After breaching new all-time highs recently, bitcoin has experienced a moderate pullback and is hovering at about $63,500. Despite this healthy correction, which served to alleviate some of the excessive leverage in the market, the fundamental landscape for BTC remains bullish, buoyed by ongoing supportive factors. It’s also worth noting that pullbacks exceeding 10% are common in bull markets, even amidst bitcoin’s ascent from cyclical lows to peaks. The occurrence of bitcoin’s first week of net outflows from spot ETFs since late January likely played a role in this correction, highlighting an increasingly visible short-term correlation between ETF flows and BTC price movements. Notably, the recent outflows from GBTC appear to have been a significant catalyst for the observed price action.
Over the course of Monday through Thursday, the GBTC ETF witnessed the shedding of over 27,000 BTC (equivalent to $1.84 billion), surpassing the expectations of many market participants. Monday saw a particularly notable outflow of $642.5 million from GBTC alone. Data from Farside Investors indicates that cumulative weekly net outflows across all ETFs amounted to $836 million as of Thursday, marking four consecutive days of net capital leaving the US spot bitcoin ETF sector and matching its longest streak in the ten weeks of trading. On another front, trading volume for US spot bitcoin ETFs surpassed the $150 billion threshold recently, primarily driven by BlackRock’s IBIT.
In terms of crypto sector performance, real-world asset (RWA) tokens notably surged by 20% during this week’s crypto rebound, while select AI tokens also demonstrated strength. Memecoins continue to lead this year’s crypto rally, with tokens such as WIF and PEPE gaining more than 10x YTD and 5x YTD, respectively, compared with a 50% gain YTD for BTC. In monetary policy developments, the Federal Reserve opted to maintain the Fed Funds Rate at the range of 5.25% to 5.50% during its recent meeting, a decision largely in line with expectations. The FOMC reiterated its projection of 75 basis points of cuts in 2024. Market sentiment now anticipates at least one rate cut by the July 31 FOMC meeting, with expectations of rates being lowered by 50 to 100 basis points by the end of 2024, as indicated by the CME FedWatch Tool. Following the meeting, markets rallied, with risk assets and short-duration treasuries notably outperforming.
Market Overview
The global cryptoasset market capitalization currently amounts to roughly $2.54 trillion – compared with $2.74 trillion on Friday last week, with bitcoin accounting for about 49.2%. Among the Top 30 cryptoassets by market cap, Aptos (APT) outperformed, gaining about 28% over the week. The price of bitcoin (BTC) fell by 6.1% to $63,700 while the price of ether (ETH) decreased by 9.2% to $3,340. The total value locked (TVL) in DeFi is sitting at $93 billion, with Ethereum (excluding Layer 2s) accounting for about 57% of TVL..
This Week’s Headlines
- BlackRock to launch tokenized investment fund with Securitize
- Japan’s $1.5 trillion government fund GPIF is seeking information on bitcoin and other low-liquidity assets to diversify portfolio
- Fidelity amends spot Ethereum ETF to include staking
- Crypto-friendly Rep. French Hill seeks to lead the US House Financial Services Committee
- Utah judge denies SEC’s motion to dismiss DEBT Box case, imposes sanctions on the SEC
- SEC subpoenaed firms that dealt with the Ethereum Foundation, Fortune reports
- Vitalik Buterin highlights steps to combat centralization risks in Ethereum’s staking ecosystem
- New York gives regulatory green light to WisdomTree‘s blockchain-focused asset manager
- Crypto exchange Bakkt replaces CEO days after NYSE warns of delisting
- Grayscale Ethereum Trust discount drops to -20% as hope dwindles for spot ETF in May
- Worldcoin to end storing users’ personal data
- FTX CEO John Ray calls Sam Bankman-Fried’s zero-harm claim “reckless” and “false”
- Genesis Global Capital agrees to $21 million penalty, with bankruptcy claims to be paid first
- Luxor partners with Bitnomial to offer the US’s first-ever exchange-traded hashrate futures to help miners hedge their revenue
- Robinhood rolls out crypto wallet to Android users globally
- Starbucks shutting down Odyssey Beta NFT program
- Dogwifhat memecoin’s iconic photo sold as NFT for $4.3 million
Notable Deals and Fundraising
- Immutable, Polygon and King River team up to raise $100 million for Web3 gaming fund
- US fintech firm Figure launches new blockchain-focused entity Figure Markets after raising $60 million in Series A
- Zero-knowledge proofs startup Succinct Labs raises $55 million in a seed and Series A round led by Paradigm
- Shared-sequencing focused Espresso Systems raises $28 million in fresh funds, led by A16z Crypto
- Ethereum Layer 2 Morph raises $20 million from Dragonfly, Pantera and others
- Web 3.0 base layer Mystiko.Network raises $18 million seed round
- MANTRA Chain raises $11 million to build a network tailored to real-world assets
- Crypto compliance platform Keyring raises $6 million to unlock DeFi for institutions
- Web 3 startup Tensorplex Labs raises $3 million in seed funding to decentralize AI
- Decentralized social trading protocol Bi.social raises $3 million in funding
- Pallet Exchange raises $2.5 million to build an NFT platform on Sei
- Berachain’s crypto trade aggregator Ooga Booga raises $1 million
