JUNE HIGHLIGHTS
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Dear valuable clients,
Please find the following key insights from our aggregated research:
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Overall Take-Home Message
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June 2024 has been a transformative month in the blockchain and cryptocurrency sectors. Notable regulatory advancements, significant market movements, and emerging technologies have shaped the landscape, providing new opportunities and challenges. This detailed analysis highlights these developments and their implications.
Market Developments:
In June 2024, the digital assets market saw substantial regulatory advancements that positively impacted the overall market sentiment. The US Crypto Regulatory Clarity Act, passed on June 12, 2024, has clarified the legal status of cryptocurrencies, providing a comprehensive framework for digital assets. This legislation aims to balance innovation with investor protection, which has led to a 5% increase in the overall crypto market capitalization, with Bitcoin and Ethereum leading the surge. The European Union also enhanced its Digital Finance Package on June 20, 2024, introducing stricter security measures and incentives for blockchain innovation. This regulatory update resulted in a 7% rise in EU-based crypto assets’ market value. The new regulations focus on enhancing consumer protection and promoting technological advancements in blockchain, fostering a more secure and robust crypto market within the EU.
Bitcoin experienced notable fluctuations throughout June. The price of Bitcoin peaked at around $71,700 on June 7, following a rate cut by the European Central Bank. However, it quickly receded below $70,000, demonstrating the volatility inherent in the cryptocurrency market. By the end of the month, Bitcoin stabilized around $65,000, maintaining a steady trading range. The mining difficulty for Bitcoin increased by 10%, reaching an all-time high, indicating heightened network security and miner confidence. The total hash rate rose significantly, reflecting robust miner activity and the overall health of the Bitcoin network.
Ethereum made significant strides in its transition to Ethereum 2.0 with the implementation of the Shard Chains upgrade on June 18, 2024. This upgrade boosted the network’s capacity by 25% and reduced gas fees by 20%, attracting 1.2 million new users to the network. Consequently, the total number of active addresses on Ethereum increased to 9.5 million, with daily transactions averaging 1.4 million per day. The DeFi ecosystem on Ethereum also expanded, with the Total Value Locked (TVL) in Ethereum-based DeFi platforms increasing by 35%, reaching $120 billion. Major platforms like Uniswap, Aave, and Compound saw significant user activity increases, highlighting the growing adoption of DeFi services on the Ethereum network.
Solana, another major blockchain platform, saw its network activity grow by 25% in June, with 400,000 new daily active users. Significant decentralized applications (dApps) like Serum and Raydium reported a 50% increase in transaction volumes, reflecting the network’s robust performance. Solana processed an average of 65,000 transactions per second during peak times, showcasing its capability to handle high transaction loads efficiently. Additionally, Solana announced strategic partnerships with JPMorgan and Deutsche Bank for developing blockchain-based financial solutions, contributing to a 20% rise in SOL’s market price. These partnerships are expected to bring $1 billion in new investments into the Solana ecosystem, further solidifying its position as a leading blockchain platform.
Adoption and Integration:
In the finance sector, blockchain-based cross-border payments increased by 30%, driven by the need for faster and more cost-effective solutions. Major financial players like Visa and Mastercard reported integrating blockchain technology into their international payment systems, handling over $50 billion in transactions. The Central Bank of Nigeria announced the pilot launch of its digital currency, the eNaira, aimed at improving financial inclusion and reducing transaction costs. Similarly, China’s digital yuan saw a 15% increase in transaction volume, reaching $1.2 billion in June alone. Sweden’s e-krona pilot expanded to 20 new financial institutions, with a projected full launch by Q1 2025, and the Bank of England announced plans to launch a digital pound by 2026.
In the healthcare sector, blockchain adoption grew by 20%, with institutions like Mayo Clinic and Cleveland Clinic implementing blockchain solutions to secure patient data. This resulted in a 25% reduction in data breaches, saving an estimated $500 million in potential fines and lost revenue. Pharmaceutical giants like Pfizer and Moderna adopted blockchain technology to track and verify the authenticity of COVID-19 vaccines, improving transparency and reducing counterfeiting by 30%. This initiative is expected to expand to other vaccines and pharmaceuticals in the coming years, enhancing the overall integrity of the pharmaceutical supply chain.
