Disclaimer: This post contains thoughts on crypto, a volatile and risky asset class. It is not investment advice, and you should do your own research. All information is for educational purposes only. Please don’t take risks with money you’re not willing to lose.

With Bitcoin leading the way, most tokens have experienced sideways price action since March’s local top of ~$74k. Just yesterday, BTC dipped as low as $59k before finding support. Despite the bearish PA, overall sentiment has remained positive in lieu of the Bitcoin halving, the approval of Hong Kong ETFs, and the innovation of Runes.

Macro Fears

With a consistent flow of catalysts, the poor month can be attributed to macroeconomic factors such as stagnant interest rates, tax season, and looming war in the Middle East.

While investors were optimistic that March’s euphoria would continue through the halving, the Fed’s most recent meeting confirmed that there would once again be no movement in interest rates this month. Extending the FOMC’s streak of unchanging targets since last July, three cuts throughout the remainder of the year feels increasingly unlikely.

In addition to the rather uninspiring Fed meeting, tax season further sucked liquidity from the markets as investors raced to book profits and pay the big man. US citizens were obligated to pay their taxes by April 15, 2024, which coincided with a week-long dump from $71k to as low as $62k.

Although conflict seems to have deescalated for now, growing tension between Iran and Israel has only worsened the month’s downtrend. On April 13, Iran issued a fleet of drones and missiles towards Israel - nearly 100% of which were intercepted with the aid of allied countries (US, UK, France). Despite counseling from world leaders, Israel later launched a counterstrike on an Iranian air base. Both parties have been passive since then, but it’s worth keeping an eye on as war has violent economic effects.

The Fourth BTC Halving

Despite the dwindling macro conditions, anticipation of the fourth Bitcoin halving propped up market sentiment. As of block 840,000 (April 19), successful miners now earn 3.125 BTC / block + network transaction fees. This figure derives from the previous mining reward which has been cut in half every four years since the genesis Bitcoin block.

To fully understand the importance of the halving requires some technical knowledge of Bitcoin - I’ll try to keep it simple. Satoshi Nakamoto fundamentally understood that the value of money comes from its scarcity. Unlike the debasing, seemingly endless supply of fiat currencies, Bitcoin was hard-coded to only ever have 21 million. Over 93% of this total supply has been mined, leaving roughly ~1.44m still to be brought into circulation via block rewards. While most of us invest in BTC through exchanges, miners invest in the machinery, electricity, and computation required in order to secure the network. Assuming >50% of other nodes agree, the party that first completes each pending block’s ‘complex puzzle’ is rewarded in newly mined Bitcoin. This process, Proof-of-Work, incentivizes trustless parties to relay accurate information (all while maintaining decentralization). Therefore, as the block reward continually halves, competition amongst miners increases and further incentivizes truthful validations. Bitcoin’s hard capped supply and halving mechanism ultimately represent necessary features of an ‘ultrasound’ currency, integral to fulfilling Satoshi’s anti-fiat vision.

While the halving is historical nonetheless, it tends to coincide with rising prices across the entire market. However, unlike previous cycles, Bitcoin has reached an all-time high ahead of this year’s halving - perhaps being front run with the introduction of US-based ETF products.

Hong Kong ETFs Launch

In other positive news, Hong Kong’s Securities and Futures Commission (SFC) approved three ETF providers to offer spot BTC / ETH funds. This effectively signifies Asia’s first opportunity for retail investors to traditionally hold and trade crypto. As the SEC declined them earlier this year for US providers, it also represents the first ETH ETFs worldwide.

The respective funds launched this past week and have unfortunately seen underwhelming interest, only garnering $12.4m in volume during the first day. Of this total, roughly 86% were BTC inflows while the small remainder went towards ETH. This sits in comparison to the US spot BTC ETFs first-day trading volume of $4.6B. Albeit the market looks undesirable at the moment, I expect these figures to increase as sentiment shifts.

What are Runes?

Perhaps in an attempt to avoid the charts, DeFi participants spent the month of April following the novel creation of Runes.

Ever since Ordinals (BTC NFTs) were introduced, developers have been exploring building on Bitcoin - a chain that is almost unanimously agreed upon as clunky and unfit for DeFi applications. Regardless, some appreciate the historical relevance that it carries and wish to do so.

Runes, unlike Ordinals, are fungible tokens. In layman’s terms, they’re interchangeable and meant to be traded in any divisibility. In these ways, they most closely resemble memecoins and have so far been treated as such. $PUPS, for example, one of the market’s most popular offerings, serves as the community coin for Bitcoin Puppets, an S-tier Ordinals collection. Runes effectively expand the growing BTC DeFi ecosystem as distributed tokens attract more participants at lower entries.

For a full technical breakdown:

Coinbase Lists WIF, PEPE

Amidst worsening markets, Coinbase has been quite active over the past few weeks. Continually building out a full-stack product suite, their new smart wallet has officially integrated Jupiter, the most popular decentralized exchange (DEX) on Solana. In other words, millions of Coinbase Wallet users can now natively / seamlessly trade SPL-20 tokens.

Coinbase has also suddenly listed prominent memecoins WIF and PEPE as perpetual contracts. This symbolizes a massive step towards eventual spot listings for both…

That’s all I have! Sticking to the bigger picture and holding comfy :)