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5 Things to Know in Crypto Today

By:
Joel Frank
Published: Jun 30, 2022, 10:20 UTC

With equities extending recent losses and on course for their worst first-half performance on record, cryptocurrencies are under pressure.

Coins

Key Points

  • Crypto selling pressure has continued on Thursday with Bitcoin in the low-$19Ks, Ethereum just above $1K as global stocks drop.
  • The US SEC rejected Grayscale’s application to convert GBTC into a spot Bitcoin ETF as expected.
  • Genisis Trading faces losses in $100s of millions over exposure to 3AC and Babel Finance, sources say.

Crypto Prices Extend Losses Alongside Stocks

Cryptocurrency prices are under pressure across the board on Thursday, with total cryptocurrency market capitalization last down nearly 5.0% in the day in the $830 billion area. That would mark a fifth consecutive session of losses, with crypto markets having shed over $130 billion (nearly 14%) since Sunday, amid little sign of dip-buying at the end of a torrid first half of 2022.

Bitcoin was last trading in the $19,100s with losses of just shy of 5.0% in the last 24 hours, as per CoinMarketCap. Ethereum was last changing hands closer to $1,030, with 24-hour losses closer to 9.0%. Losses in major altcoins including Binance’s BNB, Ripple’s XRP, Cardano’s ADA and Solana’s SOL were between 6-10% over the same time period.

The downside in crypto comes as global equity markets experience further losses. The European Stoxx 600 was last trading lower by just under 2.0% and S&P 5009 index futures are down about down close to 1.5% in pre-market trade, taking losses this week to nearly 4.0%. Various global equity indices are on course for the worst first-half performance since records began.

Markets are being driven by familiar themes – concerns about slowing growth at a time when inflation remains elevated and central banks committed to tightening financial conditions to deal with it. At least, that was the message from central bank heads from the Fed, ECB and BoE on Wednesday, who all appeared at the ECB’s annual Sintra event.

Ahead, the main focus of the day for crypto traders will be the release of US Core PCE inflation data for May at 1230GMT (the Fed’s favored inflation guage), as well as some figures relating to Personal Income and Spending that should update as to the health of the US consumer.

SEC Rejects Grayscale’s Spot Bitcoin ETF Application

The US Securities and Exchange Commission (SEC) late on Wednesday rejected an application by Grayscale Investments to convert its Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin Exchange Traded Fund (ETF). The SEC also rejected a similar application from Bitwise. Analysts had been expecting the rejection given that the SEC has consistently expressed concern about the lack of regulatory oversight of Bitcoin spot markets.

The SEC has approved a handful of Bitcoin futures-based ETFs, given Bitcoin futures markets are overseen by fellow regulatory agency the Commodity Futures Trading Commission (CFTC). Grayscale immediately sued the SEC over the decision to deny its approval to convert GBTC into a spot Bitcoin ETF.

“Grayscale supports and believes in the SEC’s mandate to protect investors, maintain fair, orderly, and efficient markets and facilitate capital formation… and we are deeply disappointed by and vehemently disagree with the SEC’s decision to continue to deny spot Bitcoin ETFs from coming to the US market,” said Grayscale’s CEO Michael Sonnenshein in a statement.

GBTC currently has around $13.5 billion worth of assets under management.

EU Agrees on AML Crypto Rules

EU officials on Wednesday reached an agreement on new anti-money laundering (AML) rules for crypto transactions. Under the new proposal, customer identity will need to be verified for all transactions between regulated digital wallet providers. However, payments between unhosted private wallets will be largely excluded from checks.

Czech MEP Ondřej Kovařík said in a tweet that the deal “strikes the right balance in mitigating risks for fighting money laundering in the crypto sector without preventing innovation and overburdening businesses”. He also remarked to various members of the crypto press that the deal had struck a “good balance” that would avoid the stifling of innovation.

Crypto Winter: Genisis Facing Losses in 100s of Millions Amid 3AC, Babel Finance Implosions

Digital Currency Group (DCG)-owned cryptocurrency market maker Genesis Trading faces losses in the hundreds of millions of US dollars over its exposure to beleaguered crypto hedge fund Three Arrows Capital (3AC) and lending platform Babel Finance, three sources told CoinDesk on Thursday.

3AC’s collapse has sent shockwaves across the crypto industry. Crypto broker Voyager Digital recently had to halt withdrawals after the hedgefund defaulted on loans with around $670 million and other crypto lending firms such as BlockFi are also thought to face similar problems.

IOHK Submits Vasil Hardfork Update Proposal

Input Output Hong Kong (IOHK), the development company behind Cardano, on Thursday submitted an updated proposal to initiate an upgrade hard-fork of its testnet blockchain. Thus, the countdown to the upgrade hard-fork of Cardano’s main Vasil blockchain has begun. Developers say the upgrade will deliver “significant performance and capability upgrades”.

The Vasil hardfork upgrade was initially scheduled for this Wednesday but got delayed by a month at the last minute, with the development team needing to iron out a few remaining bugs.

About the Author

Joel Frank is an economics graduate from the University of Birmingham and has worked as a full-time financial market analyst since 2018. Joel specialises in the coverage of FX, equity, bond, commodity and crypto markets from both a fundamental and technical perspective.

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