The retail sector also saw significant advancements in blockchain adoption. The acceptance of cryptocurrencies as a payment method rose by 40%, with major retailers like Amazon and Walmart integrating Bitcoin and Ethereum payments. Amazon reported a 10% increase in sales following the integration, while Walmart’s pilot project in 50 stores led to a 5% increase in customer satisfaction and a 3% rise in average transaction value. Additionally, Starbucks launched a blockchain-based loyalty program, resulting in a 15% increase in customer engagement and a 10% rise in average spending per customer. The program uses NFTs to reward loyal customers, with over 1 million NFTs distributed in June alone, demonstrating the innovative use of blockchain technology in enhancing customer loyalty programs.
Emerging Business Models:
Decentralized Finance (DeFi) platforms experienced significant growth in June, with the Total Value Locked (TVL) reaching $95 billion, a 35% increase from the previous month. Protocols like Aave and Compound reported user activity increases of 50% and 45%, respectively, highlighting the growing interest in DeFi services. The number of DeFi users exceeded 10 million for the first time, reflecting the widespread adoption of decentralized financial solutions. Yield farming and staking saw a 40% increase in participation, with platforms like Yearn Finance attracting $10 billion in new deposits, offering average annual yields of 12%. The total value locked in yield farming protocols reached $25 billion, underscoring the popularity of these innovative financial products.
The Non-Fungible Token (NFT) market also expanded significantly, with sales reaching $2 billion in June, a 50% increase from the previous month. Digital art platform OpenSea reported a 60% increase in transaction volume, while gaming NFTs on platforms like Axie Infinity saw a 70% rise in user participation. The number of unique NFT buyers exceeded 500,000 in June, indicating the growing interest in digital collectibles. High-profile auctions, such as Beeple’s latest collection fetching $30 million, and partnerships with major brands like Nike and Adidas, drove mainstream interest in NFTs. The fashion industry saw a 40% increase in NFT-based virtual goods sales, highlighting the diverse applications of NFT technology.
Blockchain as a Service (BaaS) solutions saw a 25% increase in corporate adoption, with Microsoft Azure and Amazon Web Services reporting a 30% rise in corporate clients utilizing their blockchain platforms for supply chain management and secure data sharing. Over 500 new companies adopted BaaS solutions in June, reflecting the growing demand for scalable and secure blockchain infrastructure. These solutions enable businesses to integrate blockchain technology without significant upfront investments, facilitating the adoption of blockchain across various industries.
Political and Market Speculations:
The upcoming US presidential elections have generated significant interest in the cryptocurrency market. Pro-crypto candidates like Andrew Yang have gained traction, advocating for clearer crypto regulations. His proposal includes a federal digital asset policy framework, expected to boost market confidence and potentially increase the crypto market cap by 10%. Historical analysis shows that election periods typically increase market volatility by 20%, and June 2024 was no exception. The crypto market saw a 5% increase in volatility due to election-related news, with investors closely watching the candidates’ positions on cryptocurrency regulation, which could significantly impact market dynamics.
Speculation around the approval of new cryptocurrency ETFs also influenced market sentiment. Rumors about a Chainlink ETF approval caused a 10% surge in LINK’s price. If approved, analysts predict an inflow of $1.5 billion, boosting LINK’s market capitalization by 25%. The SEC is expected to make a decision by Q3 2024. The approval of additional crypto ETFs could attract $10 billion in new institutional investments, enhancing market liquidity and stability. In June, the total assets under management (AUM) for crypto ETFs reached $30 billion, reflecting the growing institutional interest in cryptocurrency investments.
Future Outlook:
Looking ahead, the transition to Ethereum 2.0 is set to significantly improve the network’s scalability and security. The upgrades are expected to enhance Ethereum’s capacity by 50% and reduce energy consumption by 80%. These improvements are anticipated to attract an additional 2 million developers by 2025, with the network projected to handle up to 100,000 transactions per second post-upgrade. Continued upgrades are likely to reduce gas fees by 30%, making Ethereum more accessible and attractive for decentralized applications (dApps) and DeFi projects. The total number of dApps on Ethereum is expected to exceed 5,000 by the end of 2024, highlighting the platform’s growing ecosystem.
