Miniprogram: Daily Cryptocurrency News Summary
1. JPMorgan: The encrypted market is expected to rebound in August, and clearing activities are expected to end this month.
According to Coindesk, JPMorgan stated in their latest research report that the crypto market is expected to rebound in August. Due to the liquidation of Mt. Gox and Gemini's creditors, as well as the sale of confiscated cryptos from criminal activities by the German government, the reserves of bitcoin on major trading platforms have decreased in the past month. As a result, the bank has lowered its estimated net flow in the crypto market from $12 billion to $8 billion from the beginning of the year to now. The report indicates that the liquidation activity should end this month, and the market will resume in August.
2. The cryptocurrency speculation index shows that the speculative sentiment in the first quarter that existed has dissipated, indicating that the bull market may restart.
According to CoinDesk, it was observed that the bull market often stagnates during periods of excessive optimism, and only resumes after speculative bubbles are cleared. Capriole Investment's cryptocurrency speculation index shows that the general phenomenon of speculation in the first quarter has dissipated, indicating that Bitcoin may usher in a new round of bull market price increases. The speculation index measures the percentage of altcoins with a 90-day return rate higher than Bitcoin, which is currently stable below 10%, far below the high point of nearly 60% in January. As the cryptocurrency with the largest market capitalization, Bitcoin reached a new high of more than 0.07 million US dollars in the first quarter and then fell to 0.058 million US dollars. CoinGecko shows that as of the writing of this article, there are more than 14,800 altcoins. Most of them have poor liquidity and it is difficult to prove their use cases. Therefore, altcoins are usually seen as speculative tools, and their trading volume is closely related to Google Trends, which is an indicator of retail investor interest. The outperformance of altcoins relative to Bitcoin is seen as a sign of speculative frenzy. The bursting of speculative bubbles has a corrective effect and helps asset prices return to fundamentals and suppress excessive speculation. Therefore, they lay the foundation for a longer-term and healthier market environment. The cryptocurrency market is no exception. Since 2019, the situation where the speculation index is lower than 10% coincides with the beginning of a sharp rise in Bitcoin, as observed in the first half of 2019, the end of 2020, and the second half of 2023.
3. In June, the trading volume of centralized exchanges' stablecoins hit a new seven-month low, but the total market value rose slightly.
According to CCData cited by BeInCrypto, the trading volume of centralized exchanges' stablecoins in June fell to the lowest level in seven months, down 18% to 97 billion US dollars. Although the trading volume has declined, the total market value of stablecoins has grown by 0.53% to reach 161 billion US dollars, the highest level since April 2022, although the growth rate has slowed down since May. Against the backdrop of increased market uncertainty, investors sought refuge, and the market share of stablecoins rose from 6.22% in May to 6.83% in June. USDT dominates the market share, accounting for 70%, and other stablecoins such as Ethena's USDe also achieved significant growth. The overall slowdown in trading volume reflects a more widespread market uncertainty.
4. The US House of Representatives failed to overturn Biden's veto power over the SAB 121 related resolution.
The US House of Representatives voted on Wednesday to overturn President Joe Biden's veto power over the SAB 121 related resolution, but did not pass, and the US Securities and Exchange Commission's cryptocurrency accounting policy remains unchanged. One of the Democratic core negotiators for cryptocurrency legislation, Representative Maxine Waters, said that the SEC and the banking industry are negotiating changes to the controversial accounting policies. It is reported that SAB 121 was first released in 2022 and has been controversial over the past year. It requires cryptocurrency custodians to record clients' holdings of cryptocurrency as liabilities on their balance sheets. The cryptocurrency industry is concerned that this could prevent banks from protecting digital assets.
5. Sources: Ethereum ETF issuers are eagerly awaiting detailed information on final documents from the US SEC.
According to The Block, after submitting the latest S-1 form on July 8th, potential Ethereum ETF issuers are eagerly awaiting the latest news from the US Securities and Exchange Commission (SEC) about the upcoming products. A source from one issuer said: "The next step is to wait for the SEC's feedback to see what needs to be done next. Do they need a final draft? When do they need it?" They pointed out that the SEC's next feedback will be highly valuable. After the 19b-4 form was approved in May, issuers have been communicating with the SEC on the second part of the two-step process, the S-1 form. Unlike the first form, the S-1 form does not have an effective deadline but still needs to be submitted before the ETF is listed. The SEC has provided feedback to issuers several times for modifying the form, and each round of modification takes several weeks. However, issuers are starting to hope that this process may be coming to an end. Another source from an issuer said: "The SEC is still reviewing, and it seems that we are getting closer and closer to final approval. We expect to submit a final document, but the specific time is not yet clear." The Block previously reported that the last round of submissions was based on the SEC's minor feedback, which may be the final round of feedback. Analysts generally expect these products to be launched, and Eric Balchunas, senior ETF analyst at Bloomberg, pointed out that all signs indicate that they will be launched this month.
6. The Chairman of the US CFTC urges Congress to take action and formulate cryptocurrency regulations as soon as possible.
