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The cryptocurrency market has continued its downward spiral following the announcement of the Strategic Reserve. While the news did not include a clear long-term buying strategy, the establishment of the reserve remains a bullish development for the future. U.S. Crypto and AI Czar, David Sacks, indicated that the U.S. would pursue "budget-neutral strategies for acquiring additional bitcoin," which could potentially involve liquidating part of its $760 billion in gold reserves to buy BTC. The anticipated White House Crypto Summit on March 7th ultimately failed to meet expectations, with no significant announcements made. However, it did produce a framework for stablecoin regulation, which is expected by August, alongside promises of lighter regulatory measures. Despite these outcomes, the market response was muted, as expected bullish momentum did not materialize.
Bitcoin has fallen back to its 200-day moving average, and a sustained close below this level could signal further bearish pressure, potentially driving prices lower toward the pre-election zone around $73,000. Ethereum is testing its psychological support at $2,000, marking its lowest point since November 2023. Over the seven days leading up to March 9th, ETH experienced a nearly 20% drop, marking its largest weekly decline since November 2022. On a more positive note, the weekend's price action saw low trading volumes, which may suggest that the selling pressure is nearing its end.
The crypto Fear and Greed Index has plunged to a multi-year low of 17, signaling "extreme fear." This index takes into account factors such as price volatility, momentum, social media sentiment, Google trends, and Bitcoin’s market dominance. As a contrarian indicator, the current low could suggest that the market is ripe for a rebound in the short term, but timing is uncertain.
MicroStrategy has filed to offer up to $21 billion in preferred stock to raise funds for general purposes, including potential Bitcoin acquisitions, signaling their continued commitment to building their BTC position.
In broader financial markets, stock futures dropped on Monday as the previous week's sell-off pressures persisted. Trade negotiations between the U.S., Mexico, and Canada are ongoing, adding to market uncertainty, while investors brace for a heavy slate of economic reports this week.
Key economic data releases include the February Consumer Price Index on Wednesday, the Producer Price Index on Thursday, and the University of Michigan Consumer Sentiment report on Friday. As economic indicators like employment figures show signs of deterioration, expectations for rate cuts are rising. The probability of a 50bps cut by July has increased to 41%, up from just 17% a month ago. Furthermore, the likelihood of a 75bps cut has risen to 13%, compared to only 3% a month ago.
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Strategy seeks to raise up to $21 billion via STRK perpetual preferred stock to buy bitcoin
Strategy is looking to raise up to $21 billion through sales of its 8% Series A perpetual strike preferred stock (STRK), with proceeds intended for general corporate purposes, including bitcoin acquisitions. The offering is part of the company’s broader "21/21 plan" to raise $42 billion for bitcoin purchases. STRK holders will receive fixed 8% annual dividends, with the option to convert shares into class A common stock under certain conditions. Strategy currently holds 499,096 BTC, valued at over $41 billion, acquired at an average price of $66,357 per BTC.
US Department of Housing considers crypto and blockchain usage
The U.S. Department of Housing and Urban Development (HUD) is exploring the use of cryptocurrency and blockchain in its operations, ProPublica reported. Meetings have been held to discuss blockchain’s potential for monitoring HUD grants, with officials suggesting it could serve as a trial run for broader federal crypto adoption. Discussions also touched on stablecoin use, though HUD stated it has no current plans. This aligns with President Trump’s pro-crypto stance, including his recent executive order establishing a Strategic Bitcoin Reserve. At the White House Crypto Summit, Trump emphasized advancing stablecoin legislation and ending crypto debanking.
El Salvador continues accumulating bitcoin and now holds 6,111 BTC despite IMF pressure
El Salvador has continued its bitcoin accumulation despite an IMF agreement to scale back public sector involvement in crypto. On Sunday, the country purchased an additional 6 BTC, bringing its total holdings to 6,111.18 BTC, worth approximately $504 million. The move comes after El Salvador secured a $1.4 billion loan from the IMF in December, agreeing to limit bitcoin-related activities as part of the deal. However, President Nayib Bukele reaffirmed the country’s commitment to bitcoin, stating last week that purchases will not stop despite external pressure.
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This research is for informational use only. This is not investment advice. Other than disclosures relating to Secure Digital Markets this research is based on current public information that we consider reliable, but we do not represent it is accurate or complete, and it should not be relied on as such. The information, opinions, estimates, and forecasts contained herein are as of the date hereof and are subject to change without prior notification. We seek to update our research as appropriate.
Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation. The price of crypto assets may rise or fall because of changes in the broad market or changes in a company's financial condition, sometimes rapidly or unpredictably. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. Fluctuations in exchange rates could have adverse effects on the value or price of, or income derived from, certain investments. We and our affiliates, officers, directors, and employees, excluding equity and credit analysts, will from time to time have long or short positions in, act as principal in, and buy or sell, the securities or derivatives, if any, referred to in this research.
The information on which the analysis is based has been obtained from sources believed to be reliable such as, for example, the company’s financial statements filed with a regulator, company website, company white paper, pitchbook and any other sources. While Secure Digital Markets has obtained data, statistics, and information from sources it believes to be reliable, it does not perform an audit or seek independent verification of any of the data, statistics, and information it receives.
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Crypto and/or digital currencies involve substantial risk, are speculative in nature and may not perform as expected. Many digital currency platforms are not subject to regulatory supervision, unlike regulated exchanges. Some platforms may commingle customer assets in shared accounts and provide inadequate custody, which may affect whether or how investors can withdraw their currency and/or subject them to money laundering. Digital currencies may be vulnerable to hacks and cyber fraud as well as significant volatility and price swings.
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