Cryptoassets are facing their toughest headwinds in months. Bitcoin slipped this week under immense sell pressure from governments and additional looming supply from Mt. Gox, erasing all gains since February. The defunct crypto exchange moved 47,229 BTC (worth $2.6 billion at the time) ahead of a $9 billion payout to creditors. BTC dropped to below $54,000 likely amid liquidations from the German government. The weakness in BTC triggered a wave of cryptoasset liquidations amounting to roughly $650 million, resulting in 7-day drawdowns exceeding 25% for some assets such as Arbitrum (ARB) and Optimism (OP). The altcoin underperformance was also influenced by upcoming token unlocks which could lead to additional selling pressure. Meanwhile, signs of cooling in the US jobs market continue as the unemployment rate rose to 4.1% in June. Despite this, the US labor market added more jobs than expected last month. US stocks opened slightly higher following the report and appear set to end the week on a positive note.
Bitcoin could drop further in the coming weeks as billions of dollars of supply may be released to the market. The trustee of the defunct Mt. Gox exchange announced today that repayments to some designated crypto exchanges have started based on the rehabilitation plan. However, the timeline for creditors to receive bitcoin or bitcoin cash repayments varies significantly depending on custodians. Sustained sell pressure is also expected from the German and US governments which hold more than $2.3 billion and $12 billion in BTC, respectively, although the exact amount of BTC to be sold and the timeline remain unclear. On a positive note, the end of selling from Mt. Gox and Germany might signal a Bitcoin bottom.
From a Bitcoin mining perspective, the bottom could be near as miners show signs of capitulation. Apart from governments, Bitcoin miners have been the largest sellers in recent weeks. Bitcoin miner capitulation metrics are approaching the same levels seen at the market bottom following the FTX crash in late 2022. Daily miner revenue has dropped to $29 million from $79 million after the bitcoin halving earlier this year, and the hashrate has also fallen by almost 8% since the April event.
Market Overview
The global cryptoasset market capitalization currently amounts to roughly $2.15 trillion – down from $2.38 trillion last week, with bitcoin accounting for about 51%. Among the Top 30 cryptoassets by market cap, Tron (TRX) outperformed, gaining about 4% over the week. The price of bitcoin (BTC) fell by another 9% to $55,804 while the price of ether (ETH) decreased by 13.3% to $2,974. The total value locked (TVL) in DeFi is sitting at $85 billion (-10% wow), with Ethereum (excluding Layer 2s) accounting for about 61% of TVL. Arbitrum One is currently the largest Layer 2 by value locked, accounting for 40% of the $36 billion in assets.
This Week’s Headlines
- Sony gets ready to launch crypto exchange in Japan with acquired Amber platform
- US judge sides with CFTC, deems OHM and Klima commodities
- Silvergate Bank agrees to settle after SEC says the crypto-friendly bank made false statements about AML procedures
- Circle earns license to issue USDC and EURC under Europe’s MiCA regulatory framework
- Paxos receives approval from Singapore’s central bank to issue stablecoins, partners with DBS Bank
- Solana-based memecoin launchpad Pump.fun surpasses the Ethereum network in terms of daily revenue
- Robinhood plans to list crypto futures in the coming months
Notable Deals and Fundraising
- Bitcoin miner Genesis Digital Assets considers US IPO, Bloomberg reports
- Germany-based Bitcoin miner Northern Data mulls US IPO of AI unit as early as 2025, Bloomberg reports
- Indian crypto exchange CoinDCX acquires BitOasis as part of international expansion plan
- Consensys acquires Wallet Guard to help protect MetaMask users against hacks and scams
- Iris Energy raises $413 million to fund bitcoin mining expansion
- Solana-based GPU tokenization protocol Compute Labs raises pre-seed round at $30 million token valuation
- Bitcoin restaking protocol Lombard raises $16 million in a seed funding led by Polychain Capital
- Blockchain oracle RedStone raises $15 million Series A via token round
- Distributed cloud computing firm Prodia raises $15 million in seed funding led by Dragonfly Capital
- Pi Squared, building “Universal ZK Circuit”, raises $12.5 million in a seed round led by Polychain Capital
- Web3 AI firm OpenLedger raises $8 million in a seed round led by Polychain Capital and Borderless Capital
- Bitcoin scaling protocol QED raises $6 million seed round
- Web3 security firm Mamori raises $5 million in seed funding led by Blockchain Capital
- Web3 “Credibility Protocol” Ethos Network raises $1.75 million
- Pudgy Penguins parent firm Igloo Inc acquires Web3 creator-focused platform Frame
- Web3 investor DWF Labs launches $20 million fund to support promising projects in Chinese-speaking regions
