Market Update

The digital asset class experienced significant volatility this week, with Bitcoin surging to $63.5k before dropping below $58k, which triggered over $320 million in liquidations. It has mostly traded within our target range of $61-64k, as we have mentioned in the last couple of weeks, nearing $64k before pulling back. Another retest of this range could trigger a breakout above $64k as the market clears out short liquidations.

Furthermore, the global crypto market capitalisation is approaching its lowest point since February 27th, over four months ago. Currently valued at $2.27 trillion, Bitcoin contributes approximately $1.17 trillion to this total. Bitcoin's market dominance is on the rise, climbing to 51.4% from 50.4% this week, as we saw another significant decrease in altcoin performance. Considering these indicators, we believe this could present investors with great buying opportunities whilst the remainder of the market are fearful.

Bitcoin Weekly Price Chart

US and German Government Selloff

The US and German governments have sent $738 million in Bitcoin to exchanges in the last two weeks, with Germany responsible for three-quarters of this amount. These moves are part of liquidation efforts, marking Germany's first-ever transferal its stash of seized Bitcoin. The US, which used to sell Bitcoin at auction, now does so on Coinbase, hence we can see the transfer to the exchange itself. The implications of these sales on market prices are usually negative, as such large amounts of sell pressure can result in a decrease in asset price and increased fear among other investors.

However, historically, the USA has struggled with timing the market effectively when liquidating their Bitcoin holdings. As shown below, there are several instances where Bitcoin was sent to exchanges by the US government, followed by substantial price increases.

Solana ETF Application

The recent filing by VanEck for a Solana ETF in the US, announced last Thursday morning, caused SOL's price to spike by 8%, rising from $138 to $151. While the ETF's approval is still pending acceptance from the SEC, the premature news serves as a bullish indicator for the future of Solana and the broader cryptocurrency market. Following the launch of Ethereum's ETF next week, market focus is expected to shift to Solana and in healthy market conditions, we anticipate Solana to gain institutional interest.

Solana Weekly Price Chart

Biden Fit For Presidency?

A recent report from New York Times claimed that that President Joe Biden is weighing his future in the 2024 race. This came after the ongoing Democratic concerns about Biden's recent debate performance. However, White House press secretary Karine Jean-Pierre confirmed President Biden is "absolutely not" dropping out as the Democratic presidential nominee.

It is concerning seeing Biden's current condition as he has struggled in front of the media. This raises the question to whether Biden is mentally fit for presidency. After the article the Polymarket odds of Joe Biden, dropping out of the elections reached as high as 80% and is now sitting at 64% chance.

A new leader for the Democrats could be beneficial as Biden's chances of a second term look slim. Kamala Harris is the top alternative to replace U.S. President Joe Biden if he decides not to continue his reelection campaign. Her odds have since grown to 15%, which is above Biden's current odds of 13%.

Ethereum Catalyst

This week Ethereum has experienced large volatility, dropping from $3,436 to a current price of $3,232, a decline of 6.31%. However with the imminent launch of Ethereum's ETF, we believe the increase of demand and buying pressure may trigger renewed bullish sentiment.

Ethereum spot ETF is expected to go live as soon as July 8th and therefore we believe this may be a catalyst in which Ethereum outperforms Bitcoin. With strong inflows into Ethereum ETFs we believe that there's great potential for Ethereum to lead the next move up and attract more institutional interest.

Ethereum: Total Supply

Above shows Ethereum's circulating supply, which has risen from 120.07 million to 120.19 million since April 1st, an increase of approximately 0.10%. This indicates that Ethereum has returned to an inflationary state. This shift occurs during periods of low network activity when the burn rate of Ethereum falls below the supply rewarded to stakers who validate the network. As a result, the supply inflates, making the token less scarce.

This second chart validates the decline in Ethereum activity since early April, with the 7-day moving average previously at 1.26 million transactions, now at 1.16 million. We believe that once Ethereum ETFs go live, Ethereum's ecosystem will gain significant traction, triggering higher network activity. Consequently, this will cause the token to become deflationary and more scarce once again, which is likely to drive its price higher.

Crypto Saved Julian Assange

The Bitcoin community has come to Wikileaks co-founder Julian Assange rescue, allowing him a safe and debt free escape to freedom in Australia. Assange reached a deal with the US authorities after 5 years of imprisonment, pleading guilty in exchange for extradition. Wikileaks aligns with similar values to those of Bitcoin holders as Wiki enables free information exchange and Bitcoin enables free value exchange. Both fighting against censorship. Anonymous bitcoin donors rallied in his support and covered his private jet escape ride worth just over 500k.

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