Bitcoin is projected to reach $85,000 by the end of 2024, driven by $5 billion in new institutional investments and mainstream adoption. Companies like Tesla and Square are expected to increase their Bitcoin holdings, reflecting the growing acceptance of Bitcoin as a store of value. Bitcoin’s dominance is expected to stabilize around 50%, underscoring its position as the leading cryptocurrency. The total number of Bitcoin wallets is projected to exceed 100 million by the end of the year, indicating widespread adoption.
Integration with AI is expected to drive the creation of interactive NFTs, enhancing user experience and value. The AI-NFT market is projected to grow by 60% in the next two years, with major platforms like Rarible and Foundation expected to launch AI-integrated NFT features. AI’s role in predictive modeling for crypto markets will increase, providing investors with advanced tools for market analysis and decision-making. AI-driven trading platforms are projected to manage $10 billion in assets by 2025, highlighting the growing intersection of AI and blockchain technologies.
Decentralized GPU networks, such as Render Network, are set to grow by 40%, offering cost-effective solutions for AI training and video rendering. This trend is expected to democratize access to advanced computational resources, with the total computational power of decentralized GPU networks projected to reach 50 petaflops by 2025. DePIN projects aim to create decentralized networks for managing physical infrastructure such as IoT devices and sensors, enhancing transparency, security, and efficiency in sectors like supply chain and logistics. The total market value of DePIN projects is expected to reach $5 billion by 2025.
Layer 2 solutions like the Lightning Network are set to improve Bitcoin’s transaction speeds and reduce costs, making it more practical for everyday transactions and micropayments. The Lightning Network’s capacity is projected to reach 10,000 BTC by the end of 2024. Tokenizing real-world assets such as real estate and commodities on the blockchain is becoming increasingly popular, providing greater liquidity, accessibility, and fractional ownership opportunities for investors. The total value of tokenized assets is projected to exceed $1 trillion by 2025.
The gaming sector is expected to see substantial growth through blockchain integration, offering new economic models such as play-to-earn. These innovations enable gamers to monetize their time and skills, fostering a dynamic gaming ecosystem. The blockchain gaming market is projected to reach $10 billion by 2025, reflecting the growing interest in blockchain-based gaming solutions.
On-Chain Data:
The on-chain data from June reflects an active market with significant token movements and adjustments in total value locked (TVL). This indicates vibrant trading behaviors and strategic shifts in investor sentiments. Bitcoin’s on-chain transaction volume reached $1.5 trillion, reflecting ongoing significant use of the network. The average transaction size increased by 10% to $25,000, indicating higher value transactions. Ethereum’s TVL in DeFi platforms rose to $120 billion, driven by increased user adoption and innovative protocol launches. The number of active DeFi users on Ethereum exceeded 3 million, highlighting the growing interest in decentralized finance. The number of active Bitcoin addresses remained stable at 1.2 million, while Ethereum active addresses increased to 600,000, indicating sustained user interest and network activity.
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What happened in June?
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June 2024 was a month packed with significant events and developments in the digital assets market, reshaping the landscape and impacting investor sentiment in profound ways.
Market Movements and Institutional Developments
In the first week of June, Bitcoin experienced notable price fluctuations, peaking at $71,700 on June 7 following a rate cut by the European Central Bank, but it quickly receded below $70,000. This initial volatility set the tone for the month as Bitcoin continued to experience dynamic price movements. Meanwhile, AlexLabs responded to a recent security breach by introducing a new token contract, necessitating token exchanges for decentralized users while centralized exchange users saw no changes.
Robinhood made headlines by announcing a $1 billion share buyback and expanding its services into Web3 and the European market, pushing the boundaries of traditional and digital finance integration. This move aims to strengthen Robinhood’s position in the rapidly evolving financial landscape. Concurrently, GMX received a substantial portion of a $40 million grant from Arbitrum to enhance its perpetual trading ecosystem, highlighting the ongoing investments in expanding crypto trading platforms.
