The collapse of the crypto market, crypto exchange IPOs and…

The collapse of the crypto market, crypto exchange IPOs and… post thumbnail image

Cryptocurrency market review in June.

SUMMARY

  • Cryptocurrency capitalization and trading volume on exchanges fell in June. Bitcoin lost 10% of its value, and Dogecoin lost nearly 30%, even though the token was listed on Coinbase.

  • In the next few years, two cryptocurrency exchanges, Kraken and Tokocrypto, are planning to go public. In April, Coinbase was immediately listed on Nasdaq, and has fallen 30% since the time of listing.

  • The hashrate of the bitcoin network is near an annual low, which could be affected by pressure from Chinese authorities on miners and the industry as a whole. However, it is possible to trade cryptocurrencies in the country.

  • South Korean citizens and companies will be required to report large foreign cryptocurrency accounts starting in 2023. American regulators, in turn, invite other countries to exchange information on foreign accounts and transactions to control taxation.

  • Institutions see potential in Ethereum. BankProv will issue loans secured by a second cryptocurrency, and Goldman Sachs plans to offer derivatives to its clients based on tokens. The investment bank is also using the Ethereum network to sell the first tokenized government bonds.

Market dynamics

Cryptocurrency cap for the month (05.24-24.06) is down 15% and to $1.35 trillion, according to CoinMarketCap. Bitcoin lost less than market value, its price fell by only 10%.

Cryptocurrency market cap. Source: TradingView

Altcoins are also falling in demand. Dogecoin showed a 29% drop in June, despite the fact that earlier in the month the largest cryptocurrency exchange Coinbase launched token trading on its site. Additionally, the developers of the Loopring Layer 2 scaling protocol have announced the launch of DOGE on Ethereum. This can have a positive effect on network bandwidth.

About why Dogecoin became popular – in Bloomchain material.

Crypto currency exchange

Trading volume on exchanges decreases along with the capitalization of cryptocurrencies. On June 24, the figure was less than a month short of even half of May volume and totaled $980 billion.

Total trading volume on cryptocurrency exchanges. Source: Blok

Cryptocurrency exchanges are expanding the geography of their presence. Coinbase has accepted registrations in Japan and will now be offering five assets to local users: bitcoin, Bitcoin Cash, Ethereum, Stellar Lumen, and Litecoin. Crypto exchanges Kraken, Bitfinex and KuCoin are considering entering the Indian market despite negative sentiment from local lawmakers. Although the document banning cryptocurrency in the country was never submitted for consideration, so as not to damage the economy.

Kraken plans to go public in 1-1.5 years. The founder of cryptocurrency exchange Jesse Powell announced an IPO instead of an outright listing. According to him, the company was driven by the experience of Coinbase, whose share value dropped after the placement. According to Powell, the reason is because there is no lock-up period which is not regulated in the direct listing procedure, but is mandatory for an IPO. Trading volume on Kraken in May was half that of Coinbase, according to Cryptocompare. Another exchange, Tokocrypto Indonesia, is also looking to make an initial public offering in 2-3 years. Binance has a controlling stake in the company.

Trading volume on selected cryptocurrency exchanges. Source: Cryptocompare

Regulation

United States of America

Following the introduction of new rules for filing tax returns for crypto market participants, American regulators are proposing to introduce data exchange between countries to fully and timely control tax payments. US cryptocurrency institutions must transfer information about foreigners’ accounts and transactions to tax authorities, and the government will share this information with other country’s authorities.

In the midst of the fight against cybercrime, the IRS is concerned about the illegal trading of cryptocurrencies using Telegram. The agency believes that the envoy was promoting the conclusion of an over-the-counter transaction that could potentially be linked to a criminal transaction. In addition, the White House is considering the possibility of tracking cryptocurrency transactions as part of the fight against the ransomware virus.

China

Amid tightening restrictions on the crypto industry in China, Miami authorities are urging local miners to move to America. Currently, the bitcoin network hashrate is close to a one-year minimum, but has not yet reached it. Also, China’s largest cloud provider, Alibaba Cloud, has warned about a possible service outage for cryptocurrency and mining companies.

Bitcoin network hash rate. Source: Blockchain.com

However, tightening mining regulations did not lead to a decrease in China’s mining pool share. Five of them occupied about 65% of bitcoin mining capacity over the past month and about 61% – throughout the year.

Distribution of hashrate by miners. Source: BTC.com

Despite the negative attitude of the Chinese authorities towards cryptocurrencies, trading in them is legal. The regulator warns about the risks of trading crypto, but gives citizens the right to buy and sell at their own peril and risk.

South Korea

South Korea has also tightened its oversight of the cryptocurrency industry. Starting in 2023, individuals and legal entities are required to report foreign accounts in cryptocurrency if the amount of their monthly balance exceeds $450 thousand. Violators will face fines or criminal liability.

Recently, Korean authorities confiscated $47 million worth of cryptocurrency from citizens in the form of unpaid taxes. Local exchanges are used to hide assets, as they do not collect data about account holders.

Several cryptocurrency exchanges in Korea have suspended trading in some assets with an increased level of risk. For example, Huobi has suspended trading of its own token, the Huobi Token. During the month, assets were down nearly 40%.

Huobi Token Price. Source: CoinMarketCap

Institutional

Digital bank Anchorage launches Ethereum-backed loans. Funding for the partnership will be provided by US bank BankProv with a two-century history. In 2020, the Anchorage team is already offering a similar product, then bitcoin acts as collateral, and Silvergate Bank acts as partner.

Silvergate Bank is currently ending a six-month partnership with Binance. Banks will no longer accept USD deposits from cryptocurrency exchanges and withdrawals via SWIFT.

Goldman Sachs sees potential in Ethereum and plans to offer options and futures contracts to its clients based on the second largest cryptocurrency by capitalization. Also this month, the investment bank sold its first tokenized US Treasury bond. The main advantage of tokenization of securities is the transaction time, during the trial it was about three hours. This will facilitate access to intraday liquidity in repo transactions.

Swiss bank BBVA has started providing cryptocurrency trading and storage services for premium clients. It is not yet clear which cryptocurrencies will be available to users.

Blockchain Capital launches its fifth $300 million investment fund, in partnership with PayPal and Visa. The fund is interested in early-stage startups, including NFT and DeFi projects.

Investment firm Grayscale Investments has launched 13 new cryptocurrency trusts. Each is tied to a specific token, including Loopring. At the beginning of the year, the company announced 23 products, five of which have already appeared. However, the 13 new trusts were not part of the original plan. Thus, the market expects another 18 investment products.

Leave a Reply

Your email address will not be published.

Related Post