Weekly Pulse #14: June 3rd – 9th

Mark Vermeulen, 4 min read
Last Updated: 10 June, 2024

Weekly Crypto Market Recap

The cryptocurrency market has experienced an eventful week, with notable developments and price movements across various digital assets. In this recap, we will delve into the key highlights, including VanEck’s bullish stance on Ethereum, Bitcoin’s price analysis, and the potential acquisition of Bitstamp by Robinhood.

VanEck’s Bullish Outlook on Ethereum

Investment management firm VanEck has once again expressed its optimism towards Ethereum, the second-largest cryptocurrency by market capitalization. In their latest report, VanEck has revised their Ethereum price predictions for 2030, citing the recent approval of ETFs as a major catalyst.

Updated Price Targets

VanEck’s updated price targets for Ethereum in 2030 are as follows:

  • Base Case: $22,000
  • Bull Case: $154,000

These projections represent a significant increase from their previous estimates, indicating a growing confidence in Ethereum’s long-term potential. VanEck believes that achieving the base case price target would require a total return of 487% from the current ETH price, with a compound annual growth rate (CAGR) of 37.8%.

Valuation Methodology

To arrive at these price targets, VanEck employs a valuation methodology that estimates Ethereum’s cash flows for the year ending April 30, 2030. They project Ethereum’s revenues, deduct applicable taxes and validator revenue cuts, and calculate a cash flow figure. This figure is then used to determine the fully diluted valuation in 2030, which is discounted back to the present day at a rate of 12%.

Ethereum’s Potential

VanEck draws comparisons between Ethereum and Nvidia, highlighting their similarities in providing the infrastructure for groundbreaking technologies. Just as Nvidia enables the growth of AI, Ethereum serves as the platform for the development of new applications and protocols in the Web3 ecosystem. This analogy underscores the immense potential of Ethereum to become one of the most valuable assets of all time.

Bitcoin Price Analysis

Bitcoin, the flagship cryptocurrency, continues to trade within a stable range, showing signs of strength and potential for further upside.

Technical Outlook

On the daily chart, Bitcoin is trading in the upper half of its range, targeting the recent all-time high. The presence of squeeze shading indicates the possibility of a strong breakout if accompanied by significant volume. A decisive move above the $74,000 level could open the doors for Bitcoin to explore uncharted territory.

Altcoin Spotlight: INJ/USDT

Among the altcoins, INJ/USDT has caught the attention of traders and investors. The token has been consolidating sideways, with resistance at $29.85. A close above this level could confirm a breakout and pave the way for INJ to revisit its all-time high around $53.

Robinhood’s Acquisition of Bitstamp

In a significant development, Robinhood announced its intention to acquire Bitstamp, one of the oldest cryptocurrency exchanges, in a potential $200 million deal.

Expanding Crypto Offerings

The acquisition aims to bolster Robinhood’s presence in the cryptocurrency market and expand its offerings to a broader investor base. By integrating Bitstamp’s retail and institutional customers across various regions, including the EU, UK, U.S., and Asia, Robinhood seeks to strengthen its position in the crypto space.
Commitment to Crypto Despite the ongoing legal challenges with the SEC, Robinhood’s move to acquire Bitstamp demonstrates its unwavering commitment to the cryptocurrency industry. The acquisition signifies Robinhood’s anticipation of continued high demand for crypto-related services and its determination to capitalize on the growing market.

Legacy Markets

Jobs Report

The U.S. economy exceeded expectations by adding 272,000 jobs in May, marking a robust labor market. However, the unemployment rate edged up to 4% for the first time since January 2022. Employment growth was strong in healthcare, government, and hospitality. Average hourly earnings also topped projections, climbing 0.4% month-over-month and 4.1% year-over-year. This positive jobs data reduces the likelihood of an imminent Fed rate cut, causing stocks to decline and Treasury yields to surge on Friday.

New S&P 500 Additions

CrowdStrike Holdings, KKR, and GoDaddy will join the S&P 500, replacing Robert Half, Comerica, and Illumina. The announcement after Friday’s close sparked an after-hours rally for the incoming stocks. CrowdStrike jumped 5.1%, KKR climbed 6.7%, and GoDaddy increased 3.3%. The index changes take effect June 24.

GSK’s RSV Vaccine Advances

GSK’s RSV vaccine candidate, Arexvy, gained FDA approval for adults 50-59 at high risk for RSV, expanding its potential reach ahead of rivals. Ongoing regulatory reviews in Europe, Japan and beyond could further broaden its accessible market.

Nvidia Stock Split Finalized

Nvidia completed its 10-1 stock split this week. The adjusted share price takes effect June 10 after closing at $1,208 on June 7 pre-split. The tech giant saw its valuation briefly surpass Apple’s last week to become the world’s second largest company by market capitalization behind Microsoft.

GameStop Volatility Resurges

GameStop shares plunged nearly 40% Friday amid high volatility as the video game retailer announced plans to sell millions of new shares. A YouTube stream by former GameStop booster “Roaring Kitty” drew over 500,000 live viewers. The stock has faced selling pressure following disappointing quarterly earnings.

Gold Pulls Back on Dollar Strength

Gold prices hit a five-week low Friday, weighed down by a surging dollar and halted Chinese buying. A Bloomberg report that China paused gold purchases triggered heavy selling, pushing gold down $20 per ounce in minutes. Robust U.S. jobs numbers lifted the dollar, adding downward pressure.

Nasdaq Hits New Peak

The Nasdaq 100 index reached a new record high last week, led by Nvidia and other tech giants. While the long-term outlook remains positive, some see opportunities for buying on short-term dips. However, concentration risk persists with tech’s market dominance.

Copper Drops on Stronger Dollar

London copper prices hit a four-week low Friday following a spike in the U.S. dollar after the upbeat jobs report. Three-month copper on the LME shed 3.1% to $9,837 per ton, marking its lowest level since May 8. The dollar’s gains make commodities like copper costlier for non-dollar buyers.

Earnings Ahead

Oracle, Broadcom and Adobe report earnings next week. Oracle anticipates outpacing consensus estimates on Tuesday. Broadcom’s stock has soared amid the AI boom, with expectations of significant earnings growth on Wednesday. Adobe faces pressure when it reports Thursday following AI competition concerns raised after its text-to-video generator announcement.

Events on the Horizon

The Federal Reserve’s policy meeting next week is expected to reinforce a hawkish outlook, contrasting rising hopes for rate cuts. Apple’s WWDC event looks to showcase AI advancements, with monetization opportunities. Tesla’s shareholder meeting has executive compensation and Texas HQ plans on the agenda.

Mark Vermeulen

A native of the Netherlands with a degree in finance, Mark has emerged as an avid crypto enthusiast and expert. His dedication to blockchain technology and bitcoin adoption has made him the driving force behind the Dutch content of Ecoinomy. Mark's adventure began during college, where his passion for decentralized finance quickly caught his eye. His ability to simplify complex concepts around crypto has earned him prestige among Dutch investors and far beyond.