Nvidia Supply Concerns Ease, but Long-Term Challenges Remain
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Quick Take
Recent data analysis reveals an all-time high in Bitcoin’s long-term holder supply, defined as Bitcoin held for more than 155 days, reaching 14.654 million. Conversely, the short-term holder supply, considering Bitcoin holdings of less than 155 days, has plummeted to an all-time low of 2.561 million if we exclude the year 2011. This presents an unprecedented divergence in Bitcoin’s supply dynamics.
The widening gap could be indicative of a stronger conviction in Bitcoin’s long-term potential among investors, leading to increased holding periods. On the flip side, it may also suggest a diminishing interest among short-term speculators, possibly due to market volatility or shifting investment trends. Regardless, this divergence presents an intriguing dynamic in the Bitcoin market that warrants close observation for its potential broader market implications.
The data analysis underscores the evolving landscape of Bitcoin ownership and its potential impact on liquidity, volatility, and market sentiment, providing valuable insight for investors and institutions navigating the cryptocurrency market.
The post Bitcoin’s long-term holder supply hits record high as short-term interest dips appeared first on CryptoSlate.
(Bloomberg) — The highest long-term Treasury yields in years are headed for a major hearing next week as investors place their bids for two risky auctions — right before the Federal Reserve’s potentially game-changing annual gathering at Jackson Hole.
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A relentless Treasury-market selloff this month wiped out what was left of year-to-date gains that at one point exceeded 4%. Next week, the US Treasury will sell 20-year bonds and 30-year inflation-protected bonds, demand for which is notoriously unpredictable. If investors shy away, even higher yields will be needed to lure them back.
For most of the past two years, Treasury yields were led higher by short-dated tenors in anticipation of Fed interest-rate increases that have totaled more than five percentage points. Over the past month, though, long-maturity yields have taken the baton as focus has shifted to the labor market’s refusal to buckle, a still-elevated inflation rate, and an expanding supply of new Treasuries sold to close a growing federal budget deficit.
“No one wants to step in front of the issuance freight train, especially in the long end at the moment,” said George Catrambone, head of fixed income, DWS Americas. “There aren’t great reasons to front-run a hawkish Fed, additional supply and very resilient US economic data prints.”
The pain is registering acutely for bondholders, with a Bloomberg index comprised of Treasuries maturing in 10 years and more slumping 5.7% so far in August, on course for its worst month since September.
Read More: BofA’s Warning of a ‘5% World’ Sinks In as Bond Yields Surge (1)
The coming week’s auctions are particularly worrisome because 20-year bonds and 30-year TIPS have smaller investor bases than other Treasury products, so demand will be closely followed for any hint the current rout is nearing an end, or perhaps has further room to run.
To be sure, some people have a soft spot for the 20-year, in part because it has long stood out as being the highest-yielding Treasury benchmark and traded above those on both 10- and 30-year bonds.
Read More: Wall Street Falls Hard for Once-Unloved 20-Year Treasury Bonds
A key consideration around the 30-year TIPS sale is whether pension funds and insurance companies bite at a 2%-plus yield not seen since 2011. Some on Wall Street believe this group of investors, long absent from these auctions, may start returning.
Once the dust settles from the debt sales, the last full week of August — in addition to being a popular holiday week with few major economic releases — also features the Fed’s annual confab in Jackson Hole, which occasionally has been used to reshape market expectations for monetary policy.
A hawkish tone from Chair Jerome Powell Friday will likely test a bond market that still retains faith in rate cuts arriving next year. It’s a belief that explains why many fund managers favor owning the five-to-10-year area of the market, according to positioning surveys.
But a tug of war is playing out in the long end, where a surge in so-called real yields, insulated from the effects of inflation, represent the risk-free rate of return investors demand.
Investors want a higher premium for owning long-dated debt amid uncertainties over data that could prompt another Fed rate hike later this year and keep policy well above 5% in 2024. There’s also supply concerns as the Treasury boost sales to fund the fiscal deficit while the Fed withdraws from the market to shrink its balance sheet.
“The question of how much term premium needs to be priced is the big one,” Matthew Raskin, head of US rates strategy at Deutsche Bank, wrote in an email. “Some of the term structure models Fed staff use still have historically low longer-dated term premia, which seems … wrong.”
Read More: When Fed Cuts Rates, It May Still Be Tightening Via QT Program
For Meghan Swiber, director of US rates strategy at Bank of America, the focus is on whether a resilient economy means the Fed’s current long-run policy rate estimate of 2.5% should be adjusted higher.
