Market Update Cryptocurrency Market Update: Analysis and Insights – June 26, 2024

Markets are down again this week. The Bitcoin price is losing nearly 6%, and the price of Ether is down almost 5%. Performances are more scattered for altcoins: The near protocol’s native token and TRON’s native token TRX are up by more than 5%. 

The Bitcoin price is testing again some of the lowest levels observed in the past four months. The lowest weekly price of 58,402 US dollars was reached on Monday. And this price was last observed at the beginning of May.  

There is still a strong support below 60,000 US dollars, but the pressure is mounting.  

Mount Gox’ rehabilitation trustee officially announced that repayments to virtual exchanges will start in July 2024. We are talking about 142,000 BTCs worth more than 8.7 billion US dollars at current prices. According to the contents of this letter by the Trustee, the schedule of distributions is not clear. Virtual exchanges that have duly completed the administrative process would act as intermediaries to repay the final creditors. But these final creditors still need to be patient.. 

The announcement was made on Monday, and naturally the market reacted, dipping below 60,000 and bouncing back to 62,487 US dollars: this is the highest level reached today. 

There would likely be consequences to these repayments of course. The increased supply should put more pressure on the Bitcoin market. However, it would also give institutions and retail investors an opportunity to buy. I mean It sounds like an easy argument, but we have to keep in mind that most institutional investors, from pension funds to regular asset managers, are not in the speculation business. They are looking for an entry point that would satisfy their return objective. And the mount gox event is a specific short-term risk event: another hurdle to pass, but it shouldn’t be a deterrent for long-term holders. 

Looking at the Bitcoin ETF net-flows this week, we had regular outflows totaling less than 1 billion per week, but the sale figure for Monday is nothing out of the ordinary: we had 175.5 millions dollars worth of ETFs sold on Monday, and it was followed by an inflow of 31 million yesterday. 

From a Bitcoin supply perspective, we also know that the German government sold 325 million US dollars worth of Bitcoin by Friday, and this would have contributed to the end of week performance: just a negative 1.2% in the span of 2 days. 

The government has more to sell: 
This is here one of the German government’s addresses. We can see that there’s been activity almost every business day this week. 

https://bitcointreasuries.com/ 

The German government is among the top 5 holders with nearly 3 billion US dollar worth of holdings. The US and China lead the pack. 

So the current supply shocks are certainly weighing on the market, but the ETF figures suggest that there is really no panic.   

https://blog.coinshares.com/volume-188-digital-asset-fund-flows-weekly-report-2582269d7257 

Looking at the bigger picture provided by Coinshares: the last two weeks ending last Friday saw outflows of 1.2 billion US dollars. Half of these outflows are from Bitcoin-related products. The report also suggests that investors consider the weakness in the altcoin market as a buying opportunity. 

Back to Mount Gox, and I will conclude with this... 
 
Creditors have been waiting for 10 years to get repaid. Most will likely cash out at least part of their gains, it would be unreasonable not to, and it is not bad news at all. It sends à signal again that you can buy cryptocurrencies on exchanges like FTX or Mount Gox, and despite poor management, you could still be reimbursed, if not in cash at the exact valuation of your portfolio at bankruptcy like in the FTX case, you’d be reimbursed in cryptocurrencies. Given that the buy-and-hold has been the best performing strategy by far, it is definitely the better outcome for the Mount Gox creditors. 

https://www.lookintobitcoin.com/charts/10-year-hodl-wave/ 

The question is: how many of these creditors would have held (or hodl) their bitcoins for ten years? This graph produced by LookIntoBitcoin is giving us an indication: a bit more than 17% only. So the Mount Gox bankruptcy proceedings plan has probably been one of the best performing pension plans, performing with an average annual return above 50%. 

https://panteracapital.com/blockchain-letter/newsflash-crypto-owners-vote/ 

Pantera, the 4 billion asset manager that invests in crypto projects, compared Solana products to the early days of the Apple MacOs line of products. So Solana is thriving from this ‘Apple’ effect. Its products are probably almost all collectibles, but Solana is also thriving from the collectible business. 
 
https://drip.haus/ 

https://analytics.topledger.xyz/tl/public/dashboards/7XqwqSZ3r7aYD5EVBwd67VHQ3Y1pXrq0agQptxuU 

In its letter, Pantera points out that this project alone, DRiP, has sent close to 170mm collectibles to 2.27mm wallets. Pantera also points out the growth in active users and DEX activity.  

So this is the main ecosystem that we have in Solana.. it’s presenting itself like this new shiny product and so far it seems to be working.. 

To conclude this session - we have 

• First quarter GDP tomorrow - we’re expecting 1.3% growth. 

• Fed monetary policy report on Friday - report that must be submitted to congress. 

https://www.tradingview.com/x/tc08DYUY/ 

Markets turned optimistic with the latest inflation figures: the S&P 500 reached its all time high last week, and the dollar is pointing higher.

Next date for the Ether Spot ETF approval: July 2nd, but we have to rely on the SEC’s goodwill..