Why are there so many favourable information but BTC and ETH are still falling? This is a very good question and a confusion in the hearts of many investors. In simple terms, "fully priced-in good news is unfavourable information"; the current market is in a stage where the "news front" and "capital front" are out of sync.

We can delve into this issue from the following perspectives:

Surface reason: What is the specific "Favourable Information"?

First, we need to clarify what the recent so-called "Favourable Information" is:

1. Bitcoin Spot ETF Approved (USA): This is undoubtedly the biggest favourable information. It allows traditional financial funds to directly purchase Bitcoin through familiar stock accounts, significantly lowering the entry barrier.
2. The fourth "halving": In April this year, Bitcoin completed its fourth halving, reducing the new output per block from 6.25 to 3.125. Historically, halvings have led to price increases due to the slowing supply growth.
3. Federal Reserve Rate Cut Expectations: The market generally expects the Federal Reserve to start a rate cut cycle this year. Rate cuts mean increased liquidity, which is favourable information for all risk assets, including Bitcoin.

These favourable information really exists, but why is the price falling instead of rising?

Core reason: The market is digesting Favourable Information and facing reality.

1. The ETF's "buy the expectation, sell the news" effect
This is the most crucial point. The hype around the Bitcoin spot ETF started when BlackRock submitted its application in June 2023. Before it was officially approved (in January 2024), the market had spent more than half a year digesting this expectation, and the price rose from around $25,000 to $49,000. When this "century Favourable Information" finally materialized, the huge profit-taking and the mindset of "fully priced-in good news" led to sell-offs.

2. The volatility of ETF fund inflows
Although the overall net inflow of ETFs is positive, the process has not been smooth.

· Continuous Outflow of Grayscale GBTC: After the ETF conversion, Grayscale GBTC holders experienced large-scale profit-taking and redemptions due to high fees, resulting in immense selling pressure. This selling pressure once exceeded the buying volume of other new ETFs.
· Slowing capital inflow: After the initial frenzy, the inflow of funds into the new ETF has slowed, with some days even showing net outflows. This indicates that the influx of incremental funds is not continuous and cannot fully offset the selling pressure in the market.

3. The Historical Law of the "Halving" Effect and Preemptive Speculation
The impact of Bitcoin halving is usually not immediate. Historical data shows that the main price surge often occurs about a year after the halving. This is because the effects of the reduced supply take time to manifest. Similarly, like with ETFs, the market may also speculate in advance on the expectations of the "halving," and when the event actually occurs, there may be a pullback as the "fully priced-in good news" comes to fruition.

4. The "high-pressure" environment of the macro economy
This is the "Sword of Damocles" currently suppressing all risk assets.

· Stubborn Inflation and a Hawkish Federal Reserve: U.S. inflation data continues to exceed expectations, forcing the Federal Reserve to delay its interest rate cut timetable and emit "higher for longer" hawkish signals.
· High interest rate environment: The United States is currently at its highest interest rate level in over 20 years. High interest rates result in:
· Higher cost of capital: Investors are more willing to hold risk-free government bonds (yielding over 5%) rather than the highly volatile Bitcoin.
· Decrease in risk appetite: Institutional and individual investors will reduce their allocation to high-risk assets.
· Strong Dollar: A strong dollar usually puts pressure on Bitcoin priced in dollars.

5. Profit-taking and leverage liquidation within the market
After a significant rebound from the low point at the end of 2022, the market has accumulated a large amount of profit-taking positions. Any slight movement could trigger profit-taking. At the same time, the high leverage characteristics of the cryptocurrency market also mean that once prices start to fall, it will trigger a large number of forced liquidations, accelerating the decline.

Summary and Outlook

So, to answer your friend: it is not because the Favourable Information is ineffective, but because this Favourable Information has already been fully priced-in by the market, and currently, it is facing a stronger opponent - the globally tightening monetary environment.

This can be seen as a tug-of-war competition:

· Bullish side: ETFs bring long-term capital, and halving leads to a reduction in supply.
· Short position (Unfavourable Information): High interest rate environment, strong dollar, profit-taking.

Currently, the bearish camp has gained strength due to the Federal Reserve's "hawkish" stance, temporarily taking the upper hand.

How to view the future?

· Short-term: Prices will still be dominated by macroeconomic data (CPI, non-farm employment) and Federal Reserve statements, with significant volatility. If inflation rises again, the Federal Reserve may further delay interest rate cuts, which will continue to pressure Bitcoin.
· Medium to long term: The core favourable information logic has not changed. ETFs have opened the door for traditional funds, which is a permanent structural change. The supply effect of the halving will gradually ferment over time. Once the Federal Reserve truly begins its interest rate cut cycle and releases liquidity, Bitcoin is likely to welcome a new round of increase.