Newsletter — 78
14th June 2024
THE MARKET THIS WEEK
Power Grids Restricted by AI Data Centers Are Stabilized by Bitcoin Mining According to Ryan Condron, co-founder of Lumerin, bitcoin miners aid in balancing energy networks and increasing the use of renewable energy. Actually, mining bitcoins is a fantastic way to contribute to the stability and efficiency of power systems. This is because a Bitcoin miner may modify energy use almost instantly. Because of its adaptability, Bitcoin mining can swiftly adjust to changes in the supply and demand of electricity, which makes it a useful tool for stabilizing power networks. This is especially true when it comes to managing the amount of electricity used by huge AI data centers.
Defending Fundamental Analysis in the Face of Memecoin Frenzy According to Jupiter Zheng, a partner at HashKey Capital, trading memecoins without doing a thorough study and being fully aware of the risks involved is essentially gambling rather than investing. Memecoin trade volumes reached heights not seen since the collapse of the previous cryptocurrency bubble in 2022. Because of the constant social media noise and the belief that the next big token is right under your nose, speculative enthusiasm in the cryptocurrency space is on the rise. Joshua Oliver, a Financial Times correspondent, wrote a new book titled Hype Machine, which is primarily on Sam Bankman-Fried and the FTX cautionary story.
US Bitcoin miners silent in face of Kerrisdale ‘snake oil’ claims U.S. Bitcoin miners have remained tight-lipped following a recently released Kerrisdale Capital report criticizing the industry. Bitcoin mining in the U.S. is incredibly bullish, especially with another Trump presidency. Not only are the political winds shifting in favor of energy production, but Bitcoin miners might enjoy special protections if they can continue to work with the Trump administration
The Net Inflows Into Crypto Markets Have Amounted to $12B. To date, the cryptocurrency markets have witnessed net inflows of $12 billion. The bank stated that current digital wallets on exchanges are probably where the majority of the $16 billion influx into spot bitcoin ETFs came from. Though it is more than previous year, this $12 billion net inflow is far less than what it was during the 2021–2022 bull run.
Blockchains Are Changing The Finance of Public Goods Arguably, the largest unlock in crypto is rewriting the rules around how capital moves through society. We beg to see quick experimentation with new finance models that expand impact ecosystems as blockchains fight for market share.
KEY METRICS
Total Crypto Market Cap : $2.65T
Bitcoin Market Cap : $ 1.32T
Ethereum Market Cap : $ 421.48B
ETH/BTC Ratio : 0.05
Ethereum Gas Price : 8 gwei
DeFi TVL : $194.67b
Fear and Greed Index : 74 (Extreme Greed)
Federal Reserve Balance Sheet : $7.25 T
BATTLE OF THE BULL AND BEAR
Bitcoin recovers $69K, and derivatives point to more gains. On June 11, the premium for Bitcoin two-month futures briefly approached the neutral 10% threshold before surging to 13%. This rebound suggests that traders are cautiously hopeful, which makes sense given that the basis rate can rise above 40% in situations of excessive bullishness.
During a market slump, bitcoin whales amassed $1.4 billion in only one day. The abrupt and massive increase in Bitcoin whale holdings coincided with the lowest level of Bitcoin supply on exchanges since December 2021.
After discovering an allegedly bogus cryptocurrency trading website through an unsolicited LinkedIn connection request, one investor alleges to have lost $310,000 to it. According to the DFI, the investor discovered Ethfinance by way of an accidental LinkedIn friend request. In an effort to benefit from cryptocurrency trading, the investor moved a total of $310,000 from his “DeFi wallet” to the site, it was reported. The investor did not submit any more money.
Bitcoin stays at $68K as the “chicken” cryptocurrency market ignores US PPI At the June 13 Wall Street open, markets played “chicken” with the most recent US inflation statistics, sparing Bitcoin from a new assault on $69,000. The quick change occurred after the Producer Price Index (PPI) for May in the United States showed signs of slowing inflation, with all figures coming in below forecast.