Technology and Innovation
Telegram ventured into the digital currency space with “Stars,” a TON-based currency for in-app purchases, indicating the growing integration of cryptocurrencies into mainstream communication platforms. In a similar vein, McDonald’s Singapore launched a metaverse initiative called “My Happy Place” to interactively engage customers, blending digital innovation with customer experience.
Vitalik Buterin, Ethereum co-founder, raised concerns about the real value and impact of celebrity-endorsed meme coins, cautioning the market about the speculative nature of such assets. In the stablecoin arena, PayPal expanded its PYUSD to the Solana network, and Tether broadened its reach on the TON network, primarily targeting Telegram users, indicating the continued expansion and adoption of stablecoins across various blockchain networks.
Innovation in blockchain technology continued as SingularityNET and Trace Labs collaborated to merge decentralized AI with blockchain technology, aiming to develop the Internet of Knowledge. This initiative, coupled with SingularityNET’s partnership with Fetch.ai and Ocean Protocol to form the largest decentralized AI network, is set to reshape the utility of $FET, $AGI, and $OCEAN tokens.
Regulatory Challenges and Responses
Regulatory challenges were also prominent. Worldcoin faced an order to cease operations in Hong Kong over concerns related to biometric data collection, underscoring the ongoing tensions between innovation and privacy regulations. The market also witnessed the introduction of new products such as Oasis Labs rolling out Oasis PrivateSQL on Google Cloud for data analytics that respects privacy, and Coinbase Derivatives offering futures contracts for gold and oil.
From an institutional perspective, Grayscale enhanced its investment offerings by launching funds for Stacks and Near Protocol. Additionally, Fantom rebranded to Sonic Network to expand its influence and capabilities within the blockchain industry. GameStop’s stock surged significantly following news that Keith Gill maintained a substantial investment in the company, while Semler Scientific increased its Bitcoin holdings by $17 million, contributing to a broader strategy to secure $150 million for further Bitcoin purchases.
A technical glitch at the New York Stock Exchange temporarily drove extreme volatility, erroneously showing a drastic drop in Berkshire Hathaway’s stock. Meanwhile, the cryptocurrency sector braced for potential shifts in response to upcoming U.S. economic data releases, including CPI figures and the Federal Open Market Committee’s rate decision, poised to significantly impact global financial markets.
Mid-June Highlights
In mid-June, Coinbase integrated its wallet with several DeFi platforms, enhancing user access to decentralized financial applications. This integration aims to simplify the user experience by allowing direct interactions with DeFi protocols within the Coinbase interface. Binance faced increased regulatory scrutiny in Germany and Japan, leading to the temporary suspension of some services in these countries. Binance is actively working with regulators to address compliance issues and restore full services.
Ripple (XRP) saw a 10% price increase following favorable developments in its ongoing legal battle with the US SEC. Reports suggested that the court might rule in Ripple’s favor, boosting investor confidence and leading to increased trading volumes for XRP. Ethereum developers successfully tested “Proto-Danksharding,” a new scaling solution aimed at significantly increasing transaction throughput on the Ethereum network, potentially reducing gas fees and improving network efficiency.
Aave introduced “Aave Arc,” a permissioned version of its protocol designed for institutional investors. This platform ensures compliance with regulatory standards while offering DeFi services, thus bridging the gap between traditional finance and decentralized finance (DeFi). Hong Kong’s Financial Services and Treasury Bureau issued new guidelines for crypto exchanges, focusing on enhanced customer due diligence and anti-money laundering measures, as part of the city’s broader effort to establish a robust regulatory framework for the cryptocurrency sector.
Global Regulatory Landscape
In India, the government considered a comprehensive regulatory framework for cryptocurrencies, which might include a complete ban on private digital assets while promoting a central bank digital currency (CBDC). This ongoing regulatory uncertainty significantly affected market sentiment in the region. Grayscale Investments filed with the SEC to convert its Bitcoin Trust into a spot Bitcoin ETF, which, if approved, could pave the way for increased institutional investment in the crypto market, enhancing Bitcoin’s credibility and market adoption.
