Biweekly Headlines 2024 May W2 – W3

“The theft from one man is a tragedy.

The theft from billions is a statistic.”  – Jimmy Song

Biweekly News Roundup

1. Bitcoin (BTC) and Market Performance

  • BTC price and milestones 
    • On May 15, BTC passed $66K as US core inflation hit a three-year low.
    • On May 16, Bitcoin ETFs saw daily volumes of nearly $6B, returning to levels not seen since late March, with BTC’s price hitting new May highs near $67K.
  • US core inflation impact
    • Weak U.S. data strengthened the case of a Fed rate cut in September and the BOE and ECB are likely to cut rates in June.
  • ETF volumes and performance
    • Since their launch, U.S. spot Bitcoin ETFs have accumulated $12.3B in assets under management. Despite, Grayscale’s GBTC still being the largest Bitcoin ETF, BlackRocks IBIT remains the top choice of institutions garnering investment from 168 asset managers worldwide.
  • Market trends and volatility
    • Glassnode analysts say data suggests the crypto market remains in the early stages of a macro uptrend. BTC’s volatility persists after the halving, but surging ETF inflows and thriving L2 ecosystem growth fuel long-term optimism.
    • Mirroring the 2021 cycle, the profits from GameStop could spill into altcoins, catalyzing the start of the 2024 altcoin season. On the yearly chart, the returns of GameStop shares are up over 154%, compared to BTC’s over 129% yearly returns.
  • BTC’s stability compared to tech stocks
    • BTC volatility in the annual timeframe has dropped below that of top tech stocks, including Tesla, Meta, and Nvidia, signaling its growth toward becoming a more mature and stable asset class.
  • Potential future price projections 
    • Former Twitter CEO Jack Dorsey believes the price of BTC could reach over $1M by the end of 2030.
    • Cathie Wood predicted that BTC could go as high as $1.5M by that time.

2. Ethereum (ETH) and Other Cryptocurrencies

  • ETH price and capital rotation
    • Ether’s price lags due to weaker capital rotation, but due to lower transaction fees, the amount of Ether being burned has declined to its lowest levels since the Merge, while supply growth has risen to its highest level since the upgrade.
  • Performance of altcoins 
    • DOGE has exhibited exceptional performance this year with a market capitalization of approximately $22B, experiencing a price surge of over 70%. The previous golden cross, seen in early January 2021, presaged an 8,000% price surge.
    • NEAR has now appreciated more than 50% month-on-month.
    • With its current $4.5B market capitalization, PEPE has surged over 40% in the past week, making it the third-largest memecoin behind DOGE and SHIB.
    • SOL’s share in total decentralized exchange volumes has grown tenfold from 2% to 21% in one year, eating into Ethereum’s market share.
    • USDT has minted another $1 billion, bringing its market capitalization above $110B, which could catalyze Bitcoin’s next move to new all-time highs.

3. Regulatory and Political Developments

  • Repeal efforts by a bipartisan House coalition
    • A bipartisan House coalition repealed the SEC’s punitive SAB 121 accounting rules for crypto — a clear rebuke of Gensler’s aggressive tactics.
  • Legislative changes
    • UK: An April change to United Kingdom law will allow authorities to treat crypto like other assets by seizing it without accusing suspects of wrongdoing.
    • Switzerland: Switzerland cracks down on crypto tax evasion with upcoming Automatic Exchange of Information (AEOI) expansion.
    • France: French securities regulator warns investors against crypto exchange Bybit which has been blacklisted by the AMF since May 2022 for non-compliance with French regulations.
    • Turkey: Turkey takes crypto bill to the parliament, aiming to bring crypto licensing to the country.
  • Political implications and candidates’ stance on crypto
    • Robert F. Kennedy Jr., a pro-crypto presidential candidate, will appear at the Consensus 2024 crypto conference in Austin, Texas.
    • The poll’s data shows crypto is top of mind for voters in swing Senate states and 20% of swing state voters prioritize crypto in upcoming US elections.
    • The Democratic Party of Korea pledged to enable spot ETF trading during their campaign. After their victory, they are now fulfilling this promise.
    • Ghana Post launched a crypto stamp collection to showcase its king’s 25-year-long journey of persevering in traditional values and adopting new-age technology.

4. Institutional Involvement and Investments

  • Institutional investment trends in BTC ETFs
    • Revenue at Digital Currency Group (DCG) increased 51% to $229M in the first quarter of 2024, driven by the rebound in crypto markets.
    • Being the biggest bitcoin futures exchange by open interest in the U.S., the CME might soon offer spot bitcoin trading.
  • Notable purchases 
    • State of Wisconsin purchased nearly $100M worth of BlackRock Spot Bitcoin ETF in the first quarter of the year.   
  • Engagement of significant players 
    • BlackRock notes that the coming months will likely see significant players like sovereign wealth funds, pension funds, and endowments engaging with spot Bitcoin ETFs.
  • Performance of investment firms 
    • CoinShares posted a record revenue in Q1, backed by markets and Bitcoin ETFs, a 216% increase year-over-year.
    • Matt Hougan, CIO for Bitwise, believes BTC ETFs are just getting started and central banks may begin allocating BTC as a non-debt reserve asset. Hougan predicts that Bitcoin ETFs could gather over $200 billion of inflows by the next halving in 2028, aligning with the historic growth trajectory of gold ETFs after their debut, contributing to a projected Bitcoin price above $250K by 2028.

5. Technological Innovations and Collaborations

  • Exploration of shared ledger technology by major financial institutions
    • Citi, JPMorgan, Mastercard, Swift and Deloitte are teaming up to explore sharing ledger technology for multi-asset transactions.
  • Pilot projects and blockchain technology adoption
    • The world’s largest securities settlement system, DTCC, completed a pilot project with blockchain oracle Chainlink (LINK) to accelerate fund tokenization with JPMorgan, Templeton, and BNY Mellon. 

6. Economic and Corporate Strategies

  • Strategic responses to economic pressures in Japan
    • In response to sustained economic pressures in Japan, notably high government debt levels, prolonged periods of negative real interest rates, and the consequently weak yen, the Japanese listed firm Metaplanet announced a strategic shift in its treasury management strategy, prioritizing a Bitcoin-first and Bitcoin-only approach.
  • Corporate plans and restructuring proposals 
    • FTX has proposed a new reorganization plan that would see a whopping 98% of its creditors get back 118% of their claims within 60 days of court approval. However, only creditors holding claims in an allowed amount below $50,000 will be eligible for the 118% recovery.
    • The halving and a possible U.S. mining tax have miners considering new locations for basing their cost-sensitive operations, and miners eye the Middle East as the next region for growth.
    • Circle plans to move its legal base from Ireland to the US, which could translate to higher taxes for the company.

May 18, 2024

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