According to a CoinDesk report, Rostin Behnam, the Chairman of the U.S. Commodity Futures Trading Commission (CFTC), urged Congress to take action as soon as possible to establish cryptocurrency regulations. Although Debbie Stabenow (D-Mich.), Chair of the Senate Agricultural Committee, said that her latest proposal for regulating the cryptocurrency market would soon be submitted to committee members, John Boozman (R-Ark.), a senior Republican member of the committee, said that feedback from industry leaders indicated that the proposal did not yet have sufficient support. Behnam emphasized that the failure of Congress to establish a regulatory framework not only harms the interests of investors, but also puts the United States at a disadvantage in global competition. The Senate Agricultural Committee has been working to develop legislation that would give the CFTC the power to regulate spot trading of digital commodities. Stabenow hopes to share specific legislative language with committee members by the end of this week.
7. Viewpoint: Compliance and risk management of cryptocurrencies are crucial in the coming years.
Compliance and risk management of cryptocurrencies are crucial in the coming years. Beth Haddock of Warburton Advisers proposed five strategies to help advisors protect their brands while serving clients as trustees: align risk appetite with costs, follow SEC marketing rules, document investment processes, implement service provider supervision, and monitor trusted asset damage. Haddock emphasized that advisors should align cryptocurrency investments with their clients' risk tolerance, avoid claiming a lack of necessary skills, and have flexibility in operations to respond to regulatory uncertainty. In addition, Leo Mindyuk of ML Tech explained the Financial Innovation and Technology (FIT) Act, which aims to establish a comprehensive regulatory framework for digital assets to address regulatory uncertainty and consumer rights issues. These strategies and regulations are designed to help advisors and investors maintain trust and security in the rapidly developing cryptocurrency market.
8. U.S. SEC Commissioner: Cryptocurrency market has fraudulent behavior.
In a nomination hearing of the Senate Banking Committee on Thursday, Securities and Exchange Commission (SEC) commissioner Caroline Crenshaw told senators that rampant fraudulent behavior in the cryptocurrency market led her earlier this year to refuse approval of a Bitcoin ETF. In January of this year, Crenshaw insisted on opposing these trading products, pointing out that the products are not technically ETFs but exchange-traded products (ETPs) operating under different rules. The commissioner said that approving Bitcoin (BTC) products would be "a reckless measure that would put us on a possible path to further sacrificing investor protection." In measuring whether this is in the public interest, she reiterated on Thursday that she felt she had to oppose the move: "Because there is serious fraud in the underlying cash market globally, and it's opaque."
9. Viewpoint: If the poor performance of the U.S. stock market evolves into a wider adjustment, cryptocurrencies may further decline.
Joel Kruger, a strategist at LMAX Group, said in today's market update that if the poor performance of the U.S. stock market evolves into a wider adjustment, cryptocurrencies may further decline. Analysts said, "Currently, we believe that the biggest risk faced by crypto assets is that the U.S. stock market is severely overbought and may be on the verge of collapse. While this correlation is not absolute, there is evidence to suggest that a significant pullback in stocks could put pressure on crypto assets, at least temporarily." Data shows that at noon in New York, the Nasdaq index fell 1.8%, and the S&P 500 fell 0.9%. Bitcoin, which climbed above $59,000 earlier in the day due to U.S. inflation news, is now down 0.6% to about $57,500.
10. Data: 90% of cryptocurrency holders say they are keen to vote for candidates who support cryptocurrencies.
According to data from Morning Consult as of July 2023, 52 million Americans own cryptocurrency, with one-sixth of cryptocurrency owners residing in seven key states. Compared to registered voters in key states, registered voters who also own cryptocurrency are: 1) younger: 65% are Gen Z and Millennials; 2) more diverse: 35% are non-white. Cryptocurrency voters appear to be more bipartisan than general voters: 35% Democrat, 34% Republican, and 31% persuadable. This suggests that they could be a decisive factor in the closely contested races. According to a national poll of 1,573 U.S. adults conducted by Ipsos in the first quarter of 2024, 90% of cryptocurrency holders said they are likely to vote on November 5. They are eager to vote for candidates who support cryptocurrencies, which could make them a decisive factor in the 2024 election.
11. Analysis: The drop in ETH in early July resulted in the liquidation of more than 0.3 billion U.S. dollars of long positions, and the possibility of short-term selling by investors decreased.
ETH fell 18% from July 1 to July 8, hitting a low of $2,826, and has rebounded to around $3,070. Investors' disappointment is understandable as more than $0.313 billion in leveraged long positions were liquidated during this period. Although the current price is still below the $3,400 support level, on-chain and derivative indicators show that traders are gradually regaining confidence. Data disclosed by on-chain analyst Leon Waidmann shows that 40% of ETH's supply is locked in staking and DApps, while the supply on exchanges has decreased over the past month, with the amount of ETH on exchanges dropping from 13.34 million to 12.21 million, and fewer tokens available for immediate trading means that the likelihood of investors selling in the short term is lower.
12. Senior ETF analyst at Bloomberg: Solana ETF may be approved as late as mid-March 2025.
Bloomberg's senior ETF analyst Eric Balchunas explained on social media platform X on Wednesday that the final deadline for Solana ETF seems to be mid-March 2025. But from now until then, the most important date is November. If Biden wins, these ETFs are likely to be eliminated. If Trump wins, anything is possible.