Bitcoin investors, who are currently focused on ETF applications, would have faced challenges from U.S. macroeconomic data pressures this week, with critical importance on the narrative surrounding inflation and Federal Reserve policies. The crypto markets are searching for signs of easing interest rate hikes, with key expectations for Bitcoin and the broader cryptocurrency market.
On January 11th, the Consumer Price Index (CPI) and on January 12th, the Producer Price Index (PPI) for December will be released, known to cause short-term volatility in risk assets. The Kobeissi Letter, a trade source, has highlighted the return of volatility with the new year and the anticipation of the next Federal Reserve meeting in three weeks.
The Kobeissi Letter also referenced the upcoming Federal Open Market Committee (FOMC) meeting, where decisions on interest rate changes are made. However, data from CME Group’s FedWatch tool suggests that the market does not expect a significant policy shift this month.
In the background, another countdown for Bitcoin is nearing its final stages. The next Bitcoin halving event, which will cut the block reward for miners by 50% to 3.125 Bitcoin, is expected to occur in 100 days. Timo Oinonen from CryptoQuant indicated that this driving force is the upcoming halving event in April.
Despite the focus on the anticipated spot ETF products, the halving event could emerge as another value driver before the ETFs launch. Miner profitability will be impacted by the halving, but current data shows ongoing declines in Bitcoin holdings. Meanwhile, MicroStrategy, the technology firm with the largest corporate Bitcoin treasury among publicly traded companies, is reportedly increasing its purchases ahead of the halving event.