1. Market Wrap: Bitcoin Outperforms Top Cryptocurrencies in June
The outperformance came despite a negative month for the leading cryptocurrency by market cap.
Bitcoin traded lower on Wednesday as traders took profits into the June close. The world’s largest cryptocurrency is on track for a record second-quarter price drop of 41%, snapping a four-quarter winning streak that saw prices chart a sixfold rise to almost $65,000 in April.
The crypto sell-off over the past quarter was triggered by regulatory crackdowns, concerns about tighter monetary policy, environmental issues and a slowdown in institutional demand. Selling stabilized in June, leaving bitcoin in a tight range of between $30,000 and $40,000.
Bitcoin was trading at around $34,000 at press time and is down about 4% over the past 24 hours.
“Price swings reinforce the idea that volatility is a fundamental part of a nascent and expanding market,” Steve Elrich, CEO of crypto exchange Voyager Digital. “Investors are still buying the dip.”
Latest prices
Cryptocurrencies:
Bitcoin (BTC) $34962.8, -3.92%
Ether (ETH) $2274.5, +2.31%
Traditional markets:
S&P 500: 4300.4, +0.2%
Gold: $1769.5, +0.5%
10-year Treasury yield closed at 1.458%, compared with 1.473% on Tuesday
Relative performance in June
Bitcoin outperformed other large market-cap cryptocurrencies in June with a decline of 2.7%, versus declines of more than 30% in XRP, EOS and LINK.
2. BlockFi Rate Cut on Bitcoin Deposits Leaves Rivals Scratching Heads
The decision was made based on “changing market conditions.”
Crypto lending platform BlockFi is cutting interest rates on a number of crypto asset deposits, just about three months after the company lowered rates in March.
BlockFi says its decision was made based on the changing market dynamics and borrowing demand from institutional investors.
But unlike the last time, other leading top crypto lending desks such as Genesis and Canada-based Ledn are not following BlockFi’s lead move, at least for bitcoin (BTC, -3.66%) deposits. Some of the executives at the firms are seeing increased borrowing demand compared with the previous quarter, so they need to attract the deposits to lend them out.
BlockFi announced June 25 the lower interest rates on deposits of crypto including bitcoin, ether (ETH, +2.54%), chainlink (LINK, -2.47%), litecoin (LTC, -2.07%) and a few others will go into effect July 1. The annual percentage yield (APY) for bitcoin deposits larger than 20 BTC, for example, will go down to 0.25% from 0.5%.
BlockFi, in the announcement, said the decision was made due to “shifting market conditions.”
3. Soros Fund Management Is Said to Be Trading Bitcoin
The approval to trade the leading cryptocurrency was given by CIO Dawn Fitzpatrick, according to the report.
Soros Fund Management has cleared its traders to actively trade bitcoin (BTC, -2.51%), TheStreet reported, citing two people with knowledge of the matter.
The approval to trade the leading cryptocurrency was given by CIO Dawn Fitzpatrick, TheStreet said.
4. Cryptocurrencies Are on FinCEN’s First ‘National Priorities’ List
The financial surveillance agency is pointing a finger at crypto in its new plan to combat terrorism financing.
The U.S. Financial Crimes Enforcement Network (FinCEN), an agency of the Treasury Department tasked with preventing and punishing money laundering and other financial crimes, has turned its attention to crypto.
In the agency’s first list of government-wide priorities published Wednesday, FinCEN identified eight priorities: corruption, cybercrime and relevant virtual currency considerations, terrorist financing, fraud, transnational criminal organization activity, drug trafficking, human trafficking and proliferation financing.
So far, the agency’s list of priorities is not connected to any policies. According to FinCEN’s statement, the agency “will issue regulations at a later date that will specify how financial institutions should incorporate these Priorities into their risk-based AML [anti-money laundering] programs.”
5. China Crypto Crackdown: Calendar Offers Clue as to ‘Why Now?’
Crypto crackdowns tend to intensify amid politically sensitive times in China.
China recently cracked down on bitcoin (BTC, -4.16%), again. The question is: Why now?
The calendar may provide a clue. Thursday is July 1, the 100th anniversary of the Chinese Communist Party. It is at least plausible that Chinese authorities would send a strong warning to the crypto industry in the weeks leading up to this big day.
This theory is already circulating around Chinese crypto circles, at least privately. But those familiar with China will recognize the tense solemnity that leads up to these kinds of events, which may be accompanied by crackdowns on activity that the government views as a threat to shehui wending, or social stability. Cryptocurrency appears to fit into that category.
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ZBG Team
July 1st, 2021
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