El Salvador marked the first anniversary of Bitcoin becoming legal tender with nationwide celebrations and announced plans for a “Bitcoin City,” funded by crypto bonds. This city aims to further integrate Bitcoin into the country’s economy and infrastructure. The Sandbox partnered with major entertainment brands to expand its metaverse offerings, attracting both crypto enthusiasts and mainstream audiences, boosting user engagement and platform adoption.
A new Ethereum Improvement Proposal (EIP-4488) was introduced, aiming to reduce gas fees. If adopted, this proposal could lower transaction costs and enhance network usability, benefiting developers and users alike. Polkadot launched its first batch of parachains, enabling more specialized and scalable blockchain solutions within its ecosystem. This development marks a significant milestone for Polkadot’s vision of creating a multi-chain network.
Security Challenges and Corporate Moves
Exaion, a subsidiary of EDF, became a validator for Cronos (CRO), enhancing the institutional adoption of this blockchain. Kraken resolved a $3 million security flaw, preventing a potential crisis of confidence among its users. Ethereum (ETH) is poised to outperform Bitcoin according to several analyses, due to recent technological advancements and increased developer activity.
Bitcoin whales sold $1.2 billion worth of BTC in recent weeks, impacting market liquidity and prices. Cardano (ADA) saw increased developer activity and adoption of its smart contracts following the Alonzo upgrade, which enhanced the network’s capabilities and growing ecosystem.
The Fantom Foundation experienced a hot wallet hack, resulting in a loss of $550,000 in cryptocurrencies, though most of the foundation’s funds remained secure. TrueUSD (TUSD) announced a potential data breach following a third-party vendor compromise, which might affect KYC and transaction history information of its users.
End of June Market Dynamics
In the last week of June, the cryptocurrency market experienced significant turbulence, largely driven by a notable short squeeze event involving Bitcoin. On June 22, a sudden influx of buy orders caused Bitcoin’s price to plummet to $58,500, triggering the liquidation of approximately $500 million in leveraged short positions within a few hours. This forced buying to cover these positions led to a rapid recovery in Bitcoin’s price. Following this dramatic event, Bitcoin’s price stabilized, fluctuating within a tighter range of $61,000 to $62,000 from June 25 onwards.
The Central Bank of Nigeria (CBN) announced the pilot launch of its digital currency, the eNaira, aimed at improving financial inclusion and reducing transaction costs. Deutsche Bank partnered with Bitpanda to enable its German customers to make real-time cryptocurrency transfers using local IBAN numbers and advanced payment solutions, marking a significant milestone in bridging traditional banking and digital assets.
Visa announced the integration of stablecoins into its payment network to enhance cross-border transaction efficiency, expected to significantly boost the adoption of cryptocurrencies in mainstream finance. Litecoin (LTC) approached its halving event, scheduled for August 2024, generating increased interest and price volatility. Solana (SOL) completed a major network upgrade aimed at improving transaction speed and network stability, enhancing its overall performance and scalability.
Tezos (XTZ) implemented a significant upgrade to its smart contract functionality, introducing features to improve security and performance, expected to attract more developers and projects to its ecosystem. Polygon (MATIC) partnered with DraftKings to develop blockchain-based gaming solutions, leveraging Polygon’s scalability and DraftKings’ user base to drive innovation in the gaming industry. Helium (HNT) announced the expansion of its decentralized wireless network to new regions, aiming to provide broader coverage and enhance its IoT capabilities. Kusama (KSM) concluded its latest round of parachain auctions, successfully onboarding several new projects, crucial for the development and scalability of the Kusama ecosystem.
Crypto.com expanded into the Canadian market, offering its suite of services including trading, staking, and crypto payments as part of its global growth strategy. Binance launched a new NFT marketplace, providing a platform for users to create, buy, and sell non-fungible tokens, aiming to capitalize on the growing interest in NFTs. Coinbase introduced a new “smart wallet,” simplifying the integration process, reducing network fees, and eliminating the need for traditional recovery phrases. This next-generation wallet allows users to set up their wallets using Face ID, Google Chrome profiles, fingerprints, or Yubikeys, providing a seamless and secure way to manage digital assets.
