Friday, 23 June 2023

Market Summary

Market Summary 23 June 2023

Bitcoin Price: US$ 29,884.92 (-0.36%)
Ethereum Price: US$ 1,872.01 (-0.91%)  


Stablecoin movement has emerged as a potentially influential factor in predicting the trajectory of asset prices, as Bitcoin and ether experience recent surges. While Bitcoin and ether saw a temporary dip of -0.63% and -0.70% respectively, their overall growth of 18% and 14% since June 15 has prompted investors to assess the evolving landscape. Although macroeconomic data, such as initial jobless claims, had minimal impact on prices, the movement of stablecoins has garnered immediate attention. Glassnode, an on-chain analytics firm, reported a 5.6% increase in total stablecoins on exchange addresses since June 14, ending a previous decline of 60%. This surge in stablecoins signifies heightened buying power and bullish sentiment, akin to more people lining up to vote for the cryptocurrency they wish to exchange their stablecoins for. In another development, Justin Sun, the founder of Tron network, withdrew $29.7 million worth of ether from Lido Finance and subsequently sent the tokens to Huobi exchange. This move, often indicating an intention to sell, coincided with the 16% surge in ETH’s price during the week. Meanwhile, the price ratio between ETH and BTC hit a two-month low due to bitcoin’s stronger rally following the news of a BTC exchange-traded fund (ETF) from traditional finance giants. Bitcoin’s exclusion from recent regulatory actions against exchanges Binance and Coinbase further bolstered its position in the eyes of regulatory agencies. However, market participants anticipate potential inflows from BTC to ETH in the absence of external shocks, fueled by Ethereum’s unique functionalities in areas such as decentralised finance (DeFi) and non-fungible tokens (NFTs).

Crypto options trading has surged as Bitcoin’s price rallies to a two-month high, reaching $30,800. The recent increase in spot bitcoin ETF applications by major institutions like BlackRock, WisdomTree, and Invesco has fueled institutional demand for the cryptocurrency. With the market trajectory shifting, traders are turning to options to capitalise on the rally, resulting in a record-breaking single-day notional volume of $3.3 billion in bitcoin options contracts on Wednesday. Deribit accounted for over 80% of this global volume, indicating a significant interest in call options as a leveraged bullish bet. In another development, the filing for a spot bitcoin ETF by BlackRock appears to have influenced positive sentiment among bitcoin holders and investors, as evidenced by a sudden increase of 2,500 BTC held in one Coinbase Custody wallet. The wallet, linked to Coinbase, received the bitcoin shortly after the ETF filing, suggesting potential institutional buying. Meanwhile, FTX has filed a lawsuit seeking over $700 million from investment firms it was previously associated with. The suit targets K5 Global, Mount Olympus Capital, SGN Albany Capital, and their affiliated entities, alleging improper transfers and seeking the return of funds.

Nevada’s business regulator has issued a cease and desist order against Prime Trust, stating that the crypto custodian is in a “critically deficient” financial condition and has been unable to fulfill customer withdrawals since June 21. The regulator alleges that Prime Trust has breached its fiduciary duties to customers and failed to safeguard customer assets. Prime Trust has 30 days to respond to the order and can contest it through an administrative hearing. In a separate development, the International Monetary Fund (IMF) has reiterated its call for crypto regulation in certain countries but stated that an outright ban may not be the most effective approach. The IMF highlighted various approaches taken by countries in Latin America and the Caribbean, including accepting Bitcoin as legal tender and exploring central bank digital currencies (CBDCs). The IMF suggested that well-designed CBDCs can enhance payment systems, financial inclusion, and transparency, and encouraged addressing the drivers of crypto demand. Meanwhile, German software company SAP is testing cross-border payments using the US Dollar Coin (USDC), a stablecoin pegged to the US dollar. SAP believes that digital money and blockchain technology can address the challenges faced by small and mid-sized enterprises when sending money overseas. Customers can participate in a test phase using USDC on a separate blockchain, which could potentially lead to increased Ethereum-based crypto adoption among major corporations using SAP’s services.




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