Weekly Pulse #15: June 10th – 16th

Mark Vermeulen, 4 min read
Last Updated: 17 June, 2024

weekly pulse #3

Crypto market

Introduction

he past week in the cryptocurrency market has been filled with notable developments, from Donald Trump’s endorsement of Bitcoin mining to the anticipation surrounding the launch of Ethereum (ETH) exchange-traded funds (ETFs). Meanwhile, Curve Finance faced a significant setback, and MicroStrategy continued to double down on its Bitcoin investment strategy. Let’s dive into the details of these events and their potential impact on the market.

Trump’s Endorsement Boosts Bitcoin Mining Industry

In a surprising turn of events, former U.S. President Donald Trump met with prominent figures in the Bitcoin mining industry, including representatives from CleanSpark, Riot Platforms, Marathon Digital, and Fidelity. Trump’s positive statements about the sector have been met with enthusiasm from key figures in attendance, who expressed their support for his backing of the industry. This endorsement could potentially drive further growth and investment in Bitcoin mining, as it gains recognition from high-profile individuals.

Ethereum ETFs: A Guessing Game of Launch Dates

The launch of Ethereum ETFs has been a topic of much speculation, with varying predictions on when they might become available. While some analysts initially predicted a launch by the end of June, SEC Chair Gary Gensler’s comments at a Senate Banking Committee hearing on June 13 suggested that approvals could take months. However, the consensus has since shifted, with some now predicting a launch as early as July 2nd. The streamlined process, thanks to lessons learned from Bitcoin ETF filings, has contributed to this updated timeline. As we await the launch, it will be interesting to observe how ETH performs in the market and the inflows in the days following the ETFs’ introduction.

Curve Finance Founder Faces Significant Liquidations

Curve Finance, a prominent decentralized finance (DeFi) protocol, experienced a major setback this week as its founder, Michael Egorov, faced substantial liquidations. Egorov had borrowed nearly $100M in stablecoins against $140M in CRV, the protocol’s native token. As a result, CRV’s price dropped by 30%, and Egorov lost over 100M CRV tokens. Despite this, Egorov remains committed to building Curve and plans to focus on enhancing the protocol’s lending and borrowing products. The incident has sparked debate within the community, with some questioning Egorov’s motives. However, Friday marked the biggest locking day for CRV in months, indicating that many believe the worst is over for Curve Finance.

MicroStrategy Increases Bitcoin Investment Offering

MicroStrategy, led by Michael Saylor, has been a prominent advocate for Bitcoin investment. Last week, the company announced a $500 million raise to invest in Bitcoin, which has since increased by an additional $200 million. Saylor’s commitment to Bitcoin remains unwavering, as evidenced by his recent comments at a conference in Prague. He emphasized that people may hesitate to buy Bitcoin at $950,000 and then miss the opportunity to invest during a dip at $700,000. Saylor even mentioned a potential $8 million price tag for Bitcoin in the distant future, depending on the state of fiat currency. While this may seem absurdly high, it demonstrates his long-term conviction in the cryptocurrency.

So…

The past week in the cryptocurrency market has been marked by significant developments, from high-profile endorsements to the anticipation of new investment vehicles. As the market continues to evolve, it will be crucial to monitor the impact of these events on the prices and adoption of various cryptocurrencies. With the potential launch of Ethereum ETFs and the ongoing debate surrounding Curve Finance, the coming weeks are likely to bring further excitement and volatility to the crypto space.

Legacy Markets

European Turmoil Sinks Stocks

European stocks faced their worst week since October due to political instability in France, sparked by President Macron’s announcement of a snap legislative election. The Stoxx 600 dropped 0.8%, with France’s CAC 40 index erasing its 2022 gains. Major French banks like BNP Paribas and Societe Generale reported substantial losses as investors grew wary of loose fiscal policies should Marine Le Pen’s far-right National Rally party gain power. The turmoil increased the premium on French debt relative to Germany, reminiscent of the 2011 Eurozone crisis. The euro also slid to its lowest level against the dollar since April.

Despite Anxiety, Fundamentals Remain Strong

Although European markets succumbed to political nerves, underlying corporate earnings and economic growth remain robust. Mixed trading in Asia saw the MSCI Asia Pacific index nudge lower due to losses in Australia and China, while Japan’s Nikkei benchmark rallied. Anticipation of future rate hikes from the Bank of Japan initially weakened the yen before trimming losses. Key data points this week include remarks from Chicago Fed President Austan Goolsbee and the University of Michigan’s consumer sentiment survey, providing additional clues into the health of the US economy.

Calm After “Triple Witching” Storm

Despite pre-holiday volatility sparks from Friday’s “triple witching” event, where stock options, index futures, and index options simultaneously expired, the new trading week started calmly. Although US equity futures retreated slightly, markets expect the positive momentum from last week’s inflation data to continue. Both the S&P 500 and Nasdaq 100 hit record highs last week after May’s flat Consumer Price Index growth suggested inflation pressures are abating.

Moderating Inflation Buoys Stocks

May’s unchanged Consumer Price Index hinted that the worst inflation may be over, buoying the S&P 500 and Nasdaq to new highs. Slowing growth in energy and transportation costs drove the inflation relief as investors hoped for a “soft landing” for the economy. The post-CPI enthusiasm fizzled slightly as the Fed tamped down expectations of future rate cuts, emphasizing the need for additional data before adjusting its policy stance. Nevertheless, hopes remain that peak inflation has passed, granting stocks more room to climb.

UK Braces for Rate Cut Consideration

Across the Atlantic, UK markets are gearing up for Thursday’s Bank of England meeting. While a rate hold is universally expected, recent economic deterioration may prompt increased consideration of cuts among policymakers. This month’s inflation data underestimated price growth, signaling future increases could be larger than anticipated. Despite recession concerns, the International Monetary Fund upgraded Britain’s 2023 economic growth forecast on strong labor market resilience. Nevertheless, volatility could grip UK assets this week depending on any hawkish signals from the BOE.

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.