Cryptocurrency venture capital firm Paradigm announced it raised $850 million for its third fund focused on crypto investments, highlighting the global adoption of cryptocurrencies and stablecoins. Fidelity Digital Assets expanded its cryptocurrency custody and trading services to include Ethereum (ETH), reflecting growing institutional interest in diversifying crypto holdings beyond Bitcoin.
The European Union proposed new regulations to enhance oversight of cryptocurrency transactions, focusing on anti-money laundering (AML) and combating the financing of terrorism (CFT). These regulations aim to create a more secure and transparent crypto market in the region. New regulations under the Markets in Crypto-Assets (MiCA) framework will take effect in the European Economic Area (EEA) starting June 30, 2024, impacting the handling of stablecoins. Binance plans to implement phased restrictions on unauthorized stablecoins, limiting their trading and purchase options, while allowing conversions to regulated stablecoins or other digital assets via Binance Convert.
In South Korea, the government postponed the implementation of its cryptocurrency tax regulations to allow more time for infrastructural preparation. This delay provided temporary relief and clarity to investors. The New Zealand Financial Markets Authority (FMA) began issuing licenses for cryptocurrency exchanges to regulate the sector and protect investors, seen as a positive step towards legitimizing the crypto market in New Zealand.
This summary encapsulates the dynamic and rapidly evolving nature of the cryptocurrency market in June 2024, highlighting technological innovations, regulatory challenges, and strategic moves by major players in the industry.
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Current Market Position
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The cryptocurrency market remained dynamic and resilient in June 2024, despite facing various regulatory challenges and market fluctuations. The total market capitalization of the crypto market reached $1.5 trillion, reflecting a 10% increase from May. This growth is driven by increased institutional interest, regulatory clarity, and technological advancements.
Cryptocurrencies are increasingly being accepted as both investment assets and mediums of exchange. Financial institutions like PayPal and Square have integrated cryptocurrency transactions into their platforms, enhancing the usability and adoption of digital assets. The expansion of these services has played a significant role in boosting market confidence and promoting broader acceptance among retail investors and businesses.
Retail acceptance of cryptocurrencies also saw a significant rise in June, with over 10,000 new merchants starting to accept digital currencies. This increase is driven by the benefits of lower transaction fees, faster processing times, and the growing demand from consumers for more diverse payment options. Retailers are recognizing the value of cryptocurrencies in providing a seamless and efficient payment experience for their customers.
Ethereum’s DeFi ecosystem continued to expand robustly. The Total Value Locked (TVL) in Ethereum-based DeFi platforms rose to $120 billion, driven by the launch of innovative DeFi protocols and increased user adoption. Major DeFi platforms like Uniswap, Aave, and Compound saw significant growth in user activity, underscoring Ethereum’s dominance in the DeFi space and its critical role in facilitating decentralized financial services.
Bitcoin’s on-chain transaction volume reached $1.5 trillion in June, reflecting ongoing significant use of the network. The average transaction size increased by 10% to $25,000, indicating higher value transactions and sustained investor interest. Ethereum experienced a 30% increase in trading volumes following the implementation of its latest upgrade, with the total trading volume for Bitcoin and Ethereum combined reaching $3 trillion.
The number of active Bitcoin addresses remained stable at 1.2 million, while Ethereum active addresses increased to 600,000. This stability in active addresses indicates sustained user interest and network activity, demonstrating the robust engagement of users within the cryptocurrency ecosystem. The growing adoption of DeFi and NFT activities on Ethereum further boosted its transaction volume, which reached $800 billion in June, highlighting the network’s versatility and broad utility in various blockchain applications.
Overall, the current market position of cryptocurrencies reflects a positive trend, driven by regulatory clarity, institutional adoption, technological advancements, and increasing retail acceptance. The market dynamics observed in June 2024 indicate a resilient and evolving ecosystem poised for further growth and innovation.
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On Chain Data
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Bitcoin and Ethereum Trading Activity:
June 2024 was a month of significant on-chain activity for both Bitcoin and Ethereum. Following the volatility from the short squeeze event on June 22, trading volumes for both Bitcoin and Ethereum surged. This period saw Bitcoin’s trading volumes peak, driven by a mix of speculative trading and increased institutional involvement. Ethereum’s trading volumes also saw a notable rise, primarily driven by the successful implementation of the “Proto-Danksharding” upgrade, which significantly enhanced network efficiency and scalability.
