Representations of cryptocurrency Bitcoin are seen in this illustration, August 10, 2022. REUTERS/Dado Ruvic/Illustration
Dado Ruvic | Reuters
It seems like bitcoin has a good setup for the new quarter, with major institutions signaling confidence in both the future of crypto and even in its U.S. regulators at the end of the month. Don’t get too carried away though – crypto is still part of the broader market, which remains in a challenging macro environment.
The third quarter is historically the weakest for bitcoin. The average third-quarter gain going back to 2014 is just 4.67%, according to CoinGecko, and it’s posted a positive third quarter for only four of the nine in its lifetime.
| Q1 | Q2 | Q3 | Q4 | |
|---|---|---|---|---|
| Average return | 6.88% | 36.47% | 4.67% | 93.38% |
| Number of positive periods | 4 of 10 | 6 of 9 | 4 of 9 | 6 of 10 |
Source: CoinGecko
Before the recent rush of applications to launch U.S. spot bitcoin ETFs injected new optimism in the crypto market, it was a frustrating second quarter for traders. Between the end of the banking crisis in May and the BlackRock bitcoin ETF filing on June 15, regulatory pressure weighed heavily on sentiment and bitcoin traded sideways. That lull could come back in the next three months as industry drivers wrestle with macro drivers.
“It’s clear that [the Fed] is not fully comfortable yet with the direction of headline inflation numbers,” Christopher Ferraro, president and chief investment officer of Galaxy Digital, told CNBC. “So while they pause rate hikes, they’re in no way yet committing to a permanent pause or even a rate decline.”
The Federal Reserve left interest rates unchanged at the conclusion of its June meeting, but said two more could be coming later this year. Some on Wall Street are anticipating the Fed will move in July and September. Powell has said the FOMC hasn’t decided if a new hike is likely to take place in July.
“You see every day disparate and sometimes orthogonal data points coming out around is the economy growing? Is it shrinking? Are we headed for recession, are we not?” Ferraro added. “It’s a very uncertain macro environment, which will make this not a one direction move for any asset class, let alone bitcoin.”
Cantor Fitzgerald’s Elliot Han said while bitcoin has finally reclaimed the $30,000 level, it failed to maintain it for several weeks as the macro challenges are “currently dampening upside for crypto.”
Beyond the macro backdrop, it’s clear developments in U.S. regulation and ETF applications will continue to be the main themes in the third quarter. The rush of efforts to get approval for a spot bitcoin ETF came at the height of the Securities and Exchange Commissions’ hostility toward crypto and many hope institutions like BlackRock, Fidelity and Invesco – which filed for a bitcoin ETF with Galaxy in June – can force some change. It could take a while, however.
“From a timing perspective, I think it’s largely unknown” when a decision on an ETF could come, Ferraro said. “But … all these institutions have real concerted efforts and likely would not have put the effort in motion now if there wasn’t a strong belief that the market and the regulators, in particular the SEC, were ready to allow regulated products.”
“Given all of the regulatory uncertainty and the court cases that are going on … it’s actually an opportune time for the regulators to allow regulated products into the market and help clear out some of the concern or lack of clarity,” he added.
While that uncertainty continues in the U.S., other parts of the world are taking a friendlier stance toward the industry. U.K. regulators have developed a “Regulatory Sandbox” to allow crypto companies to test new innovations, continental Europe has an established exchange-traded products market for crypto, and Hong Kong has been clear and vocal about its desire to become a crypto hub for the world.
“There’s still a disparity in the treatment of crypto in the U.S. and the rest of the world,” Han said. “The question is will the U.S. follow suit or continue with its litigious approach?”
There’s a growing number of U.S. companies that are no longer willing to wait for regulatory clarity as the price of bitcoin ticks higher, he added – and many are expecting a big price surge in the spring they won’t want to miss.
Bitcoin is up more than 80% YTD
“Some are looking to move their headquarters, or at the least establish large offices, in crypto friendly jurisdictions,” Han added. “One U.S. crypto company we know is now even seriously contemplating its public listing in London or Hong Kong and we’re also seeing more U.S. crypto companies looking to create offshore offerings” like Ripple and Coinbase.
