The Breakdown First Five - Thursday, May 2, 2024

Welcome back to The Breakdown First Five — the 5 most interesting and/or important stories in bitcoin, crypto, and markets to start your day.

5. ETF Outflow Woes

Spot Bitcoin ETFs recorded their largest ever daily outflows, losing $563M. Fidelity led the way with $191M in redemptions, outpacing Grayscale at $167M. Blackrock saw its first ever daily outflow at almost $37M. Each product was in the red for the day. While ETF hype is over, this looks more like a large trade unwind, potentially linked to month end positioning.   

4. Standard Chartered Turns Bearish

One time permabulls Standard Chartered have published their first bearish call for the cycle, suggesting that Bitcoin is headed for $50,000. Bank analysts suggested that the move below $60,000 has opened the door to much lower prices in the short term. They wrote that “liquidity matters when it matters”, and suggested it matters now. Last month, the bank set an end of year target of $150,000 Bitcoin.

3. MSTR Announces BTC DID

Microstrategy have announced plans to launch a Bitcoin based decentralized ID solution. When the firm rebranded as a Bitcoin development company it wasn’t clear what that meant, but apparently Microstrategy has designs to bring financial infrastructure to Bitcoin. Michael Saylor claimed the tech can process 10,000 identifiers in a single Bitcoin transaction, leveraging the blockchain as a data source in a similar way to ordinals. 

2. Block Investigated

Jack Dorsey’s fintech company Block is reportedly being examined by Federal prosecutors over alleged sanctions violations and other compliance issues. NBC reports that former employees have turned whistleblowers about “widespread” non-compliance. Crypto transactions are the prime target, but the issues are claimed to extend to Square and Cash App divisions. The Block maintains that it did not knowingly violate international sanctions. 

1. Powell Not Scared of Inflation

Fed Chair Jerome Powell took rate hikes off the table, suggesting recently resurgent inflation is nothing to worry about. While he acknowledged the lack of further progress and no confidence that rate cuts will become appropriate, Powell seemed more worried about a sudden deterioration in the labor market. The Federal Reserve has held rates steady and announced a winding back of QT. No news, but not necessarily good news as Bitcoin round tripped.