Daily News | US Will Introduce Its First Version of the Crypto Accounting System, JPMorgan Chase Predicts that ETH Will Outperform BTC Next Year

Crypto Daily Digest: The United States will introduce its first version of crypto accounting , JPMorgan Chase predicts that Ethereum will outperform Bitcoin next year

On Wednesday, the Financial Accounting Standards Board (FASB) released the first batch of crypto accounting rules, requiring companies to measure their holdings of cryptocurrencies at fair value. The new regulations will come into effect in 2025, but allow for early adoption.

This rule change means that companies such as MicroStrategy, Tesla and Block will be able to record the value highs and lows of their crypto holdings. According to the new regulations, companies holding cryptocurrencies such as Bitcoin or Ethereum will need to record these tokens at fair value, which is the latest market value. Changes in fair value will be directly recognized in net income.

According to the new rules, companies must separately record their crypto assets as an item on their balance sheet. They must also disclose a significant amount of crypto holdings and any restrictions on these holdings in the footnotes of each reporting period. Every year, they must reconcile or disclose changes in the opening and ending balances of crypto assets by category.

In terms of regulation, Rostin Behnam, Chairman of the Commodity Futures Trading Commission (CFTC) in the United States, stated that under current law, most crypto assets are commodities, and he acknowledges that regulatory agencies are engaged in a “turf war” over who has the authority to regulate the crypto industry.

When discussing the regulatory complexity faced by the crypto industry, Behnam emphasized the need for urgent legislative action and stated that “members of Congress are working hard to understand the situation.” Behnam pointed out that one of the challenges in regulating digital assets is the ongoing “turf war” among various regulatory agencies in the country, especially the issue between the US Securities and Exchange Commission (SEC) and the CFTC regarding who will regulate the industry. This conflict has become a major obstacle to establishing clear regulatory guidelines for digital assets and the broader crypto industry.

As the market rebounds, well-known investment banks have also come out to grab traffic. JPMorgan analysts say that the overall crypto market remains “cautious” in the coming year, but Ethereum’s performance in 2024 may surpass that of Bitcoin and other cryptocurrencies.

JPMorgan analysts led by Nikolaos Panigrtzoglou wrote in a report on Wednesday: “We believe that Ethereum will re-establish its position next year and regain market share in the crypto eco.” The main catalyst is the EIP-4844 upgrade, which is expected to take place in the first half of 2024. This upgrade may take a bigger step towards improving Ethereum’s network activities, thereby helping Ethereum perform well.

JPMorgan analysts reiterated that this upgrade is particularly beneficial for L2 networks such as Arbitrum and Optimism, as it provides additional temporary data space to increase network throughput and reduce transaction costs for Ethereum L2 networks. JPMorgan analysts also stated that factors seen as favorable for Bitcoin next year, including the possible approval of spot ETFs and the upcoming halving, have been reflected in the price.

The analyst concluded, “given that the current ratio of Bitcoin prices to production costs is about twice, this means that the Bitcoin halving in 2024 has been largely reflected in the price.”

Matthew McDermott, Global Head of Digital Assets at Goldman Sachs, said that it is expected that blockchain based asset trading volume will “significantly increase” in the next one or two years. McDermott stated that as the market anticipates that US securities regulators will soon approve applications for spot Bitcoin ETFs (exchange traded funds), Goldman Sachs has also seen an increasing interest in crypto derivatives trading among clients.

Bitcoin rose more than 50% this quarter, but McDermott stated that he still focuses on developing digital assets beyond cryptocurrency, including issuing blockchain based tokens representing traditional assets such as bonds. He stated that there is a “huge demand” for digital assets and there has been “significant growth” in the past 12 months; The use of blockchain can improve operational and settlement efficiency, as well as “de-risk” financial markets; If securities trading is conducted through blockchain, collateral and liquidity can be sent between parties faster and more accurately.