“At Jackson Hole, there is really going to be two points of focus,” she said. First, “how much if at all they need to adjust the Fed funds rate higher,” and the second is “where do they think these longer run rates ultimately have to be, which the back end of the curve is really struggling with.”
What to Watch
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Economic calendar:
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Aug. 22: Philadelphia Fed non-manufacturing, existing home sales; Richmond Fed manufacturing and business conditions
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Aug. 23: MBA Mortgage Applications; S&P Global US manufacturing, services and composite PMIs; new home sales
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Aug. 24: Jobless claims; Chicago Fed activity index; durable goods orders; Kansas City Fed manufacturing index
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Aug. 25: U. of Michigan sentiment survey and inflation expectations survey; Kansas City Fed services activity
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Fed calendar
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Aug. 22: Richmond Fed President Tom Barkin, Chicago Fed President Austan Goolsbee; Fed Governor Michelle Bowman
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Aug. 24: Philadelphia Fed President Patrick Harker
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Aug. 25: Fed’s Harker on Bloomberg TV, Harker interview with Yahoo Finance Live, Fed Chair Jerome Powell speaks at Jackson Hole
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Auction calendar:
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Aug. 21: 13- and 26-week bills
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Aug. 22: 42-day cash management bills
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Aug. 23: 17-week bills; two-year floating rate notes; 20-year bonds
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Aug. 24: 4- and 8-week bills; 30-year TIPS
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On July 30, the amount of Bitcoin held by long-term holders reached an all-time high. According to data from blockchain analytics firm Glassnode, long-term holders now possess 14.55 million BTC, marking a new record in Bitcoin’s history.
Long-term holders (LTHs) are defined as addresses that have held onto their Bitcoin for over 155 days playing a crucial role in the Bitcoin market due to their tendency to hold onto their assets through market volatility and thereby reducing the available supply and potentially exerting upward pressure on prices.
Historically, the supply of Bitcoin held by long-term holders has followed a cyclical pattern, increasing during bear markets and decreasing during bull runs.
The recent surge in LTH supply occurred when Bitcoin’s price was below $30,000. This accumulation led to a decrease in the long-term holders’ realized price to $20,332, down from $22,539 at the start of the year. A 9.8% reduction in the realized price is noteworthy, showing that long-term holders have been strategically accumulating Bitcoin at lower prices amid the market downturn.
The decrease in the LTH realized price could have a profound impact on the Bitcoin market. It suggests that these holders are undeterred by lower prices and continue to accumulate, potentially providing a strong support level for Bitcoin. This could limit further downside and set the stage for a price rebound.
The recent all-time high in Bitcoin’s long-term holder supply could also have far-reaching implications. An increase in long-term holder supply during a bear market could signal the start of a new accumulation phase, potentially paving the way for the next bull run.
Conversely, a decrease in long-term holder supply during a bull market could indicate profit-taking and potential market tops.
The post Long-term Bitcoin holder supply posts new ATH, undeterred by price appeared first on CryptoSlate.
Companies that make parts for internal combustion engines are facing a harsh future.
Revenues for internal combustion engines, as well as fuel and exhaust systems, are expected to decline 44% through 2027, according to the 2023 Deloitte Automotive Supplier Study. Meanwhile, revenues for electric drivetrains and batteries or fuel cells are expected to rise 245%, the study found.
While the supply chain is shifting away from parts, the total powertrain part supply pie is also shrinking. An internal combustion powertrain has about 2,000 parts. Battery electric vehicle powertrains have about 20, sometimes less.
Automakers are also finding new ways to more efficiently manufacture parts through methods like giga casting. Attributed to Tesla, the technique involves using large machines to cast very large chunks of a vehicle all at once, instead of assembling one out of smaller parts.
While automakers bring more of their supply chain in-house, there are thousands of parts in cars that come from companies all over the world — a branching supply chain of firms each dependent on the success of the others.
Many of those companies are small, family owned firms that have been around for decades. But even the large, publicly traded suppliers such as Bosch, Denso, Magna and ZF are affected.
Bigger firms are either spinning out their internal combustion divisions or just winding them down to pivot toward EVs. But smaller suppliers often don’t have the capital to make those kinds of pivots, which means leaning into what they do best and getting creative.
Watch the video to learn more.
On-chain data shows that the Bitcoin exchange supply has only continued to slip further recently despite the price drop to the $29,200 that BTC has observed.
Bitcoin Exchange Supply Has Declined To Just 1.17 Million BTC Now
According to data from the on-chain analytics firm Santiment, the latest decline in the price doesn’t look to have triggered a severe reaction from the market yet.
