Crypto fear fades: Confidence up

June 10, 2024

Reading time: 5 minutes

Crypto investment products register $2 billion in June inflows

Key points:

  • Trading volumes for exchange-traded products surged to $12.8 billion for the first week of June.

  • Total assets under management surpassed $100 billion for the first time since March 2024.

News - Digital asset investment products got off to a strong start in June, with a combined inflow of over $2 billion across various providers. This positive trend follows a five-week period where crypto investment products raked in $4.3 billion.

As per CoinShares’ (an asset manager) report, there has been a surge in trading volumes for exchange-traded products (ETPs) to $12.8 billion in the first week of June, a 55% jump from the previous week.

Almost all crypto ETP providers witnessed inflows during this period, a trend CoinShares attributed to weaker-than-expected economic data in the US. This data, according to the report, has fueled speculation of potential interest rate cuts by the Federal Reserve, leading investors back to crypto assets.

What’s more? The positive sentiment pushed the total assets under management (AUM) in crypto investment products above $100 billion for the first time since March 2024. Notably, only Grayscale Investments and CoinShares XBT recorded outflows during this period.

Within the inflow leaders, iShares ETFs in the US emerged at the top, attracting $948 million, followed by Fidelity ETFs with $680 million. Bitcoin unsurprisingly remained the dominant player, attracting $1.97 billion in inflows for the week. However, Ether-based products also saw a record inflow of $69 million, their best performance since March.

South Korea's FSC issues guidelines on treatment of NFTs as virtual assets

Key points:

  • NFTs lacking unique characteristics will be treated as crypto assets.

  • Fungible NFTs used for payments could be eligible for interest on exchanges.

News - South Korea's financial regulator, the Financial Services Commission (FSC), has issued guidelines to clarify how non-fungible tokens (NFTs) will be categorized under the country's upcoming virtual asset regulations.

The FSC will regulate certain NFTs as virtual assets if they lack the unique characteristics that distinguish them from cryptocurrencies.

Divisible NFTs - Mass-produced, divisible NFTs with payment functionality will be subject to the same regulations as crypto assets. This means they could potentially earn interest when deposited on exchanges, as previously announced by the FSC in 2023.

However, NFTs with little to no economic value, such as those used for ticketing or digital certificates, will be classified differently and excluded from these regulations.

Why so? Jeon Yo-seop, head of the FSC's Financial Innovation Planning department, explained the reasoning behind the classification. He stated that large NFT collections, potentially numbering in the millions, could exhibit characteristics of a fungible asset and be used for payments due to the sheer volume of transactions involved.

The FSC emphasized that the classification process will involve case-by-case reviews, and there won't be a one-size-fits-all approach for determining whether an NFT falls under crypto asset regulations.

Aptos price reaches $8.43: What's driving this surge?

Key points:

  • Aptos price increased by over 2% following a partnership with IONET.

  • IONET chose Aptos for its transparency, scalability, and high transaction speed.

News - Aptos (APT) has shown signs of recovery in recent days, with its price increasing by over 2% in the last 24 hours. This upswing coincided with a collaboration announced on 6 June between Aptos and IONET, a decentralized AI computing platform.

Why IONET collaborated with Aptos - IONET selected Aptos as its underlying blockchain due to its transparency, scalability, and high transaction processing speed (currently at 25,000 transactions per second).

The computing platform’s upcoming launch of its generative AI product and its cryptocurrency (scheduled for 11 June with a potential Binance listing) has also contributed to the increased chatter surrounding Aptos.

Decoding on-chain metrics? However, despite the price rise, sentiment around Aptos remained negative. The Weighted Sentiment metric for APT sat at -0.493, indicating that most online discussions about the token were unfavorable. This negativity could potentially dampen demand and erase the recent price gains.

On a brighter note, Aptos' social dominance has improved, reflecting a rise in discussions compared to other top 100 crypto assets. However, this increase appears to be heavily linked to the IONET partnership.

Another positive indicator is the recovery in Aptos' Total Value Locked (TVL). It climbed to $379.91 million at press time. This is a significant improvement from the low of $326.99 million recorded in mid-May.