Today’s Main Token Trends

BTC

Following the overall market’s rise early yesterday, the four-hour chart has pulled back above the central axis of the upward trend. In the short term, it is expected to continue the bullish trend with rapid rebounds. Weekly chart resistance is at $45,345 and $47,990. For long-term strategies, waiting for a second pullback is suggested for a conservative approach, with long-term support at $30,888.

ETH

Last week, the price target of $2,381 for ETH was achieved, and the daily chart suggests a possible high-level symmetrical triangle formation. Caution is advised for a significant pullback, while the long-term recommendation is to maintain the upward trend. The breakout target is at $2,805, with long-term targets at $8,025 and $12,397.

GT

The weekly chart shows a structured market approaching the end of the second phase, entering the third bull market cycle. Discussing the third bull market cycle, where will GT’s peak target be?

In the second phase, GT reached the first target at $2.9321 (which corresponds to the 4.236 of the first phase Fibonacci sequence) and the second target at $12.8770.

The yellow triangle represents the range of the second phase, with potential targets for the third phase at $28.2426, $39.1555, and $44.9951.

If a sustained bull market forms, prices could continue to impact $110.3832 and $176.8363, depending on fund accumulation and opportunities in the next bull market cycle.

Macro: The Federal Reserve raises the dovish stance, the Fed Dot Plot suggests a 75 basis point interest rate cut next year

The Federal Reserve announced that interest rates will remain unchanged in the range of 5.25% to 5.50%, which is in line with expectations. Since the beginning of this year, the Federal Reserve has raised interest rates by a total of 100 basis points and has maintained them at their current level since September.

Due to the obvious dovish stance of the Federal Reserve, US Treasury yields fell across the board, and the 10-year US Treasury yield narrowly avoided the 4% mark, ultimately closing at 4.024%; The two-year US Treasury yield, which is more sensitive to the Federal Reserve’s policy interest rates, fell more than 30 basis points on the day and closed at 4.429%. The US dollar index plunged intraday, falling below the 103 mark and ultimately closing down 0.809% at 102.98.

Spot gold rose sharply after the Federal Reserve’s interest rate decision was announced, reaching $2,020 per ounce. It rose nearly $50 on the day and ultimately closed up 2.26% at $2024.26 per ounce; Spot silver rose 4.65% to close at $23.81 per ounce.

Due to a more than expected decrease in US crude oil inventories and concerns about Middle Eastern oil supply security caused by the attack on Red Sea tankers, international crude oil has rebounded slightly from a 5-month low. WTI crude oil closed up 1.7% at $69.95 per barrel; Brent crude oil rose 1.81% to $74.81 per barrel.

The three major US stock indexes collectively closed higher, with the Dow Jones Industrial Average up 1.4%, reaching 37090 points, setting a new closing high. The S&P 500 index closed up 1.37%, and the Nasdaq went up 1.38%.

The Federal Reserve’s FOMC statement shows that the growth rate of the US economy has slowed down from the strong growth momentum in the third quarter. Employment growth has slowed down, but remains strong, and the unemployment rate remains low. US inflation has slowed down in the past year, but remains high, and FOMC remains firmly committed to the goal of restoring inflation to 2%.

The reduction rate of holdings in US treasury bond bonds and MBS will remain unchanged. The Federal Reserve’s Dot Plot suggests a 75 basis point interest rate cut next year, with a median expected federal funds rate of 4.6% by the end of 2024. The committee’s “Dot Plot” also depicts four rate cuts in 2025 and three rate cuts in 2026, which will adjust the federal funds rate to the range of 2% to 2.25%. It stated that it is prepared to further tighten monetary policy under suitable conditions.

The Dot Plot shows that eight officials believe that the rate cut next year will be less than 75 basis points, while five officials expect it to be even greater. This is the most chaotic “Dot Plot” that has appeared in many years.

As the Federal Reserve shifts towards a dovish stance and the market becomes more dovish, it is now priced at a 150 basis point rate cut in 2024 (election year). Since Powell did not respond to the recent interest rate cut, US treasury bond bonds soared, US stocks jumped, and traders raised their bets on the interest rate cut in March to almost certain extent (75%).