The weeks follow each other and are similar for bitcoin. The long weekend (Monday was a public holiday in the United States) was particularly difficult for the crypto, with its price dropping to $17,600, dropping below $20,000 for the first time since December 2020. The price has recovered more than 20% in parallel with a bullish day in US stock markets yesterday. While the latter are back in the red today (at the time of writing these lines), bitcoin is resuming its battle to stay above $20,000.
As is often the case in this time when inflation is the central economic theme, markets today eagerly await the words of Fed Chair Jerome Powell. The latter heads to Capitol Hill for his semi-annual congressional testimony just days after overseeing the largest rate hike since 1994. He will testify before the Senate Banking Committee on Wednesday and before the House Financial Services Committee on Thursday. Powell has so far received political support from two parties. Will the current difficult economic context cause cracks in this veil of confidence? The answer will come in the coming days.
After freezing withdrawals, transactions and transfers between accounts ten days ago, the Celsius network’s troubles are far from over. In an update to investors on Sunday, the New Jersey company reiterated its “ongoing goal to stabilize liquidity and operations.” They add that “this process will take time”. Celsius said it was “having an open dialogue with regulators and officials” and was looking for “a solution”. Celsius lead investor BnkToTheFuture, meanwhile, has offered to help the company by rolling out a “financial innovation” similar to the one once used to store cryptocurrency exchange Bitfinex. “I believe mainstream funding will not have a timely fix for Celsius, as we have seen in the past with the Gox mountain still unresolved 10 years later,” Simon Dixon, CEO of BnkToTheFuture, wrote in a blog post.
Bitfinex had started issuing new tokens in May 2019 to raise $1 billion, selling the new token in exchange for Tether (USDT) to replace $850 million the exchange had lost to Panama-based Crypto Capital bank. Dixon says, “It was resolved within 9 months and worked really well for depositors.” Dixon said he would not reveal specific details of the proposed recovery plan “until Alex and the Celsius board are ready”, adding that “my role is to come up with solutions as we have experience, licenses and technology to do this.” to do”. Anyway, nothing to improve the sleep of investors who have frozen their savings on the short term platform.
Following the implosion of LUNA and its stablecoin UST that led to the disappearance of tens of billions of dollars in value, Do Kwon and Terraform Labs are now faced with a class action lawsuit. Plaintiff Nick Patterson alleges, among other things, that Terra tokens were sold as “unregistered securities” and that “defendants have made a series of false and misleading statements regarding the most important digital assets in the Terra ecosystem. In terms of market cap, UST and LUNA, to entice investors to buy these digital assets at high rates.”
Following this saga, that of the UST algorithmic stablecoin, it is predictable that investors will follow the evolution of projects with similar value propositions. One, although much less broad in capitalization, is Tron’s USDD. However, after trading below the dollar for nearly ten days, stable currency van Tron has yet to regain parity with the dollar. It is trading around $0.97.
Indicators that we are bottoming out in the cryptocurrency markets are mounting. US fund GBTC’s discount hits an all-time low as the SEC’s ruling on a true bitcoin-based exchange-traded fund approaches. the Grayscale Bitcoin Trustcontinues to trade at a discount as the July deadline for its Bitcoin ETF filing with the SEC draws closer. Since GBTC is subject to a six-month lock-up period, holders are at a loss as they can only cash out their money by selling their GBTC shares. When it was made, it was quite a significant bounty manifested. You can see the evolution of this review here:
If there is interest, rest assured that a financial company will try to cash in on it. ProShares just launched the first bitcoin short-selling ETF. The BITI gives investors the opportunity to “potentially profit from or hedge their cryptocurrency holdings” in the event of a price drop.
Those reading this in 2018 will remember our discussions of Bitcoin futures delinquent during this big bear market. This rare situation is back as futures contracts trade below the spot market price. These fixed month contracts typically trade at a small premium in the markets place, as investors demand more money to withhold the settlement. This situation is not exclusive to cryptocurrency markets. Therefore, futures contracts should trade in healthy markets at an annual premium of 5-12%. However, the annualized premium for 3-month bitcoin futures is now negative.
As Quebec analyst Jonathan Hamel recently noted, these sharp declines in bitcoin are commonplace rather than the exception. The latter shared this chart, showing that we are now in the previous thresholds of pullbacks from the highs reached for each cycle. With the bottom reached over the weekend, bitcoin fell 72%.
A surprising stat from Glassnode data, when on June 20, 56.2% of wallet addresses in the chain still had a higher value in US dollars than when they were created. In short, more than half of the addresses remain in the profitability zone.
Citibank has estimated a nearly 50% chance that the global economy will experience a recession in the near future as central banks “tighten monetary policy and demand for goods weaken”. The future of cryptocurrencies will likely be tied to these macroeconomic trends. Still, it is impossible to note that historically, the current zone relative to the highs has always proved very profitable in the medium and long term.
Rivemont’s crypto fund will have a cash position of approximately 50%.
This article is brought to you by Fonds Rivemont. The Rivemont crypto fund is the first and only actively managed cryptocurrency fund in Canada. RRSP and TFSA are eligible. Accredited investors can learn more here†
Disclaimer: This column does not necessarily reflect the views of CryptonewsFR and does not constitute investment advice or instructions to trade.†
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