Bitcoin, ETH rises after ending the worst month

After a relatively flat holiday weekend in the US, the best cryptocurrencies recovered, if not so little, on Tuesday.

Bitcoin (BTC) climbed to over $ 20,300 when trading early in the morning – after holding back by swinging between the relatively narrow band of $ 19,000 to $ 20,000 since the transition to July. BTC continued its rise, gaining 4.3% over the last 24 hours to around $ 20,600 from 16:10 ET. Ethereum (ETH) rose around 3.7% to $ 1,160.

By the end of the second quarter last Thursday, the fall of the crypto market in June was the worst month since it was made available on stock exchanges in 2010. BTC’s value fell more than 38% for the month, and ETH’s market value fell by 47%, CNBC reported. The landslide followed Luna’s collapse in May and the crypto-lending platform Celsius’ crisis, which led to widespread sales in space.

Traditional markets also had a tough time. The six months to last Thursday were the worst in the US stock market in the first half of 1970.

Concerns about inflation continued to put pressure on the Dow benchmark index, which closed down 0.42% on Tuesday. However, the broader S&P 500 index closed 0.16% higher, and technology-heavy Nasdaq climbed 1.75% with the surplus of the software development company for video games, Unity Software’s shares rising 12.9% when the market closed.

Oil prices have seen a significant drop after West Texas Intermediate crude oil futures fell below $ 100 a barrel on Tuesday morning. Based on reports from the G7 summit held in Germany last week, some officials believe that President Joe Biden’s plan to allow Russian oil to trade below a price cap could be used as a source of influence to prevent price increases.

As large cryptocurrencies, such as bitcoin, have become a more mature global macroeconomic asset, it also pointed to a higher correlation with broader stock markets, Tom Dunleavy, senior analyst at Messari, told Blockworks.

“Continued monetary tightening, combined with no immediate signs of a postponement on the inflation front, harms all risk assets. Crypto is still trading as an asset with a high beta risk, “said Dunleavy.

In the wake of the Covid-19 omicron variant, the economy this year took a hit from the energy crisis following Russia’s invasion of Ukraine. Gas and food prices have risen significantly, and inflation has reached its highest level in 40 years. Investors are now looking at another possible rate hike from the Federal Reserve that many are worried could tip the US economy into recession.

Craig Erlam, senior market analyst at OANDA, wrote in a note last Thursday that the US economy is among the best positioned to “avert a recession, but it is not entirely immune to the cost-of-living crisis. It may catch up.”

The main things

Investors waiting to distribute huge Stablecoin reserves, analysts say

• Despite the volatile market situation, some digital asset management companies still believe that opportunistic investors are ready to allocate their capital.
• Digital Asset Investment Management’s research shows that crypto’s four largest stable coins – Tether’s USDT, Circles USDC, Binance’s BUSD and MarkerDAO’s DAI – after market value have since grown significantly over a two-year period.
• Australian-based digital asset manager and custodian bank Zerocap told Blockworks that the circulating supply of the top four stack coins increased by 12.6%.

Nexo offers to get another crypto borrower who is struggling in Vauld

• London-based cryptocurrency lender Nexo has signed a term sheet with Coinbase-backed digital asset platform Vauld, which outlines the plan to buy the company’s assets.
• “Following the successful completion of the transaction, Nexo plans to acquire up to 100% of Vauld and reorganize its future business with a view to accelerating its deeper presence in Asia,” Nexo said in a statement on Tuesday.
• The company has a 60-day exploration period related to the intended acquisition, in accordance with the agreement.

Crypto-ETPs saw “Abysmal” returns in June

• Four European-domiciled exchange-traded products of 21Shares had a total return below -40%. 21Shares Aave ETP had the highest negative return in Europe in June, giving -52.6% according to Morningstar data.
• US ETFs have also been hit: Seven of the 15 worst performing funds in June were cryptocurrencies, according to Morningstar.

Going forward

As you enter the second half of 2022, what does that mean for crypto markets? Dunleavy believes it is worth seeing how inflation affects the bottom line for companies.

“Right now, the relationship between price and earnings on the broader indices is in line with historical averages. “If the revenue is missed, the indices should meaningfully re-evaluate lower, which should also pull the crypto down,” Dunleavy said.

“Analysts have historically been too optimistic about earnings, especially during downturns. That seems to be the case again with earnings that have been revised downwards.”

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