While Ferraro and others remain upbeat about the future of crypto and unworried that regulators will eventually find an appropriate path forward for American crypto businesses, it could end up being too little too late.
“I am optimistic we will get it right,” Ferraro said. “I am fearful that the U.S. will take its time and while that happens, sticky capital and sticky intellectual capital gets formed elsewhere in the world, and then it’s hard to undo.”
Altcoins Tron, Avalanche and Toncoin were trading in the green and gained up to 1.2%.
Source: CoinMarketCap
Selling pressure in BTC has decreased amid heightened trading activity with majority of orders on exchanges being floated by buyers according to Taker Buy-Sell Ratio which is now above 1, Vikram Subburaj, CEO, Giottus Crypto Platform, said, adding that crypto’s Fear & Greed Index has rebounded to 40 after hitting a yearly low of 30 on Tuesday.
BTC surged to $62,322 supported by inflows of $31 million in US spot bitcoin ETFs, which offset recent outflows, Sathvik Vishwanath, Co-Founder & CEO, Unocoin said. The crypto market witnessed another session of volatility as BTC slipped below the $61,000 level due to heavy liquidations on defi platforms, Shivam Thakral, CEO of BuyUcoin observed. Citing data from Coinglass, Thakral said that Bitcoin spot ETFs saw an inflow of $31 million on Tuesday, ending a seven-day streak of outflows. “This shows that institutional buying is on the higher side. The bullish sentiment is expected to continue on Friday as bitcoin (BTC) options worth $6.68 billion and ether (ETH) options worth $3.5 billion are set to expire on the Deribit, a crypto derivatives exchange,” he opined.On the performance of other cryptos, Vishwanath of Unocoin highlighted BlackRock’s IBIT exceeding $1 billion in trading volume, signaling strong institutional interest.
On the outlook of BTC, he said that despite the positive trading, the ebbs and flows of the GBTC market were putting pressure on BTC. He sees resistance at $63,440 while support at $60,620. Technical indicators such as RSI at 45 and 50-day EMA at $61,960 suggest a cautious outlook below $62,510, he opined.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
(You can now subscribe to our ETMarkets WhatsApp channel)
The U.S. State Department on Wednesday announced a $5 million reward for information leading to the arrest or conviction of alleged cryptocurrency fraudster Ruja Ignatova. Photo by the FBI
June 26 (UPI) — The U.S. State Department is offering a $5 million reward for information that leads to the arrest or conviction of alleged cryptocurrency fraudster Ruja Ignatova.
The State Department announced the reward in an online news release and describes Ignatova, 42, as a participant in “one of the largest global fraud schemes in history.”
The so-called “cryptoqueen” is on the FBI’s Ten Most Wanted Fugitives list and is accused of participating in a global cryptocurrency fraud scheme.
Federal investigators say Ignatova co-founded OneCoinLtd. while living in Bulgaria in 2014.
Since then, Ignatova and her cohorts allegedly defrauded investors by making false statements about OneCoin’s value as a cryptocurrency.
Federal investigators say Ignatova and others defrauded investors of $4 billion by 2017.
The U.S. Court for the Southern District of New York on Oct. 12, 2017, indicted Ignatova and charged her with conspiracy to commit wire fraud, wire fraud and conspiracy to commit money laundering.
Federal investigators says Ignatova left Sofia, Bulgaria, for Athens, Greece, to evade arrest two weeks after the federal indictment in New York.
She has been a fugitive since then.
The federal court in February 2018 issued a superseding indictment charging Ignatova with conspiracy to commit securities fraud and securities fraud, in addition to the other federal charges against her.
Prosecutors in Germany also have charged Ignatova with crimes related to the alleged fraud scheme.
The FBI added her to its most wanted list in 2022 and is offering a $100,000 reward for information leading to her arrest.
Fancy Dance (2024) – Movie Review
Read the Ruling by the Virginia Court of Appeals
John Kerry used government email alias as secretary of state, whistleblowers say
NYC pastor is sentenced to 9 years for fraud, including taking a single mom's $90,000
Trump targets House Freedom Caucus chair in intra-party Republican primary feud
Tracking a Single Day at the National Domestic Violence Hotline
World's largest arms expo in Paris marred by ongoing conflicts
George Strait sets a new record for the largest ticketed concert in U.S. history
