DigitalX Weekly Crypto Update: Market Trends and Analysis

Market Commentary

Bitcoin’s price dropped below US $67,000 as the week came to a close however it did briefly breach US $70,000 following the release of the U.S. Consumer Price Index which shows signs of inflation cooling. Despite the figure coming in lower than expectations, Fed chair Jerome Powell’s tone at the FOMC conference was more hawkish then market participants expected. At the time of writing, the CME Fed Watch Tool estimates a 89% chance of interest rates remaining unchanged following the July FOMC meeting. The first expected rate cut in September is currently estimated at a 63% probability with a December rate cut estimated at 48% probability. The Federal Reserve’s continued higher for longer approach has even prompted prominent US Senators to urge the Federal Reserve to cut the federal funds rate from its current, two-decade-high of 5.5 percent. 

Issuers of Ethereum ETFs are working on their S-1 filings with the SEC Chair Gensler saying he expects the ETFs to trade “over the course of summer” or between now and November. Staking has been excluded from all of thee products due to regulatory uncertainties and the U.S. Securities and Exchange Commission’s stance on staking activities within such funds. Some analysts believe that the removal of staking would make these products less attractive; nonetheless it would open large pools of capital which were previously unable to access Ethereum as an asset. 

Finally, Donald Trump is throwing some weight behind Bitcoin miners quoting “the rest of the cryptocurrency should be mined in the United States” and “We want all the remaining Bitcoin to be MADE IN THE USA!!!”; this led to a rally in Bitcoin mining stocks led by TeraWulf which was up ~20% at one point.

CEO Comment

The Gap between Bitcoin and the S&P 500 has widened to 9%, from 5% last week, online with Bitcoin sell-off as we track the beta of broader markets. 

As for the shift list, which we define as the major events and announcements facilitating the broader market’s transition to Web3 financial rails or the internet of value, the top shifts for this week include:

1. The 56% stat of Fortune 509 companies looking at on-chain projects is mind blowing and is a key “watch this space” number. 
2. Corporates adopting Bitcoin treasuries is key to the shifting to Web3 financial rails – here.

Our Top “alts shifts” for this week, featuring shifts in our altcoin universe that drive our thematic approach, saw the second gap, or the broader digital asset market, drop ever so slightly to circa 42%. I want to reiterate that this is a big opportunity, as mentioned we see this as a selective opportunity to identify and grow our alternatives portfolio via our “alThematics” work. The gaps themselves are proving to be a risk on, risk off proxy and hugely high Beta – volatility is a certainty and an opportunity – the building is happening no matter what.

1. We welcome new investable opportunities and you may see more ZK in our portfolio with airdrops like this.

What are our favourite thematics for 2024? We continue to like any infrastructure plays of the shift from Web2 to Web3 financial rails and any plays in the real-world asset tokenisation infrastructure, data validation and decentralised storage, as well as scale-up technologies such as ZKrollups. We are closely following all the ”de’s” – DeFi, DePin, DeSoc – (want to know what that means? – message us).

Lisa Wade, CEO DigitalX

CRYPTO TOP 20 7 DAY PRICE CHANGE

*All figures throughout are in USD unless otherwise specified

Market Updates

• Lykke crypto exchange acknowledges hack after halting withdrawals
• UwU Lend hit by $20M crypto hack
• Justin Sun looks set to sell $21 million worth of crypto
• Crypto Custody Firm Fireblocks Partners With Coinbase International Exchange for More ‘Reliable’ Trading
• Crypto Investment Products Saw Nearly $2B in Inflows Last Week: CoinShares
• Bitfarms to adopt ‘poison pill’ amid Riot takeover attempt
• Travel booking site Travala gets Telegram Open Network integration
• MicroStrategy Proposes $500M Convertible Notes to Boost Bitcoin Stash
• NEAR Foundation Forms Nuffle Labs With $13M in Funding
• Crypto Exchange Crypto.com Secures Spot on Ireland’s Virtual Assets Service Provider Register
• Paradigm raises $850M for third crypto fund
• Ripple launches new fund to drive blockchain innovation in Japan and South Korea
• DeFi Technologies launches Core chain validator, stakes 1,498 Bitcoin
• ZKsync to airdrop 3.6 billion ZK tokens next week
• Polygon launches $720M Community Treasury for blockchain grants
• US spot bitcoin ETFs see $65 million in net outflows, ending 19-day inflow streak
• US settles for $4.47bn with now bankrupt crypto firm Terraform Labs
• TON is paving a path to the future for crypto
• MetaMask enables pooled staking for Ethereum holders
• Telegram tap-to-earn crypto game Pixelverse raises $5.5 million from Delphi, Merit Circle, and others
• Bitcoin (BTC) Selling By Miners Rises to Two-Month High
• The State of Crypto: The Fortune 500 Moving Onchain
• Bitcoin ETFs See $200M Net Outflows in Fed, CPI Jitters

The Shift List

• The State of Crypto: The Fortune 500 Moving On-Chain.
• DeFi Technologies adopts Bitcoin treasury strategy
• Brazil’s Itau Bank Expands Bitcoin and Ethereum Trading Services
• MoonPay and PayPal crypto purchasing integration expands to include UK and EU customers
• Shopify Now Supports Hundreds of Crypto Tokens Through Solana Pay via Helio
• Bitcoin Suisse Issues Tokenized Bond on Polygon

Macro and Regulatory Environment

• EU Vote See Reelection of Some Officials With Key Roles in Bloc’s Crypto Journey
• South Korea labels mass-produced NFTs as virtual assets
• Hong Kong’s top finance official touts flexible crypto ETF features amid web3 push
• Biden campaign in talks to accept crypto donations through Coinbase Commerce: sources
• Snap U.K. election sends crypto industry scrambling to court Labour allies
• Gensler says Ethereum ETF S-1 approvals likely ‘over the course of this summer’
• Taiwan forms crypto industry association as major step toward self-regulation
• Norwegian government freezes and returns $5.7 million connected to Ronin hack
• Australia cracks down on online gambling with crypto, credit card ban
• The EU is targeting crypto privacy, Monero facing a significant challenge
• Consumer Price Index rises 3.3% in May vs. 3.4% expected
• US Fed leaves interest rates unchanged at 5.25%-5.5%; sees 1 cut this year
• Trump’s Appeal to Bitcoin Miners Is a Wakeup Call for Crypto to Stay Apolitical

About DigitalX

DigitalX Ltd (ASX:DCC) is a leading ASX-Listed Bitcoin and digital asset funds management business. The Company has a 9 year track record mining Bitcoin, blockchain and smart contract development. DigitalX Asset Management is the investment manager of digital asset investment products that provide qualified investors with highly secure and streamlined access to digital asset exposure. To learn more contact the team at [email protected] or visit our website https://digitalx.fund/.

Disclaimer:

DigitalX Asset Management Pty Ltd is a corporate authorised representative (CAR) of Boutique Capital Pty Ltd (AFSL 508011), and True Oak Investments Ltd (AFSL 238184). To the extent to which this document contains advice it is general advice only and has been prepared by the CAR for individuals identified as wholesale investors for the purposes of providing a financial product or financial service. The information herein is presented in summary form and is therefore subject to qualification and further explanation. The information in this document is not intended to be relied upon as advice to investors or potential investors and has been prepared without taking into account personal investment objectives, financial circumstances or particular needs. Recipients of this document are advised to consult their own professional advisers about legal, tax, financial or other matters relevant to the suitability of this information. Past performance is not indicative of future performance.