Tuesday, 4 June 2024

Market Summary

Market Summary 4 June 2024

Bitcoin Price: US$ 68,840.21 (+1.55%) 
Ethereum Price: US$ 3,767.06 (-0.37%) 

Bitcoin ETFs have become a significant part of the financial landscape, accounting for 26% and 56% of BlackRock and Fidelity’s total inflows respectively. This surge in interest has led to BlackRock’s iShares Bitcoin Trust (IBIT) surpassing the Grayscale Bitcoin Trust (GBTC) as the world’s largest spot Bitcoin ETF. However, despite this growth, ETF inflows have recently levelled out, with many issuers recording days of zero inflows and outflows. In the crypto mining sector, Bitfarms’ revenue fell by 42% in May, the first full month since the Bitcoin halving took effect. The company attributed this decline to “unusually cold temperatures” at its Rio Cuarto facility in Argentina. Despite the fall in production, Bitfarms’ stock increased 2.92% on the Nasdaq on June 3, although it is still down 15.9% in 2024. Meanwhile, the financial world was reminded of the vulnerabilities of centralised systems when a glitch caused the listed price of several securities on the New York Stock Exchange to drop by up to 99.9%. In response to this incident, Chainlink co-founder and CEO Sergey Nazarov highlighted the importance of decentralised oracle networks in mitigating such risks and suggested that incorporating blockchain technology would enhance the reliability and transparency of today’s financial markets. 

In anticipation of the implementation of the Markets in Crypto-Assets Regulation (MiCA) rules, Binance is proactively categorising stablecoins into “regulated” and “unauthorised” based on their compliance with the new regulations. The plan is to gradually transition users from unauthorised to regulated stablecoins over time, despite the prevailing uncertainty over which stablecoins are MiCA-compliant. This strategy, coupled with a “sell-only” approach for unauthorised stablecoins, is aimed at minimising potential market impacts. Meanwhile, the digital asset funds landscape has been experiencing a positive trend, with a fourth consecutive week of inflows reported in May, totalling $2 billion according to the CoinShares report. Bitcoin dominated these inflows, reflecting a bullish sentiment among investors, while Ether and Solana’s SOL also saw positive inflows, albeit multi-asset funds recorded outflows. Notably, the U.S. Securities and Exchange Commission approved Ether ETFs in the U.S. on May 23, 2024, triggering a movement of more than $3 billion in ETH from centralised exchanges, which suggests potential supply shock issues for the digital asset in the near future. On another front, the cost of obtaining crypto exchange licenses in Hong Kong has dropped to several million dollars, a significant decrease from the $25 million seen a year ago, as stated by HashKey Group’s COO. This comes as Hong Kong regulators have expelled all unlicensed crypto exchanges in the city since June 1, leaving more than 11 firms currently holding the “deemed to be licensed” designation. 

MicroStrategy and its founder, Michael Saylor, have recently settled a tax evasion lawsuit for $40 million, marking the largest-ever income tax fraud recovery in the District of Columbia. Despite stepping down as CEO due to the lawsuit, Saylor continues to uphold MicroStrategy’s pro-Bitcoin stance, with the company owning a substantial 214,400 BTC as of May 1, 2024. In a parallel development, the Dubai Financial Services Authority (DFSA) has made significant updates to its cryptocurrency token regime. These amendments, which include easing restrictions on funds investing in crypto tokens and reducing the application fee for token recognition to $5,000, aim to foster innovation while aligning with regulatory objectives and reflecting market developments and international recommendations. Meanwhile, SingularityNET has announced the finalised dates for the Artificial Superintelligence Alliance (ASI) token merger with its native AGIX token. This merger, set to commence on June 11, aims to create the largest open-sourced decentralised network in the AI industry, with FET tokens being renamed ASI and FET, AGIX, and OCEAN tokens being converted into ASI tokens at specific conversion rates. 

A Chinese trader, known as CryptoNakamao, lost $1 million to a hacking scam involving a promotional Google Chrome plugin called Aggr, which steals users’ cookies, enabling hackers to bypass password and two-factor authentication verification to access victims’ Binance accounts. The trader’s account began trading randomly on May 24, and by the time they sought assistance from Binance, the hacker had already withdrawn all funds. Meanwhile, in Australia, the first spot Bitcoin exchange-traded fund (ETF), the Monochrome Bitcoin ETF (IBTC), which holds the asset directly, is set to launch for trading when markets open on Tuesday, June 4. Monochrome Asset Management, the first to receive approval under a new crypto asset licensing category made under Australian Financial Services (AFS) licensing rules in 2021, ensures that IBTC’s holdings are stored offline in a device not connected to the internet, meeting “Australian institutional custody regulatory standards.” On another front, Ethereum layer-2 blockchain Linea’s decision to halt block production after being hacked underscores the need for layer-2 firms to prioritise decentralisation sooner rather than later, according to Alex Gluchowski, CEO of Matter Labs. On June 2, more than $2.6 million in Ether (ETH) was transferred off Consensys-launched Linea after a hacker exploited Linea-based decentralised exchange Velocore, and while Linea has since resumed block production, the incident highlighted the urgent need for decentralisation on Ethereum layer. 

Source: https://cointelegraph.com 

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