Bitcoin Price Uncertainty

This week, the digital asset class experienced a period of uncertainty with several major key events on the horizon. Investors remain unsure about the market's direction as these events unfold in the coming weeks. Bitcoin opened the week at $65,700, fluctuating to weekly lows of $63,240 and highs of $68,500 before settling at a current price of $65,870.

Mt Gox distributions returning hacked funds to customers from 10 years ago have been distributed this week facilitated through the exchange Kraken. It is unsure the exact amount credited so far to the 127,000 customers receiving 7 billion worth of Bitcoin, Bitcoin cash and cash.

Bitcoin Weekly Price Chart

Happy Ethereum ETF Launch Date

A significant milestone in the adoption of cryptocurrencies occurred today with Ethereum's ETF receiving final approval from the SEC on Tuesday and launching for trading on the US stock exchange occurring today. Many investors were uncertain about how Ethereum's price would react, speculating that this might be a "sell the news" event similar to the BTC ETF launch. Ethereum's price was at $3,540 at the US market's opening and saw a brief decline to $3,390, a 4% retracement. It has since climbed back to a current price of $3,490.

Ethereum's ETFs saw $1 billion in volume across the listed spot ETFs on opening day, 23% of what Bitcoin saw on its launch day, which is regarded as a very positive launch. Large outflow pressure came from Grayscale, with outflows of $484.9 million worth of Ethereum due to transferring their already owned ETH out of their ETH Trust, which has large fees. Grayscale’s new ETF will have greatly reduced fees, making it a more attractive option for investors. Grayscale still has a large amount of ETH expected to be transferred, which will maintain the outflow pressure over the coming weeks.

Despite this, the market reacted positively as Ethereum's price was able to absorb it and was minimally affected by the first large wave of outflows. Once past, we expect positive inflows to outweigh outflows in the near future, leading to positive price action for Ethereum. Apart from Grayscale, there was great demand for Bitwise’s fund, which had $204 million of inflows, along with Blackrock having $266.5 million worth of inflows.

Ethereum ETF Flow Table (US$m)

Ethereum is quite different from Bitcoin, and this could lead to unique responses to the launch of its ETF. Ethereum allows users to stake their tokens, which means locking them up to help secure the network and validate transactions, earning rewards in return. This staking process creates ongoing demand for Ethereum. Additionally, DeFi, a growing sector that aims to recreate traditional financial systems using blockchain technology, relies heavily on Ethereum. Many DeFi projects use Ethereum, driving significant demand for its token. Furthermore, Ethereum is integral in the NFT and GameFi (blockchain-based gaming) sector. Every time someone buys an NFT or engages in a blockchain-based game, they often use Ethereum, creating continuous demand for the token. Because of these factors, the launch of an Ethereum ETF could create unprecedented demand and drive its price higher.

Joe Biden Steps Down

On Monday, it was confirmed that Joe Biden is withdrawing his candidacy and will not seek re-election in November. This decision follows weeks of rumors and speculation both internally and externally, one notably from George Clooney, a major Democratic donor and one of Biden’s most prominent supporters. He recently commented, “In the last four years, Joe has won many of the battles he’s faced, but the one battle he cannot win is the fight against time”.

Bitcoin's immediate reaction was negative, sharply dropping 2.3% from $67,552 to $65,880, however quickly recovering. Many believed that Trump would have a landslide victory over Biden, therefore the market responded to the potential for a stronger candidate to compete against Trump, dropping his chance of presidency. This resulted in a brief but noticeable dip in Bitcoin's value as Bitcoins price can be correlated to his chance of winning in the coming months as his stance is pro adoption of Bitcoin and Crypto.

Many believed that Trump would have a landslide victory over Biden, so the market responded to the potential for a stronger candidate to compete against Trump, reducing his chances of winning the presidency. This led to a brief but noticeable dip in Bitcoin's value, as Bitcoin's price can be correlated going forward with Trump's chances of winning. His stance is pro-adoption of Bitcoin and crypto, which heavily influences market sentiment.

Bitcoin Conference 2024

Bitcoin's largest convention is set to take place this weekend in Nashville, Tennessee, with the entire crypto community eagerly anticipating Donald Trump's pro-crypto speech. Trump has publicly advocated for advancing cryptocurrency adoption and fostering its growth in the US. This speech presents an opportunity for Trump to elaborate on his strategies and opinions on Bitcoin, providing the public with a clearer understanding of his stance and future plans. This moment could be pivotal for BTC and is expected to make headlines worldwide.

There is great speculation that Trump may announce Bitcoin as a strategic reserve asset for the United States if he is elected in November. Bryan Courchesne, the founder and CEO of crypto asset manager firm DAIM, believes this is “definitely possible” but may not be without its challenges. Courchesne noted that the U.S. Department of Justice (DOJ) holds 200,000 Bitcoins, which can be "easily" transferred to the Treasury Department, "and start right there with $13 billion worth of Bitcoin on the balance sheet." The DOJ can be seen as a seller in the space, he said, but if the department shifts towards becoming "a long-term hodler," it could be a catalyst for pushing Bitcoin prices up.

Great speculation has surrounded Elon Musk’s potential attendance at the Bitcoin 2024 Conference. Elon has recently arrived in Tennessee and has been a loud supporter of Trump, with recent donations of $45 million per month to assist with his campaign. Musk’s company Tesla currently owns 9,750 Bitcoins, according to their latest balance sheet. On his platform X, formerly known as Twitter, Musk changed his profile picture to laser eyes, which commonly refers to showcasing a bullish outlook on the crypto market. Anticipation will continue to build, and if Musk does join Trump on stage, it could mark a notable moment for the cryptocurrency industry, blending high-profile support from both the tech and political arenas.

 Meme Coin Continues Dominance  

The clear front-running narrative this cycle has been the meme coin sector, which we believe will continue its strong performance. This past month, meme coins have again outperformed all other sectors, rising by 29%. In comparison, the next closest sectors, DeFi and Layer 1 (L1), have seen gains of approximately 12%.

According to CoinMarketCap, a leading website for crypto prices and information, meme coins accounted for 22.49% of total page views in their H1 report. This significant interest highlights the strength and influence of meme coins within the crypto market.

Bitcoin ETF Flows

BTC has continued to see large inflows indicating great demand for the asset from both investors and institutions. On the 19th and 22nd of July both days received over $400b of positive inflows. Today we saw an outlier negative day, most likely due to the launch of Ethereum ETFs taking the spotlight away.

Bitcoin ETF Flow Table (US$m)

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