Weekly Institutional Insights — Rising Consumer Confidence and Decelerating Inflation Fuel Optimism; Solana in Focus From Crypto Events

Sep 30, 2024: Our weekly Institutional Insights explores the latest market developments — market performance, industry news, exchange-traded fund (ETF) flows, trending topics, upcoming events and token unlocks — to help you supercharge your crypto trading.

Enjoy our weekly take on the market!

Macro Overview — U.S. Consumer Sentiment Rises

Source: Bloomberg

U.S. consumer sentiment in September reached a five-month high, buoyed by optimism following the Federal Reserve's recent interest rate cut. The University of Michigan’s final sentiment index increased to 70.1, up from a preliminary of 69 and significantly higher than August's 67.9.

Consumers now expect inflation to rise at an annual rate of 2.7%, the lowest since late 2020, and anticipate only a 3.1% increase over the next five to ten years. This uptick in sentiment follows the Fed's decision to lower interest rates by half a percentage point on September 18, 2024, a move aimed at mitigating potential job market declines. The resulting reduced borrowing costs have positively influenced consumer outlook regarding the economy and personal finances.

Government data indicated modest household spending growth in August 2024. Despite earlier concerns about the labor market, consumer views on unemployment have improved, reflecting the Fed's actions. Notably, 55% of respondents expect borrowing costs to decline in the coming year, enhancing favorable perceptions of buying conditions for large purchases.

Weekly Crypto Highlight — Solana in Focus From Crypto Events

Last week in Singapore, the crypto community was buzzing with excitement at two major conferences: Solana Breakpoint 2024 and TOKEN2049. These events sparked lively discussions, thrilling announcements and extensive networking opportunities.

At Solana Breakpoint, attendees expressed enthusiasm for a shift in focus from infrastructure to product development, leaving many feeling optimistic about Solana's trajectory. Notable announcements included Solana's new phone, Solana Seeker, which aims to enhance the mobile crypto experience. Huma Finance revealed its expansion to Solana, boasting over $1.9 billion in transactions. The Firedancer client received high praise for its resilience and efficiency, showcasing the ability to handle over 1 million transactions per second. Additionally, the Eclipse Layer 2 solution on Ethereum, which utilizes the Solana Virtual Machine (SVM), is set to become publicly accessible next month and is already partnering with various projects.

The conference also introduced exciting newcomers, including Pump Science, a marketplace for testing longevity compounds, and Mantis^®, a Layer 2 solution focused on user intent processing. Engaging debates further enlivened the atmosphere, tackling topics such as the future of the Solana Foundation and the viability of NFTs.

Overall, Solana Breakpoint highlighted both established protocols and innovative projects, marking it as a pivotal event in the crypto landscape.

Bitcoin Spot ETF Flows 

Total Bitcoin Spot ETF Flows.Source: CoinGlass, as of Sep 27, 2024

Bitcoin Spot ETFs have experienced a notable increase in daily inflows over the past week, reflecting a growing interest in Bitcoin as an investment vehicle. This uptick can be attributed in part to the August personal consumption expenditures (PCE) data, which came in below expectations, suggesting a more stable economic environment. Additionally, the University of Michigan’s consumer sentiment index showed an increase, signaling that consumers are feeling more optimistic about the economy. This combination of positive economic indicators has fueled excitement in the cryptocurrency market, drawing in both retail and institutional investors.

As Bitcoin consolidates around the $65,000 level, many analysts are now setting their sights on $70,000 or even a new all-time high as the next short-term target. This consolidation phase indicates a strong support level. If Bitcoin can maintain momentum, it may break through this resistance and reach new price milestones.

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