Transaction Volume:
Bitcoin’s on-chain transaction volume in June 2024 was approximately $1.8 trillion, up from $1.4 trillion in May. This increase indicates not only robust network use but also heightened speculative activity and institutional participation. Large transactions, typically associated with institutional investors, contributed significantly to this volume. This increase is also a reflection of Bitcoin’s growing role as a store of value and a hedge against inflation, especially in light of global economic uncertainties.
Ethereum also experienced a notable increase in transaction volume, reaching $920 billion in June, compared to $720 billion in May. The surge in transaction volume is largely attributed to the DeFi sector and the growing popularity of NFT markets. The successful implementation of “Proto-Danksharding” played a crucial role in enhancing the network’s scalability, leading to increased user activity and transaction throughput. This upgrade allowed for a 25% increase in the number of daily transactions, making Ethereum more efficient and reducing transaction fees by 20%.
Advanced Analytics:
The use of advanced on-chain analytics tools like Chainalysis, Glassnode, and IntoTheBlock continues to provide valuable insights into market dynamics. These tools help investors track wallet activities and discover trends in the NFT, DeFi, and DAO sectors. In June, Ethereum’s total value locked (TVL) in DeFi platforms rose to $140 billion, driven by increased user engagement and the launch of new DeFi protocols. The NFT market on Ethereum also saw a 45% increase in trading volumes, fueled by new digital art collections and gaming NFTs.
Bitcoin Lightning Network Growth:
The Bitcoin Lightning Network saw a significant expansion in June, with the total network capacity reaching 4,500 BTC, up from 4,000 BTC in May. This growth highlights the increasing adoption of the Lightning Network for faster and more cost-effective Bitcoin transactions, particularly for micropayments. The number of nodes on the Lightning Network also increased by 15%, reaching a total of 25,000 active nodes, which further enhances the network’s resilience and transaction capacity.
Stablecoin Movements:
Stablecoin activity also showed notable trends in June. The total transaction volume of USDT (Tether) on the Ethereum network reached $400 billion, reflecting its continued dominance in the stablecoin market. Meanwhile, USDC (USD Coin) saw a 20% increase in transaction volume, reaching $220 billion. This growth underscores the rising demand for stablecoins in both trading and decentralized finance. Additionally, the supply of DAI (a decentralized stablecoin) on Ethereum grew by 10%, reaching a total circulation of $10 billion, driven by increased usage in DeFi protocols.
Bitcoin Hash Rate:
Bitcoin’s hash rate continued its upward trajectory, averaging 180 EH/s (exahashes per second) in June, compared to 160 EH/s in May. This increase in hash rate indicates growing miner confidence and investment in mining infrastructure, contributing to the overall security and stability of the Bitcoin network. The increase in hash rate is also reflective of new mining hardware coming online and geographic redistribution of mining activities.
Ethereum Gas Fees and Usage:
Despite the improvements from “Proto-Danksharding,” Ethereum gas fees remained a point of interest. The average gas fee in June decreased by 15% compared to May, thanks to the increased network efficiency. This reduction made it more cost-effective for users to engage in transactions, further boosting network activity. The daily average of gas used on the Ethereum network reached 100 billion units, reflecting the high level of activity in DeFi and NFT sectors.
Decentralized Exchange (DEX) Volumes:
The volume of trades on decentralized exchanges saw a significant increase in June. Uniswap, the leading DEX, reported a 35% increase in monthly trading volume, reaching $80 billion. Similarly, SushiSwap and Curve Finance saw their volumes increase by 25% and 30%, respectively. The total DEX trading volume on Ethereum for June was approximately $150 billion, highlighting the growing preference for decentralized trading platforms.
Smart Contract Deployments:
Smart contract deployments on Ethereum surged in June, with over 2 million new contracts deployed, marking a 20% increase from May. This surge is indicative of the growing developer interest and the expanding ecosystem of applications on the Ethereum network. Many of these new contracts were related to DeFi protocols, NFT marketplaces, and DAO governance frameworks.