$226M Is Withdrawn From Bitcoin ETFs BlackRock’s IBIT was the only ETF to report a net inflow on Thursday, with the majority of the funds seeing withdrawals, led by Fidelity’s FBTC. The unexpectedly low U.S. inflation data caused bitcoin prices to spike above $70,000 from $68,000, but they quickly dropped back to $67,000 as traders probably cashed out.
Bitcoin Reduction to $66K Sets Off $250M in Crypto Liquidations as Traders Prepare for FOMC and CPI Report’s “Wild Wednesday” After beginning the day trading close to $70,000, Bitcoin (BTC) fell to $66,170, its lowest point in three weeks, during the U.S. session. Although it had somewhat recovered to about $66,500, it had nevertheless dropped by almost 5% in the previous day.
During the same period, altcoins experienced even more severe declines, with the CoinDesk 20 Index, a barometer for the whole crypto market, falling more than 6% and all twenty of its components seeing losses. While the ethereum price of Ethereum fell 6.5% to below $3,500, the prices of Solana, Dogecoin, Cardano, and Chainlink all saw declines of 6% to 9%.
WEEKLY REVIEW OF IC15
The global cryptocurrency market witnessed volatility amid the Federal Reserve’s hawkish remarks in the FOMC announcement. The IC15 Index was down 744 points to 84,853 at 4 p.m. Major losers in the Index were BNB, Shiba Inu, Ethereum, and Solana in the 1–2% range, while Toncoin gained the most, with 6.44% up, followed by Dogecoin, Litecoin, and XRP in the 0–3% range
The government of Zimbabwe launched plans to establish a comprehensive regulatory framework for its crypto industry and urged input and feedback from crypto service providers. Similarly, Taiwan’s crypto industry officially formed an association under the government’s guidance to formulate self-supervisory rules and enhance the country’s oversight of crypto trading platforms.
According to Bitwise’s report, the crypto and AI sectors will attract more demand than the public predicts, as both sectors could add a combined value of $20 trillion to the global GDP by 2030. Fortune 100 companies witnessed a record 39% rise in blockchain, Web3, and crypto projects year-over-year in the first quarter of 2024.
Saudi Arabia joins the Hong Kong Monetary Authority’s Project mBridge to become the fifth central bank member to reduce dependency on US dollars in oil trade. Turkey plans to introduce a very limited transaction tax on cryptos and stocks instead of taxing profits earned from these assets to bring justice and effectiveness to the tax policies
WEEKLY SPOTLIGHT
The hawkish comments made by the Federal Reserve during the FOMC meeting caused volatility in the global bitcoin market. At 4 p.m., the IC15 Index had dropped 744 points to 84,853. In the Index, the top gainers were Toncoin with 6.44% gain, followed by Dogecoin, Litecoin, and XRP in the 0–3% area, and the top losers were BNB, Shiba Inu, Ethereum, and Solana in the 1–2% range.
The Zimbabwean government requested suggestions and comments from cryptocurrency service providers as it began drafting plans to create a thorough regulatory framework for the country’s cryptocurrency sector. In a similar vein, Taiwan’s cryptocurrency sector formally established an association with government support in order to develop self-policing guidelines and strengthen national regulation of cryptocurrency exchanges.
The crypto and AI industries will see higher demand than the general public anticipates, according to Bitwise’s analysis, since they have the potential to boost the world economy by a combined $20 trillion by 2030. In the first quarter of 2024, blockchain, Web3, and cryptocurrency projects saw a record 39% year-over-year increase in Fortune 100 organizations.
Saudi Arabia is the fifth central bank to join the Hong Kong Monetary Authority’s Project mBridge, a move aimed at reducing reliance on US dollars in the oil trade. Instead of taxing the earnings derived from these assets, Turkey intends to impose a very low transaction tax in order to improve the fairness and efficiency of the tax laws.
