Market Update - October 4th 2024
Despite the Middle East conflict, market reactions have been muted, as indicated by stable oil prices. Bitcoin prices faced some impact, similar to reactions during Russia's invasion of Ukraine; however, back then, hawkish monetary policies also influenced prices. This time, higher-than-expected JOLTS job openings likely affected prices negatively.
Fundamentally, Bitcoin remains a non-sovereign store of value, supporting long-term prices, especially when governments like Israel restrict the circulation of traditional assets like gold and silver. During the Ukraine conflict, Bitcoin volumes in Ukraine surged by 240% as individuals used it to safely transport wealth—a safer option than carrying cash across borders.
On the economic front, a higher number of August job openings suggests a modest increase in labor demand, in contrast to the August payroll report. While this is welcomed by the Fed, the labor market shows signs of cooling, with the unemployment rate expected to rise to 4.5% by year-end.
Looking ahead, it's a big data week with JOLTS and ISM Services just published, and payroll report today. Expectations are for subdued growth, and any signs of weakness prompting central banks to consider interest rate cuts. Market flows indicate possible shifts, with net outflows of US$193 million so far this week, potentially conflict-related.
Lastly, Bitcoin miners saw improved economics last week, with average hash price increasing 7.5% to around $47 per PH/day—the third consecutive week of growth due to a decline in network hash rate.
Read more on: coinshares.com/resources/market-activity/
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