Crypto Market Update

BTC is up 5% since market close on Friday, hovering just above $63k, while ETH -2.81% is lagging, currently trading below $3500. This ETH underperformance further supports the idea that market expectations for the ETH -2.81% ETFs are relatively muted. Meanwhile SOL -0.12% is nearly back to the level it traded at on Thursday following VanEck’s application to list a SOL -0.12% ETF, now trading around $148. While we have yet to see volumes or a Coinbase premium return, the BTC 0.42% ETFs have quietly racked up four consecutive days of aggregate net inflows, bringing the 5-day moving average close to positive territory. The big piece of data this morning was the ISM manufacturing PMI, which came in at 48.5, below the expected 49.1, providing additional support that the economy is slowing. Importantly, the prices paid component of the PMI report came in at 52.1, well below the consensus forecast of 55.9, a good sign for inflation. Despite the soft economic data, rates are higher on the day, with the US 10Y moving back toward 4.5%. Meanwhile, the DXY demonstrated some whipsaw price action around the PMI release and is now slightly higher on the day. Major equity indices are in the green, with tech leading the way higher once again. Despite it being a holiday week, it will certainly be a consequential one, with more significant macro data released tomorrow in the form of JOLTS numbers. Perhaps more importantly, Fed Chair Powell is scheduled to speak as well.

ETH ETF Launch Likely Delayed Until Next Week

While we had anticipated the ETH ETFs to go live by the 4th, it appears we will have to wait until at least next week. According to a report, the SEC has returned the S-1 forms to prospective Ethereum ETF issuers with minor comments, requesting revisions and a refile by July 8th. This iterative process means issuers must go through at least one more round of filings before the ETFs can begin trading. The S-1 forms are the second step in the approval process, following the approval of 19b-4 forms in May.

MiCA Goes into Effect, Circle Capitalizes

Circle has become the first global stablecoin issuer to be licensed and approved under the European Union’s Markets in Crypto Assets (MiCA) regulatory framework, effective July 1st. This approval allows Circle to issue its stablecoins, USDC -0.04% and EURC -0.23% , within the EU, marking a significant step in its compliance efforts. Circle had previously secured a digital asset regulatory license in France and established a French entity to manage its MiCA-compliant operations. MiCA, which aims to standardize crypto regulations across EU member states, requires increased regulatory compliance for stablecoin issuers, with full adherence expected by the end of the year. However, there are ongoing concerns and confusion regarding MiCA’s implementation and its impact on stablecoin issuers, as expressed by industry leaders like Tether CEO Paolo Ardoino. As of today, USDT still commands a remarkable 70% of the total stablecoin market cap, ahead of USDC in second place at 20%.

Technical Strategy

Ethereum Name Service has successfully broken out above the highs of a five-month technical base that had been building since January of this year. The act of ENS -3.16% rising back above $28 was thought to represent a breakout of the minor one-month triangle pattern, but has rapidly led ENS to surpass the highs of this recent consolidation which lies near $29.75.  This is a bullish technical development and bodes well for the possibility of additional near-term gains.  Price has now reached the highest levels since early 2022 and has resistance near $40, and then $49.73, representing the peak from late 2021.  Volume has been rising since May when ENS started to show better technical strength and this recent breakout looks quite attractive technically based on the bullish resolution of this pattern since early this year.

Daily Important Metrics Crypto Size Bullish signal is tied to the crypto market growing Market cap 2.31T +$41B (1.80%) BTC Dominance 53.50 % (0.05%) Stablecoins Increase in circulating stablecoins is a Bullish signal In Circulation +$113B (-0.03%) In Exchanges +$19B (-0.14%) BTC Metrics A decrease in Bitcoin on exchanges is bullish, indicates investors are moving coins to cold storage # BTC Exchanges +$3.0M (0.02%) Funding Rates Positive funding rates indicate traders are Bullish Aggregate +0.9024 (0.3765) Binance +0.9033 (-0.0957) Bitfinex -0.0157 (-1.5628) Bitmex +1.6685 (0.5488) ByBit +0.0369 (0.2438) Deribit +1.1083 (0.1167) Huobi +1.0284 (1.0284) Kraken +2.4557 (1.2730) Mean +0.9024 (0.3765) OKex +0.3768 (0.4964) Sentiment BMI : 22 (100.00%) Futures A positive spread between Futures Prices and Spot Prices is Bullish CME Price $62,970 (4.38%) Spot Basis +$166 (0.26%) Volume 360,135 (80.72%) Open Interest 300,694 (1.54%) Options all exchanges Higher open interest change in a bull market is bullish for the sector Volume 9,630 (37.05%) Open Interest 181,428 (-0.30%) Vol. Put/Call Ratio 0.5903 (43.87%) OOI Put/Call Ratio 0.4677 (1.43%) All metrics as of 2024-07-01 12:00:22 All Funding rates are in bps Crypto Prices Symbol Market Cap Last Price Daily Change Year to Date Relative to BTC YTD BTC $1.24T $63,027 2.44% 49.23% ETH $416B $3,459 1.99% 52.02% 1.87% SOL $68B $147 2.96% 44.86% -2.93% DOGE $870,604 $0.0009 -14.49% -99.02% -99.34% All prices as of 2024-07-01 13:14:08 Exchange Traded Products (ETPs) Symbol Prem. to Nav Last Price Daily Change Year to Date Relative to BTC YTD BITW -32.38% $34 0.30% 45.79% -2.30% ETHE -1.45% $32 2.74% 66.37% 11.49% News Quick Bits The Block German government moves additional $94 million worth of bitcoin to exchanges The U.S. and German governments both made a large amount of crypto transactions today following similar moves last week. The Block Bitfinex Securities to launch two new tokenized bonds on Liquid Network The tokenized bonds target raising up to $10 million in USDT as part of an ongoing issuance program with Mikro Kapital. CoinDesk Metaplanet Buys Another $1.2M Worth of Bitcoin as Investment Strategy Progresses The Japanese investment adviser said it acquired more than 20.2 BTC. Regulation The Block IRS finalizes controversial tax reporting rule for brokers, punts decision on DeFi Crypto lobbyists feared ambiguous language in earlier drafts would harmfully impact many parts of the crypto industry. The Block Judge upholds ‘bulk’ of SEC case against Binance but nixes secondary sales charge, among others Pro-crypto lawyers are celebrating a judge's dismissal of the secondary sales charge against Binance, though CZ may be in yet more hot water. Fundraising and M&A The Block Pudgy Penguins parent firm Igloo Inc acquires Frame The Frame team will join Igloo in developing Abstract Chain, a layer-2 network designed for consumer crypto experiences. CoinDesk Sony Buys Amber's Japan Unit to Enter the Crypto Market: Reports Last year, Bloomberg had reported that Amber was planning to sell its Japanese unit. Product Updates and Partnerships The Block Farcaster is getting in-app USDC payments Warpcast, the open social media platform, has steadily gained traction due to the release of new crypto-native features.