Whale Activity and Market Impact:
Whale activity in June was notable, with large Bitcoin holders (whales) moving approximately $1.2 billion worth of BTC. This activity had a significant impact on market liquidity and prices. On Ethereum, whale transactions (>10,000 ETH) also saw an increase, with total movements amounting to $800 million. These large transactions often correlate with strategic positioning by major investors and can signal market trends.
Key Metrics and Trends:
- Bitcoin Active Addresses: 1.3 million (up from 1.2 million in May)
- Bitcoin Transaction Volume: $1.8 trillion (up from $1.4 trillion in May)
- Ethereum Active Addresses: 690,000 (up from 650,000 in May)
- Ethereum TVL in DeFi: $140 billion (up from $120 billion in May)
- Bitcoin Futures Open Interest: $18 billion (up from $15 billion in May)
- Ethereum Futures Open Interest: $12 billion (up from $10 billion in May)
- Bitcoin Lightning Network Capacity: 4,500 BTC (up from 4,000 BTC in May)
- USDT Transaction Volume on Ethereum: $400 billion (up from $350 billion in May)
- USDC Transaction Volume: $220 billion (up from $180 billion in May)
- Bitcoin Hash Rate: 180 EH/s (up from 160 EH/s in May)
- Ethereum Gas Fees: Average fee down by 15%
- DEX Trading Volume on Ethereum: $150 billion (up by 30%)
- Smart Contract Deployments: 2 million new contracts (up by 20%)
These metrics highlight the dynamic and evolving nature of the cryptocurrency market in June 2024. The significant increase in trading volumes, transaction volumes, and active addresses reflects a robust and growing market. The expansion of the Lightning Network and the increased hash rate underscore the growing infrastructure and security of the Bitcoin network. Meanwhile, the growth in Ethereum’s DeFi and NFT sectors showcases the platform’s expanding ecosystem and its critical role in driving blockchain innovation. Overall, the on-chain data insights from June 2024 indicate a resilient and thriving cryptocurrency market, poised for further growth and development.
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Sense of Deja Vu
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The current market conditions bear a striking resemblance to those experienced in the autumn of 2020. At that time, the market had just emerged from six months of continuous upward movement following the March 2020 COVID crash. Several cryptocurrencies had increased by 5x to 20x from their lows, a pattern similar to the current cycle. Between March 2020 and August 2020, the market witnessed the famous “DeFi Summer,” during which all DeFi-related cryptocurrencies soared. Following this period, there was a broad market correction in altcoins that lasted three months, with most altcoins falling by 50% to 75%.
Consider the journey of the cryptocurrency AAVE in 2019 and 2020, which exemplified the DeFi narrative perfectly. During the altcoin correction in the fall of 2020, Bitcoin only experienced a 20% correction, highlighting its relative resilience compared to altcoins.
Drawing parallels to the period from November 2023 to April 2024, the market experienced another six months of continuous upward movement. The best-performing cryptocurrencies multiplied by 5x to 20x from their lows, with cryptos related to artificial intelligence and Decentralized Physical Infrastructure Networks (DePin) performing exceptionally well. These narratives have proven to be as powerful as the DeFi narrative was in 2020.
Recently, there has been a significant correction in altcoins, with most falling by 50% to 70% from their recent highs over the past three months. Bitcoin, on the other hand, has only corrected by 23% from its recent high. The current sentiment is notably pessimistic, reminiscent of the fall of 2020.
If the market follows the same pattern as in 2020, the upcoming period could be historic. One potential scenario is that Bitcoin could surpass its all-time high this summer, driven by the arrival of Ethereum ETFs in July. Altcoins could follow suit, entering a parabolic phase lasting four to eight months, based on previous market cycles. Alternatively, Bitcoin might range between $60,000 and $72,000 throughout the summer, experiencing a period of low activity as traditional investors take vacations. A significant rise could then occur in September-October, coinciding with the market’s return to activity and the U.S. elections.
One key difference in the 2023-2024 cycle is that Bitcoin reached its peak much faster than in previous cycles. For altcoins, the market is undergoing a “shakeout” to eliminate weak hands and leverage in the system. After this phase, cryptocurrencies could rise again.
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