Base dominates Ethereum L2 space, reaches $8 Billion in total value locked

Key points:

  • Coinbase's Base surpasses Optimism in TVL, becoming the second-largest Ethereum L2 network.

  • Base's TVL reached over $8 billion within a short period, showcasing exceptional growth.

News - Coinbase's Layer-2 blockchain, Base, has achieved a significant milestone, surpassing its competitor Optimism in total value locked (TVL) within a short period. This achievement solidifies Base's position as a major player in the Ethereum L2 scaling race.

According to L2Beat data, Base's TVL reached over $8 billion as of 10 June. This impressive figure includes $2.14 billion in bridged assets and $5.92 billion in native tokens minted on the blockchain. With this surge, Base sits firmly behind only Arbitrum One, the current leader with a TVL of $18.27 billion.

Why Base is leading? Profitability is another area where Base shines. Data from Dune Analytics revealed that Base generated the highest on-chain profits over the past three months.

This includes a record-breaking $16.9 million in March. While profits dipped to $6.98 million in May, this still places Base significantly ahead of Optimism, which only saw $1.57 million in profits during the same period.

However, Base's rapid growth is not without challenges. During the meme coin frenzy earlier this year, the network experienced an 18-fold increase in stolen funds through phishing scams. This vulnerability aligns with recent concerns raised by Ryan Lee, Chief Analyst at Bitget, regarding the security risks associated with smart contracts.

Did you know?

  • In 2014, the Dogecoin community raised $55,000 to sponsor NASCAR driver Josh Wise and covered his car entirely in Dogecoin and Reddit alien images.

  • Cardano's creators have a love for names. Each step of the platform's development roadmap is named after a famous poet, writer, or computer scientist. ADA, Cardano's native token, takes its name from Ada Lovelace, daughter of Lord Byron and a 19th-century mathematician.

  • In 2021, blockchain startup SpaceChain launched the first Ethereum node in space. By extending the Ethereum network beyond Earth, the project aims to enhance the security and resilience of blockchain technology.

Top 3 coins of the day

Dogecoin (DOGE)

Key points:

  • Dogecoin has been moving sideways, on the lower timeframe.

  • Its volatility has declined considerably over the last two months.

What you should know - DOGE was trading at $0.1441 at press time after having experienced an 11.21% fall in the last week. After zooming out on the daily chart, one can see the downtrend that has been dominating the market since April. However, on the lower timeframe, the memecoin appears to be on an ascent, especially after its recent fall to $0.1198 on 1 May. The bulls have been losing their grip at the $0.1468 level. Well, buyers can find near-term support around the $0.12491 level. The resistance zone for sellers, however, stood within the $0.20290-$0.21648 range. At the time of writing, there was a high possibility of continuation in the DOGE’s price decline before a trend reversal - Something that was ascertained from the reading of RSI.

Monero (XMR)

Key points:

  • The privacy coin was 15.26% up within the past week.

  • It was trading at $178.81, at the time of this analysis.

What you should know - XMR has noted a strong uptrend in price after 20 April with a close to 55% increase. This continued upward move has acted as a lucrative opportunity for traders looking to enter the market with significant momentum. On the 1-day chart, a parabolic curve formation can be seen, signifying high buying pressure, with investors eager to jump on the rising price. However, the curve has been quite steep, hence, the price rise might not be sustainable. Remember, the steeper the curve, the higher the risk of a sudden and dramatic price drop. Even the MACD indicator hinted at the overbought condition of the XMR market. So, XMR, on its way down, could find support near the $140 level.

Bitcoin (BTC)

Key points:

  • Bitcoin’s short-term holders realized cap metric saw an unexpected spike.

  • This could mean that a local top was in and price decline could be on the cards.

What you should know - Bitcoin bulls have been trying hard to weaken the $72k resistance level to break past the all-time-high figure at $73,777. Meanwhile, $67,980-$66,403 has been acting as a good liquidity area with strong support. The leading indicator RSI hinted at Bitcoin’s sideways move which could be expected to continue unless there’s some big news around the Fed’s interest rate cut. On the other hand, if BTC ETF inflows record high numbers, traders can expect another visit to $72k soon. As of press time though, buyers had the upper hand as BTC was up 0.89% in the past week and exchanged hands at $69,575.

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