Newsletter 84
26th July 2024
THE MARKET THIS WEEK
As China Rate Cuts Signal Panic, Bitcoin, Stocks Plunge, Treasury Yield Curve Steepens
China’s consecutive interest rate decreases indicate the need to boost development after the country’s faltering economy received little assistance from the most recent Communist party plenum. Thursday saw a decline in risk assets as worries about instability in the second-largest economy in the world were raised by China’s second interest rate drop in as many days.
It is certain that securities advisors are fielding more questions from clients regarding individual crypto assets and the projects that support them as the crypto and blockchain industries continue to gain steam. To make well-informed investment decisions, evaluating these projects necessitates a full awareness of several important criteria. With the introduction of Ethereum exchange-traded funds, the second-largest cryptocurrency by market capitalization became accessible to investors through a conventional offering, making this another momentous week in the United States.
SEC approves Ethereum ETFs, Bringing Popular Funds to Second-Largest Cryptocurrency Issuers’ most recent S-1 forms were approved, allowing the funds to start trading as early as Tuesday. The decision comes after the Securities and Exchange Commission approved bitcoin (BTC) exchange-traded funds (ETFs) in January, capping a years-long process for ether ETF clearance. Since ether can be bought and sold using typical brokerage accounts, putting the funds in an ETF wrapper may help them appeal to more traditional investors. Bitcoin ETFs have drawn tens of billions of dollars in investment since their launch in January.
Don’t miss the potential bull run that could restore Bitcoin’s glory. On cryptocurrencies, Donald Trump has come to his senses. Whether you like him or not, that’s good for the business. It would be enormous for our sector even if Trump simply puts a brakes on the prosecution rather than changing any crypto policies at all. It would put an end to the campaign, allow banks to choose who they wish to collaborate with, and pave the way for widespread adoption. In general, America has been hostile to cryptocurrency. But now, the final (futile) point of resistance could give way. Crypto providers need to be ready for this possible change in the political environment.
Potential foreign crypto miners snooping on US bases Senator Warren, who is well-known for taking a strong anti-crypto stance, has once again stated her concerns about foreign-owned crypto miners operating in the nation, calling them noisy, hot, and capable of “sucking up a ton of electricity, which can crash the power grid.” This time, she alerted a Senate committee to the possible risks associated with foreign-owned bitcoin mining businesses located within US borders.
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 : 3 gwei
DeFi TVL : $156.94b
Fear and Greed Index : 68 (Extreme Greed)
Federal Reserve Balance Sheet : $7.20 T
BATTLE OF THE BULL AND BEAR
The largest cryptocurrency by market value, Bitcoin (BTC), has plummeted about 2% to about $64,000 since midnight UTC, while ether (ETH) has dropped more than 5%, pulling down the whole altcoin market. A gauge of the larger cryptocurrency market, the CoinDesk 20 Index (CD20), dropped 4.6% in a single day.
Day One Inflows of $107M into Ether ETFs as $1B in Trading Volume is Reached
The daily net inflow reached $106.78 million, and on the first day of trading, the majority of ETFs saw gains. On the first day of trading, ether ETF volumes exceeded $1 billion with a net flow of $106.78 million. By contrast, on their first day of trading, the bitcoin ETFs saw $600 million in net flow and $4.5 billion in trading activity. On the first day of their availability, investors traded shares worth over $1 billion of the recently created ether (ETH) exchange-traded fund (ETF) companies, according to Bloomberg statistics.
Bitcoin rises to $67K in anticipation of Trump’s Nashville speech
With futures traders leaning toward long positions ahead of Donald Trump’s address at the Bitcoin 2024 conference in Nashville, Tennessee, the price of bitcoin has increased by 4.3%. Most of the week’s losses for Bitcoin have been regained as traders watch what happens when former US President
VanEck Projects Bitcoin to Reach $2.9 Million by 2050, but a Lot of Things Need to Happen Initially According to Matthew Sigel of VanEck, in an interview, “massive economic imbalances, rising distrust in institutions, fiscal recklessness, and mounting debt burden” are all helping bitcoin. In order to get past scaling problems and enable the use of Bitcoin as a means of exchange, layer-2 networks for the cryptocurrency will be essential.
Bitcoin Miner Marathon Purchases $100M in Bitcoin and Will Rely on the “Full HODL” Approach The miner wants to purchase additional bitcoin on the open market and currently has over 20,000. One of the biggest bitcoin (BTC) miners said that it will revert to its original plan of keeping all bitcoin mined on its balance sheet after purchasing $100 million worth of BTC on the open market. The miner declared in a statement on Thursday that it currently has over 20,000 bitcoin on its balance sheet, which, at current rates, is worth over $1.3 billion. It also plans to purchase more on the open market.
WEEKLY REVIEW OF IC15
The global cryptocurrency market nose-dived due to heavy liquidations in the US stock market, outflows from spot Ethereum ETFs, and Mt.Gox creditors’ selling pressure. The IC15 Index dropped 3,979 points to 80,362 at 4 p.m., led by Avalanche, with 10.15% down, followed by Ethereum, Dogecoin, Chainlink, and Litecoin in the 6–9% range, whereas Tron is the only gainer with 1.57% up.
Economic Affairs Secretary Ajay Seth reveals that India plans to release a discussion paper outlining its crypto policy stance by September. Meanwhile, the Russian parliament approved a bill allowing the use of crypto for international trade and legalizing crypto mining.
Wyoming Senator Cynthia Lummis plans to introduce a new crypto bill that requires the Federal Reserve to buy and hold Bitcoin as a strategic reserve asset for the US government, along with gold and foreign currencies. The Nigerian government announced a new initiative to train 1,000 youths annually on emerging technologies such as artificial intelligence (AI) and blockchain to compete globally with world economies.
WEEKLY SPOTLIGHT
Due to significant liquidations in the US stock market, withdrawals from spot Ethereum ETFs, and pressure from Mt. Gox creditors to sell, the entire cryptocurrency market crashed. At 4 p.m., the IC15 Index fell 3,979 points to 80,362. Avalanche led the decline with 10.15%, while Ethereum, Dogecoin, Chainlink, and Litecoin trailed in the 6–9% range. Tron was the only cryptocurrency to rise, rising 1.57%.
According to Economic Affairs Secretary Ajay Seth, India intends to publish a discussion paper by September that will outline its position on cryptocurrency policy. In the meantime, a measure legalizing cryptocurrency mining and permitting its usage in foreign trade was approved by the Russian parliament.
Senator Cynthia Lummis of Wyoming intends to introduce a new cryptocurrency bill that would mandate the Federal Reserve purchase and maintain Bitcoin in addition to gold and foreign currencies as a strategic reserve asset for the US government. In an effort to compete with other global economies, the Nigerian government has launched a new program to teach 1,000 young people a year in cutting-edge technology like blockchain and artificial intelligence (AI).
