Crypto Scoop: Bitcoin Takes A Nosedive Below $60,000 For The First Time Since May

While prices may be down, market sentiment remains positive with exciting news like the Solana ETF application. In this edition of the Crypto Scoop, we review the following:

• Price moves of top cryptocurrencies
• Predictions for ETFs and application for a Solana ETF
• Stablecoin’s milestone growth
• Global trends in crypto adoption and regulatory changes and more.

Bitcoin Takes A Nosedive Below $60,000 For The First Time Since May 

The prices of top cryptocurrencies took a nosedive on Monday, with Bitcoin (BTC) breaking below the $60,000 mark for the first time since May 3, 2024, and ETH dropping to $3,200. This market shift seemed to be spurred by the announcement of the trustee for the defunct Mt. Gox exchange about plans to return over 140,000 BTC to clients starting in July. This caused ripples across the market, contributing to a significant drop in the Crypto Fear & Greed Index, which fell 21 points to 30, marking its lowest level in 18 months. Coinshares' latest report highlights this shift in investor sentiment, noting significant capital outflows for a consecutive week, totalling $584 million. However, the Crypto index has since rebounded to 40, bitcoin is now trading above $61,000, and ETH is trading at $3,400. 

Despite the market's current turbulence, Alex Thorn, Galaxy's head of research, believes the impact of the Mt. Gox Bitcoin distribution will be less severe than anticipated. Thorn argues that most of the selling pressure will come from individual creditors receiving less than half of the total 140,000 BTC. These creditors are primarily long-term Bitcoin enthusiasts unlikely to sell their coins immediately. Prominent on-chain analyst Willy Woo attributes Bitcoin's recent plunge below $60,000 to a combination of speculators continuously opening new long positions and miners selling Bitcoin to fund hardware upgrades. Woo expects the top cryptocurrency to rebound once the ongoing "culling of weak miners" is complete.

Amid the current market volatility, MicroStrategy's executive chairman and co-founder, Michael Saylor, remains bullish on Bitcoin's long-term prospects. Saylor predicts that Bitcoin will eventually reach $10 million per coin, citing its finite supply and decentralised nature as crucial factors that make it "perfect money" compared to traditional currencies. Saylor also speculates that China will become a strong supporter of Bitcoin in the future, contributing to its potential for revolutionary changes in the global financial system.

Crypto ETFs Take Center Stage Amid Notable Initiatives And Features

Bitwise, a prominent crypto asset manager, predicts that Ethereum spot ETFs will attract over $15 billion in net inflows within the first 18 months of their launch in the U.S. Bitwise's Chief Investment Officer, Matt Hougan, based this estimate on Bitcoin's ETF performance and Ethereum's market size relative to Bitcoin. Additionally, Hougan expects the value of Bitcoin locked in U.S. ETFs to rise from $56 billion to $100 billion by the end of 2025.

Meanwhile, VanEck has announced it will waive fees for its spot Ethereum ETF, mirroring its strategy with its Bitcoin ETF launched earlier this year. Matthew Sigel, VanEck’s Head of Digital Assets Research, stated that this move aims to position VanEck as the leading provider of crypto ETFs, even if it means initial losses. Sigel emphasised that the fee waiver will lower entry barriers for new investors and generate long-term interest in Ethereum. VanEck also filed for the first Solana ETF in the U.S., prompting Solana's (SOL) price to surge by 7% to $150. The VanEck Solana Trust aims to leverage Solana's decentralised nature and high utility. Sigel highlighted Solana's unique position as an "open-source blockchain software" capable of handling various applications without the need for sharding or layer-2 networks.

Adding to the momentum, the Solana Foundation has introduced a new feature called Solana Actions and blockchain links (or “blinks”). This innovation allows users to perform Solana transactions via shareable links on websites, social media platforms, and QR codes, facilitating seamless online purchases, crowdfunding, and on-chain voting. Meanwhile, Standard Chartered Bank shared plans to launch a Bitcoin and Ether trading desk, highlighting the growing demand for Bitcoin and Ethereum from its institutional clients. 

Stablecoins Achieve Milestone Growth While Cardano Demonstrates Resilience Against Hacks

The average monthly stablecoin volumes have skyrocketed from $100 billion four years ago to over $1 trillion recently, signalling rapid growth. According to Token Terminal, the monthly stablecoin transfer volume surged to over $1.68 trillion in April 2024, a significant increase from the $100 billion recorded in October 2020. This analysis included stablecoins from major issuers such as Tether, Frax Finance, Circle, Paxos, MakerDAO, Liquity Protocol, Athena Labs, Angle Protocol, Aave, Monerium, and others. This 16-fold rise underscores the potential of stablecoins in enhancing financial processes and facilitating cross-border transfers.

One notable highlight is the performance of Tether (USDT) on the TRON network, which surpassed Visa’s average daily volume, according to Lookonchain. The 24-hour trading volume of TRON-based USDT reached $53 billion, surpassing Visa's daily average of $42 billion for Q1 2024. This milestone is significant given Visa’s status as one of the world’s largest payment processors, managing billions of transactions across over 200 countries and regions.

Meanwhile, the Cardano blockchain recently demonstrated its resilience against a sophisticated attack. On June 25, the Cardano network experienced a distributed denial-of-service (DDoS) attack starting at block 10,487,530. The attack aimed to exploit the network by manipulating transaction fees and potentially stealing staked tokens. Raul Antonio, CTO of Fluid Tokens, explained that the attack sought to take advantage of the current fee structure related to reference scripts, which impact validator work but not transaction fees. However, Cardano developers, led by Philip Disarro, founder and CEO of Anastasia Labs, successfully countered the attack. They managed to reclaim the stolen ADA tokens and halt the DDoS attack, showcasing the network's robustness and the developers' expertise in safeguarding the blockchain.

Recent Developments in Global Cryptocurrency Regulation and Adoption

Nigeria has issued a 30-day deadline for crypto firms to re-register under a new regulatory regime. The Securities and Exchange Commission (SEC) announced this directive on June 21 as part of its Accelerated Regulatory Incubation Program (ARIP) for Virtual Assets Service Providers (VASPs). This move aims to amend existing digital asset issuance rules, offering platforms, exchanges, and custody to better align with current industry trends.  

The Pacific Island nation of Vanuatu is also making strides in crypto regulation, expecting to pass a long-awaited digital asset and service provider bill in September. The Vanuatu Financial Services Commission (VFSC) aims to establish licensing and registration requirements for VASPs, aligning with Financial Action Task Force (FATF) standards to assess and mitigate risks associated with crypto service providers.

Meanwhile, in Japan, a survey by Nomura Holdings and its digital asset arm Laser Digital revealed that 54% of institutional investors plan to invest in cryptocurrencies over the next three years. The survey, involving 547 investment managers, highlighted portfolio diversification and high return potential as key drivers. About 60% of respondents view crypto assets as a diversification opportunity, reflecting an optimistic outlook for the crypto sector's future in Japan.

In the United States, Congressman Matt Gaetz introduced a bill to allow federal income taxes to be paid with Bitcoin. Inspired by El Salvador’s success with cryptocurrency, Gaetz believes this legislation will modernise the U.S. tax system and promote technological leadership. The bill mandates the U.S. Secretary of the Treasury to establish a program enabling federal income taxes to be paid with Bitcoin, aiming to increase efficiency and flexibility for American taxpayers.