Tuesday, 20 June 2023

Market Summary

Market Summary 20 June 2023

Bitcoin Price: US$ 26,844.35 (+1.91%)
Ethereum Price: US$ 1,737.11 (+0.94%)  


Despite a recent pullback in bitcoin’s price, which has declined by over 16% since reaching a high of $31,000 two months ago, the cryptocurrency has still displayed an impressive year-to-date increase of nearly 60%. This performance surpasses the 38% rise of Nasdaq, Wall Street’s tech-heavy index. Several bullish tailwinds, including macroeconomic developments, are expected to favor bitcoin’s upward trajectory. The weakening of the dollar against major currencies, with a 1.2% decline to 102.30 on the dollar index, has been beneficial for cryptocurrencies, as a weaker dollar tends to support bitcoin prices. BlackRock, the world’s largest asset manager, filing for a bitcoin exchange-traded fund (ETF) indicates ongoing institutional interest in bitcoin products. While regulatory concerns have affected altcoins, bitcoin and ethereum (ETH) holders are less impacted. Additionally, Ethereum’s zkSync Era, a scaling solution on the Ethereum network, has witnessed significant growth, with a total value locked (TVL) surpassing $500 million, making it the third-largest rollup by TVL. However, digital asset investment products experienced their ninth consecutive week of outflows, amounting to a total of $423 million, although minor inflows were observed after BlackRock’s ETF announcement. Altcoins such as XRP and Cardano (ADA) saw modest inflows amidst regulatory uncertainties.

Following a brief test of the $25,000 support level on June 15, Bitcoin experienced a 6.5% gain as it successfully defended the $26,300 mark. However, the overall sentiment remains somewhat bearish as the cryptocurrency has declined by 12.7% over the past two months. The recent dismissal of Binance.US’s temporary restraining order and their agreement with the SEC have positively influenced investor sentiment. Yet, the regulatory landscape globally continues to impact cryptocurrency prices, with the SEC litigating against major exchanges and the European Union implementing regulations such as the Markets in Crypto-Assets (MiCA) framework. Interestingly, while Bitcoin’s performance has been lackluster, the S&P 500 Index reached a 14-month high on June 16. JPMorgan strategists anticipate potential pressure on the rally in the second half of 2023 if there is a slowdown in growth. Investors will closely monitor the upcoming testimonies of Federal Reserve Chair Jay Powell before congressional committees, while in the UK, a bill proposing stablecoin and crypto regulation has been approved by the House of Lords, signaling potential future regulation in the country. In other news, Crypto.com has faced scrutiny regarding its proprietary trading and market making teams, but the exchange insists that such practices are regulated and ensure fairness and integrity in the market.

Binance Markets Limited (BML), the UK subsidiary of the world’s largest cryptocurrency exchange, has canceled its unused permissions with the Financial Conduct Authority (FCA), which means it can no longer provide regulated activities and products unrelated to crypto. The FCA confirmed the withdrawal of registration upon BML’s request, stating that the firm is no longer authorised by the regulator. Furthermore, the FCA clarified that no other entity within the Binance Group holds any UK authorisation or registration for regulated business activities. In the realm of Web3 gaming, Animoca Brands CEO Robby Yung predicts the emergence of more triple-A console-style games in the coming year, signaling a shift from play-to-earn and casual gaming titles dominating the space. Yung highlighted games like Life Beyond, Devourers, and Phantom Galaxies as examples of this category, with Life Beyond particularly exciting due to its high-quality development team and appealing content style. Meanwhile, Binance issued a cease and desist notice to “Binance Nigeria Limited,” a fraudulent company that was soliciting Nigerian investors. The move followed a warning from Nigeria’s market regulator that the entity was not registered or regulated and thus operating illegally. Binance clarified that the mentioned entity is not affiliated with them and expressed the intention to seek clarity from the Nigerian SEC while cooperating on the next steps. The individual responsible for registering Binance Nigeria Limited reportedly aimed to sell the company name to Binance.

Wyre, a crypto payments firm, has announced that it will wind down its operations due to market conditions. The company clarified that the decision was not influenced by any regulatory agency and stated that it will continue to secure customer assets. Users will be able to process withdrawals normally until July 14th, after which they will need to follow a separate process to recover their assets. In other news, BNB Chain, the blockchain ecosystem powered by Binance’s BNB token, has launched a Layer 2 network called opBNB on testnet. opBNB is an Ethereum Virtual Machine (EVM)-compatible scaling network based on Optimism’s OP Stack and optimistic rollups. It aims to increase transaction speed and reduce fees, supporting over 4,000 transactions per second with an average cost of less than $0.005 per transaction. BNB Chain also operates BNB Smart Chain, BNB Beacon Chain, and zkBNB, with opBNB expected to launch on the mainnet in Q3 2023. Additionally, Ethereum’s core developers are considering a proposal to raise the maximum validator balance from 32 ETH to 2,048 ETH per validator. The proposal aims to address the effective balance cap, which currently limits large-scale staking operations to earn yield on amounts greater than 32 ETH. The increase in the cap could slow down the expansion of the active validator set and allow for auto-compounding of validator rewards. However, there are associated risks such as higher penalties for accidental double attestations or proposals. The proposal is still under debate among core developers.





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