The relevant indicator here is the “supply on exchanges,” which measures the total amount of Bitcoin supply that’s currently being stored in the wallets of all centralized exchanges.
When the value of this metric goes up, it means that the investors are making a net amount of deposits to these platforms right now. As one of the main reasons why the holders would transfer their coins to exchanges is for selling-related purposes, this kind of trend can have bearish consequences for the price.
On the other hand, the indicator’s value decreasing suggests the investors are taking coins off to self-custodial wallets, potentially to hold onto them for extended periods. Naturally, such accumulation can have a bullish effect on the asset in the long term.
Now, here is a chart that shows the trend in the Bitcoin supply on exchanges over the past few months:
The value of the metric seems to have been going down in recent weeks | Source: Santiment on Twitter
As displayed in the above graph, the Bitcoin supply on exchanges has observed a constant downtrend during the last few months or so. This means that the investors have been consistently taking their coins off these platforms during this period despite price declines.
Interestingly, this decline in the indicator continued even when the rally above $30,000 had occurred in the middle of June. Generally, during such sharp price surges, it’s not rare to see the metric rise, as some investors would be looking to harvest their profits.
But not only had deposits not occurred in this rally, but the supply on exchanges had also instead plunged especially hard back then, suggesting that there may have been some heavy buying taking place in the market, which would have acted as fuel for the surge.
In the past week, Bitcoin has registered a decline towards the low $29,000 level, but the indicator has still only continued to head down, implying that this price drop hasn’t been enough to trigger a mass panic-selling reaction from investors.
The current trend in this metric is naturally a positive sign for the cryptocurrency’s value, as it means that at least another selloff may not be probable to take place in the immediate future.
With the latest downward move in the supply on exchanges, only 1.17 million BTC is left in the wallets of these platforms now. This value is around 12% lower than back during the beginning of May, which is a significant drop.
BTC Price
At the time of writing, Bitcoin is trading around $29,200, down 2% in the last week.
BTC has plunged during the last few days | Source: BTCUSD on TradingView
Featured image from Kanchanara on Unsplash.com, charts from TradingView.com, Santiment.net
Americans love frozen food.
Virtually all American households purchase frozen food at least once a year, but without resilient cold storage supply chain infrastructure, the growth and safety of the massive $265 billion global frozen food market may be put at risk.
“Consumers are buying more frozen products. It’s going to require more storage capability and a more efficient supply chain,” Brian Choi, CEO and managing partner of The Food Institute, told CNBC.
In 2022, frozen food sales in the U.S. reached more than $72 billion, according to the American Frozen Food Institute.
“We’re seeing that growth continue,” Alison Bodor, CEO of the American Frozen Food Institute, told CNBC.
During the coronavirus lockdowns in 2020, frozen food sales reached more than $65 billion, according to the institute.
“The pandemic taught consumers to invest in bulk buying,” Sonia Punwani, chief marketing officer of Cargill Protein North America, told CNBC. “Frozen foods were some of the bestselling items during the pandemic since they can be really stored for long periods of time.”
There’s a sophisticated supply chain keeping perishables frozen. Products have to maintain proper temperature throughout a complex network of refrigerated trucks and cold storage facilities.
Approximately 13% of all food produced globally is lost due to poor cold storage supply chains every year, according to a study from Columbia University’s Climate School.
“In the world of cooling refrigeration, we’re still depending upon a more than century-old mechanical incumbent,” Tony Atti, CEO of Phononic, a solid-state cooling company, told CNBC.
Phononic aims to minimize food waste. One of its products is a temp-sensitive refrigerator tote that allows shippers to spend less getting food to e-grocers and grocery stores. Phononic is one of CNBC’s 2023 Disruptor 50 companies, marking its fourth time on the annual list.
Also on CNBC’s 2023 Disruptor 50 list is Lineage Logistics, a company on a mission to make the food supply chain more efficient.
“We’re helping to move food through the entire cold chain and ensuring that it keeps a safe temperature the entire way,” said Jeff Rivera, COO of Lineage Logistics.
The Michigan-based company has grown to more than 430 locations across 20 countries, offering a global network of temperature-controlled cold storage facilities for food products and several facilities “blast freeze” millions of pounds of product a day with warehouse racks specifically designed for efficiency.
Watch the video above to learn more about the influence of frozen food, the global cold storage supply chain infrastructure, what it takes to freeze food products and what’s next for this growing section of the grocery store.
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