Weekly Update: 26th of June

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

What happened between the 19th and 26th of June?

  • During the week, Bitcoin experienced a downward trend as the spot ETFs bled millions of outflow while the market started to lose ground against the stock market. Read more

  • Ethereum developer Consensys disclosed that the Securities and Exchange Commission (SEC) has closed its investigation into whether Ether is a security, resulting in a massive win for the industry. Read more

  • The effects of the Bitcoin Halving become evident as Bitcoin miner reserves drop to 1,9 million bitcoin, its lowest point in 14 years. Read more

  • Collapsed cryptocurrency exchange Mt.Gx will begin repayments in the first week of July 2024, returning over 140,000 Bitcoin to the victims of the 2014 hack. Read more

Bitcoin turns red

Bitcoin experienced a downward trend last week, retracing from $65,500 to $61,000. This decline is due to significant outflows from Bitcoin ETFs, approximately $440 million, reflecting a more risk-averse investor approach. Bitcoin whales, or large holders, have also slowed their transaction activity and reduced their presence on derivatives exchanges, suggesting further downward movement. In contrast, the S&P 500 and NASDAQ reached new highs as flat CPI figures, an easing job market, and potential Fed rate cuts bolstered risk assets. However, Bitcoin remains stuck in the mid-$60,000 range. Although we believe Bitcoin will eventually follow NASDAQ's trend due to its similar risk and technology-driven nature, the current demand for Bitcoin is weak.

The SEC drops investigation into Ethereum

On June 19th, Ethereum developer Consensys announced that the SEC had stopped its investigation into whether Ether was a security. The investigation focused on Ethereum’s 2014 initial coin offering and whether it constituted an unregistered securities offering. According to Consensys, the agency sent a letter on June 7th stating that it would end its investigation, citing the approval of an Ether ETF based on ETH being classified as a commodity. Various market participants have speculated on why the SEC dropped the case, with some suggesting the case was too weak for the court. Nevertheless, this is a significant win for the industry and reinforces the view that digital assets are not securities.

Bitcoin miner's reserves drop to a 14-year low

Since the fourth Bitcoin halving, it has become more expensive for Bitcoin miners to operate. The block rewards decreased from about 900 Bitcoin per day to 450, while the Bitcoin price has remained relatively stable, leading to a drop in revenue. Over the past two months, miners have been selling their Bitcoin reserves to fund their operations. As a result, on June 19th, miner reserves fell to 1.9 million Bitcoin, the lowest amount since February 2010. However, the monetary value of these reserves is around $135 billion, which is near an all-time high. Although reserves are dropping, miners have the capital to weather the storm

Mt. Gox will start repayments in July

In 2014, cryptocurrency exchange Mt. Gox experienced a hack that resulted in the loss of approximately 720,000 Bitcoin, eventually leading to its collapse. In the following years, the exchange retrieved 140,000 Bitcoin, starting a tedious legal process. After years of moving deadlines, the victims will finally see repayments. On June 24th, the Mt. Gox website announced that it would begin repaying victims in the first week of July. The victims will be compensated in Bitcoin and Bitcoin Cash. While this may increase selling pressure since Bitcoin's value has significantly risen since 2014, it will finally close the chapter on the biggest hack in the industry's history and put related speculations to rest.

In other digital assets news

  • Tether’s stablecoin USDT on the Tron blockchain briefly surpassed the average daily trading volume of payments giant Visa over 24 hours last week, experiencing a total trading volume of $53 billion compared to Visa’s $9 billion.

  • Global consulting firm McKinsey forecasts $2 trillion in tokenized real-world assets by 2030 in its base case. However, broad adoption is still far off, and the number could be as low as $1 trillion.


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