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Weekly Update: 19th of June

Hodl Team
Hodl Team
19 June 2024
Welcome to our weekly update, where we provide insights into the latest developments in the digital assets market.

What happened between the 12th and 19th of June?

  • The latest US Consumer Price Index (CPI) figures came in lower than expected providing some relief on financial markets, however, according to the Federal Reserve’s latest dot plot we will see only two cuts in 2024 if economic data doesn’t disappoint. Read more

  • Cryptocurrency exchange Gemini agrees to pay $50 million in settlement with the New York Attorney General's office tied to the Gemini Earn program. Read more

  • Digital assets have become a political tool as Joe Biden's re-election campaign is in discussions to accept cryptocurrency donations. At the same time, Trump says he will advocate for Bitcoin miners in the White House. Read more

  • Terraform Labs has agreed to $4.47 billion to resolve its civil lawsuit with the Security and Exchange Commission, the settlement was reached after a jury found Terraform Labs and its co-founder liable for the Terra ecosystem collapse. Read more

Aggressive rate cuts are not on the horizon

On the 12th of June, the US Core CPI, the price change of goods and services excluding food and energy, the month over month and year over year figures came in lower than expected at 0.2%, 0.0%, and 3.3%, respectively. This relieved some pressure on financial markets, indicating that inflation might still be cooling after previous reports of hotter inflation numbers. However, this relief was short-lived. The latest dot plot from the Federal Reserve suggested that two rate cuts might be possible, but only if economic data continues to meet expectations. This uncertainty led investors to adopt a more risk-off approach. Consequently, Bitcoin first surged to ~$71,000 before retracing to ~$65,600.

Gemini settles with the New York Attorney General's office

On the 14th of June, cryptocurrency exchange Gemini agreed to pay $50 million in settlement with the New York Attorney General's (NYAG) office regarding its Gemini Earn Program. Its Earn Program allowed investors to loan their cryptocurrency and earn up to 7.4% APY. However, these assets were loaned to Genesis Global Capital which eventually collapsed. The agreement gives "all defrauded investors full recovery of the assets they invested in the Earn program but were unable to withdraw when the investment program collapsed," according to the NYAG. Gemini is also prohibited by the agreement from running any cryptocurrency lending initiatives in the jurisdiction.

Biden and Trump leverage digital assets in political campaign

As the US presidential elections loom, President Joe Biden and ex-President Donald Trump continue to explore the digital assets space and seek to pivot the crypto-community to their advantage. Biden has reportedly begun discussions with cryptocurrency industry insiders for a potential shift to accepting crypto donations for his campaign. However, it might be a little too late for Biden, as he and his party have previously shown a negative attitude towards the industry. Trump appears to be winning on this front; he has already started to accept cryptocurrency donations, has stated that he will advocate for miners in the White House, and has promised to end Joe Biden’s "war on crypto."

It is interesting to see that the industry is becoming intertwined with US elections, illustrating that it is becoming a crucial topic. However, we need to wait and see what happens after the elections.

Terraform Labs agrees to settle for $4,47 billion

Terraform Labs has agreed to settle with the Securities and Exchange Commission for $4,47 billion in its civil case tied to the collapse of its ecosystem and native cryptocurrency. In 2022, the industry experienced the collapse of Terra and its stablecoin, erasing $40 billion in investor assets and starting a tedious legal battle. Last month, a jury found Terraform Labs and its co-founder, Do Kwon, liable for the collapse, leading to the eventual settlement. Do Kwon remains in Montenegro as the country is still determining whether he should be extradited to the U.S. or South Korea, as he faces charges in both jurisdictions.

In other digital assets news

  • Layer 1 blockchain TON’s total value locked (TVL) surged to a record high of more than $610 million, doubling from $300 million in just three weeks.

  • MicroStrategy proposes a $700 million convertible note offering to acquire more Bitcoin, Microstrategy already holds over 214,400 Bitcoin, worth approximately $14 billion.

 

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