Choppy Market Ahead 🪵🪓
Choppy Market Ahead 🪵🪓
Mixed macro economics signals don't sit well with crypto. Arthur Hayes doubts Trump's crypto sincerity. German Bitcoin sell-off over? Binance has $115B in user crypto. SEC closes Stacks investigation.
Hello, y'all. It’s turbulence and choppy sea, and our friends are all aboard 🎵
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The 2024 Q3 report from Coinbase predicts a turbulent summer for the cryptocurrency market.
Why? Investors are navigating a mix of positive and negative signals.
Conflicting macroeconomic factors: On one hand, inflation appears to be cooling in many parts of the world, which could lead to less aggressive interest rate hikes by central banks.
On the other hand, concerns about a potential recession loom large, with some economists warning that the Federal Reserve's efforts to tame inflation could trigger an economic downturn.
Perfect set up for market's volatility.
Regulatory Uncertainty: Ongoing regulatory uncertainty surrounding cryptocurrencies.
Some jurisdictions, like the European Union, have made progress in developing comprehensive crypto frameworks, other regions, such as the United States, continue to grapple with how to best approach the regulation of digital assets.
Institutional adoption slows: Institutional adoption of cryptocurrencies has slowed in recent months, as some large investors adopt a more cautious stance amid the market's turbulence.
Spot Bitcoin ETFs get a green week.
Record highest flow day in over 5 weeks.
The BlackRock and Fidelity Bitcoin ETFs led the $310 million in inflows, while Grayscale recorded a rare inflow day at $23 million.
Cboe launches leveraged Bitcoin ETF options
Cboe Global Markets has launched options on leveraged Bitcoin ETFs, allowing investors to gain 2x exposure to the leading cryptocurrency.
The options are based on the recently launched T-Rex 2x Long Bitcoin Daily Target ETF and T-Rex 2x Inverse Bitcoin Daily Target ETF, which track the spot price of Bitcoin via derivative swaps.
These leveraged ETFs are designed for daily traders interested in getting twice the return or betting on a decline in Bitcoin.
Read: Will Degens Flock to Options on Leveraged Bitcoin ETFs?
Bitcoin champions keep at it. Always.
Block That Quote 🎙️
BitMEX co-founder and outspoken Billionaire, Arthur Hayes
“That is poppycock. Trump is an astute politician.”
Hayes ain’t buying the Trump for crypto Republican script.
He doubts Donald Trump's sincerity when it comes to crypto promises in his latest blog post.
“I am dismayed that many crypto pundits who should know better are now blindly throwing fancy fundraisers for the Trump campaign. They erroneously believe that Trump is sincere and that if they just donate enough money, Operation Chokehold Crypto will vanish. That is poppycock. Trump is an astute politician. He will say whatever to whoever is to be re-elected. Once in office, anything related to crypto will be a distant memory.”
Donald Trump and the Republicans have been pulling out all the stops to position themselves as the pro-crypto party.
Read: 'Give Me Liberty, or Give Me Death!' 🤌
Germany Completes Sell-Off of Seized Bitcoin.
Germany's central criminal investigation agency has divested all of its Bitcoin holdings, valued at around $2.8 billion, after seizing the funds from a film piracy website.
Read: Germany's Flash Sell-Off 🚨
Track the German Government (BKA) wallet on Arkham Intelligence.
Background: In January, the agency seized 50,000 Bitcoin from Movie2k.to, a website found guilty of money laundering and other illegal activities.
The German government started selling the seized Bitcoin on June 19, with Bitcoin's price dipping under $55,000 earlier this month.
Market Impact: The sale of the seized Bitcoin, combined with the distribution of Bitcoin from Mt. Gox, the Japanese crypto exchange that was hacked in 2014, contributed to an increase in supply, negatively affecting Bitcoin's price.
Global Context: Germany is not the only country that has confiscated Bitcoin. The US government holds more than $13 billion in seized Bitcoin, while the UK holds about $3.6 billion.
In The Numbers 🔢
$115 billion
Binance user funds in July 2024
Despite recent regulatory scrutiny from the US Securities and Exchange Commission (SEC) and the Department of Justice (DOJ), Binance, the world's largest cryptocurrency exchange, continues to see a significant increase in user funds.
User funds reach new high: Binance's proof of reserves reports show that the exchange had $115 billion in user funds at the start of July, up from $61 billion a year ago.
This represents a 150% growth in user funds since the DOJ investigation was first reported in December 2022.
Stablecoin holdings decline, crypto holdings rise: The composition of user funds on Binance has shifted, with only 20% currently held in stablecoins, down from more than half before the regulatory actions.
Conversely, holdings in non-dollar-pegged cryptocurrencies have increased to 80%, the highest point on record.
Users confident in Binance's future: The data suggests that Binance users remain confident in the exchange's future despite the regulatory scrutiny.
The tokens with the largest balance increases since October 2023 include Curve DAO, Arbitrum, Aptos, Hashflow, Enjin and Optimism, all growing by more than 70%.
SEC Drops Bitcoin L2 Stacks Investigation
The US Securities and Exchange Commission (SEC) has ended its three-year investigation into Hiro Systems, the developer behind the Stacks (STX) cryptocurrency.
Background: Hiro had initially treated STX tokens as securities, but later claimed the network had become fully decentralised, prompting the SEC to launch a probe in 2021 to question this interpretation.
SEC's decision: After investigation, the SEC has now decided to drop the probe, a potential shift towards a more flexible approach in evaluating the regulatory status of digital assets.
Implications: For the broader cryptocurrency and blockchain industry, this could probably bring a change in SEC stance, and recognising the legal legitimacy of decentralisation.
The Surfer 🏄
Hamster Kombat, a viral Telegram crypto game, has sparked a surge in sales of massage guns in Russia as players use the devices to rapidly tap the screen and boost their in-game earnings.
Crypto analytics from Chainalysis reports that traditional money launderers are utilising cryptocurrency networks to create "large-scale money laundering infrastructure" and clean cash originated outside of crypto.
The price of Blur, a popular NFT marketplace token, dropped 7% after a large holder known as "Machi Big Brother" transferred all of their Blur tokens to the Binance exchange.
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