Bitcoin and cryptoassets saw a pullback this week along with crypto-related equities which also shed some of their earlier gains after hitting fresh twelve-month highs. The latter had seen an impressive run, with most individual names strongly outperforming BTC recently. Investors now appear to be looking for the next price catalyst which could come when the SEC opines on the first of the spot bitcoin ETFs on August 13. US equities were mixed this week even though the second quarter corporate earnings cycle is off to a positive start. A third of S&P 500 companies is expected to report next week, including heavyweights such as Alphabet, Meta, Exxon and Microsoft, offering insight into consumer and corporate spending amid cooling inflation. On the macroeconomic data front, US retail sales increased in June for the third consecutive month, suggesting that consumers remain fairly upbeat despite prospects of recession.
The crypto market’s bullish sentiment, which was spurred by BlackRock’s announcement of a spot Bitcoin ETF on June 15 and which triggered a surge in cryptoasset prices and related stocks, faced a reality check this week. The cryptoasset market was reminded that institutional adoption still faces significant obstacles, particularly concerning regulatory uncertainties. Leading US exchange operator Nasdaq announced the suspension of its plans to launch a digital assets custodian service, attributing the decision to the current regulatory environment in the United States. The service, originally scheduled for launch in the second quarter, had been in the works with infrastructure and regulatory approvals being pursued, as mentioned by Nasdaq’s CEO Adena Friedman during an earnings call on Wednesday. “This quarter, considering the shifting business and regulatory environment in the US, we’ve made the decision to halt our launch of the US digital assets custodian business and our related efforts to pursue a relevant license,” Friedman said.
Despite this setback, Nasdaq intends to support the digital asset industry through various means, such as partnering with potential ETF issuers and providing technology for crypto custody. Adena Friedman said that the company would “remain committed to supporting the evolution of the digital asset ecosystem.” It is evident that while the market experienced positive momentum with the prospect of a Bitcoin ETF and rising cryptoasset prices, the road to institutional adoption remains uncertain. Nasdaq’s decision to halt its digital assets custodian service due to regulatory concerns serves as a reminder of the ongoing challenges the industry faces. The SEC has repeatedly pushed for tougher custody rules including cryptoassets, hinting at the need to separate exchanges and custodians. Earlier this year, SEC Chair Gary Gensler pushed back on the idea that crypto exchanges could also act as safe qualified custodians for investment advisers.
Market Overview
The global cryptoasset market capitalization currently amounts to $1.246 trillion – little changed from the $1.25 trillion one week ago, with bitcoin accounting for 46.6%. Among the Top 30 cryptoassets by market cap, Stellar (XLM) outperformed, gaining more than 26% over the week. The price of bitcoin (BTC) decreased slightly by 1.3% to $29,901 and the price of ether (ETH) fell by 2.3% to $1,889. The total value locked (TVL) in DeFi is sitting at roughly $44 billion – with Ethereum (excluding Layer 2s) accounting for about 58% of TVL.
This Week’s Headlines
- Societe Generale becomes first company to win French crypto license
- US House Republicans introduce much-awaited crypto market overhaul
- SEC Chair Gensler responds to Ripple court decision, says he’s disappointed over treatment of retail investors
- UK financial regulator FCA launches permanent Digital Sandbox
- Crypto investors depart Sequoia Capital in VC team reshuffle, Bloomberg reports
- US DOJ accuses Sam Bankman-Fried of leaking Caroline Ellison’s diary to the press
- BNB Chain burns nearly $500 million worth of BNB tokens
- Uniswap founder Hayden Adams unveils UniswapXprotocol to aggregate DEX liquidity
- OpenSea launches peer-to-peer NFT swaps function “Deals”
Notable Deals and Fundraising
- Polychain Capital raises $200 million for fourth fund, Fortune reports
- CoinFund raises $158 million for new early-stage crypto startup investment fund
- RISC Zero raises $40 million Series A for zero-knowledge virtual machine
- Blockchain interoperability startup Cosmic Wire raises $30 million in a seed round led by Solana Foundation and Polygon
- Manta Network developer p0x labs raises $25 million, launches Layer 2 for ZK apps
- Cross-chain DeFi lending protocol Radiant Capital raises $10 million from Binance Labs
- Crypto miner Argo Blockchain raises $7.5 million in share sale
- Ethereum-backed stablecoin developer Ethena raises $6 million in a seed round led by Dragonfly Capital
- DeFi mortgage protocol PWN raises $2 million at a $42 million valuation
- Side Protocol raises $1.5 million in pre-seed funding to grow cross-blockchain liquidity network
