corporate buyers, on the other hand, are in HODL mode. That means institutions still hold the key. 

Fed Dampens The Spirits

The US Fed hiked interest rates by 0.25%. While this was expected, it brought down the mood a little. 

What’s on the plate?So we know that inflation is down globally (Yay?!). But the risk still remains, and the US Fed won’t let that slide. The Fed said that there will be many more hikes (sigh). Bitcoin breached $24,000 immediately after the hike, but dipped once investors read the fine print.  

So what’s up with inflation?For starters, it has eased. Inflation fell to 6.5% in December compared to 7.1% in the previous month. The problem is that it is still high from the Fed’s POV. The central bank wants inflation to be brought down to 2%. That’s a lot of work. So it will do whatever it takes to get there. 

Meta’s Expensive Dreams

Mark Zuckerberg never gives up, does he? Yet again, Meta lost money building its metaverse dream. A lot of money. $13.7 billion to be exact. And it will continue to post more losses in Reality Labs, its metaverse division. 

It’s bleedingWe’ve known how the metaverse division has bled since launch. In the fourth quarter of 2022, it had a $4.3 billion loss. That’s the largest-ever quarterly loss. The revenue wasn’t spectacular either. Reality Labs collected $2.16 billion in revenue for 2022, a slight decline from $2.27 billion in 2021. That’s less than 2% of the total sales at Meta. But Zuck believes that “there are no signals” to think otherwise. It is a long-term bet that will need more capital. 

But why the cheer? Meta’s stock rose despite the metaverse misery. That’s because the overall metrics, revenues, ads, and active users were mostly okay. Wall Street probably expected Meta to perform far worse. At least there is relief for now. 

Polygon Tops NFTs. Again

Polygon beat Ethereum. Again. More NFTs were sold on Polygon than Ethereum. And yes, the Donald Trump cards topped the charts. 🙄

Show me the numbers There were 1.5 million NFTs sold on Polygon. On Ethereum, this number was a little over 1.1 million. Overall, Bored Apes led the NFT surge in January. And yes, they are still on ETH. 

Why has ETH Lost?TL;DR: gas fees. Ethereum’s gas fees are pretty high and can sometimes be more than the base price of the asset. Polygon is affordable and has been winning deals with big names such as Meta, Starbucks, and Reddit. 

ICYMI NFTZ, the world’s first exchange-traded fund for NFTs, will shut down this month.

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