Grayscale Research Report: Bitcoin and crypto markets were under pressure in June, but asset fundamentals remained unchanged

来源：Grayscale Research Team

Compiled by: Web3 Sniffing Observation, Bijie.com

According to a report by CoinWorld, the Grayscale Research team stated that the Bitcoin and cryptocurrency markets were under pressure from multiple selling pressures in June, but the fundamentals of the assets remained almost unchanged. Grayscale Research expects that the spot Ethereum exchange-traded product (ETP) will begin trading in the third quarter of 2024. It also believes that in the absence of a major shift in the macroeconomic outlook, cryptocurrency valuations are expected to recover in the coming months.

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Crypto markets retreated in June 2024, in part because Bitcoin selling pressure triggered a decline in broader investor risk appetite, but Grayscale Research maintained a constructive outlook on the asset class.

Returns on traditional assets were mixed in June as markets priced in new risks. Some market sectors underperformed due to these risks, including U.S. home builders (due to signs of a cooling housing market), Chinese stocks and some industrial metals (due to renewed weakness in the Chinese economy), and French stocks (due to a possible change of government).

In contrast, global bonds, emerging market stocks ex-China and the S&P 500 were relatively solid, and the Swiss franc - often a barometer of rising international risk - also performed well. Bitcoin and Ethereum fell about 10% each, making them the worst performing market sectors on a risk-adjusted basis.

Chart 1: Cryptocurrency valuations retreated in June, while traditional assets had mixed performance

In Grayscale Research’s view, multiple sources of actual and expected selling pressure have contributed to Bitcoin’s decline this month. Bitcoin’s weakness also appears to have spread to other cryptocurrencies. The main new sources of selling pressure include:

Mt Gox Estate: The trustee of the Mt Gox bankruptcy estate announced on June 24 that repayments in Bitcoin and Bitcoin Cash will begin in early July 2024. As of this writing, the estate holds $8.9 billion worth of Bitcoin. It is uncertain whether creditors will convert proceeds into fiat currency and the timeframe for such conversion.

German government: A German government agency has begun liquidating bitcoins confiscated in 2013. According to data provider Arkham Intelligence, wallets associated with the German government sent nearly 4,000 bitcoins (worth about $220 million) to exchanges during June.

· U.S. Government: On June 26, the U.S. government sent 3,940 bitcoins ($240 million) to Coinbase Prime deposit accounts, which were seized from a wallet associated with a convicted drug dealer. Previously, the U.S. government’s last confirmed sale was in March 2023, when it sold 9,861 bitcoins, which were worth $216 million at the time.

U.S. Spot Bitcoin ETPs: In the second half of June, these products experienced net outflows of $581 million, having seen net inflows in May and early June.

In addition to these new sources of selling pressure, Bitcoin miners continue to reduce their holdings: According to Glassnode data, miners have sold about 1,560 Bitcoins (about $100 million) in the past 30 days. On the other hand, publicly traded company Microstrategy reportedly bought nearly 12,000 Bitcoins (worth $786 million) in mid-June, which may have supported the price of Bitcoin.

While these short-term flows may have temporarily impacted Bitcoin's price, we believe the asset's fundamentals have not changed significantly. For example, despite modest strength in the U.S. dollar, markets have priced in further rate cuts from the Federal Reserve this year and next in response to further easing in consumer price inflation. Additionally, adoption metrics for certain smart contract platforms show continued growth. For example, as shown in Figure 2, the daily active users of the ten largest constituents of our smart contract platform’s cryptocurrency sector (by market capitalization) have continued to increase in recent months.

Figure 2: Growth of daily active users of major smart contract platforms

In addition, there seems to be further progress in the listing of spot Ethereum ETPs in the US market. In late May, the Securities and Exchange Commission (SEC) approved several issuers' 19b-4 form applications to list these products on US exchanges. On June 13, SEC Chairman Gensler said that regulators may approve the remaining applications "sometime this summer." Although the timing is still uncertain, for the purpose of market analysis, Grayscale Research assumes that these products will begin trading in the third quarter of 2024.

Similar to the spot Bitcoin ETP launched in January 2024, the Grayscale Research team expects the new Ethereum product to generate significant net inflows (albeit less than the Bitcoin ETP), potentially supporting the growth of Ethereum and tokens within its ecosystem. Valuation.

Although both Bitcoin and Ethereum fell last month, they both outperformed the broader crypto market, as measured by the FTSE Grayscale Crypto Sector Index Series (see Figure 3). Our Crypto Sector Market Index (CSMI) – a measure of the performance of the entire digital asset market – fell 19% in June. The worst performing market sectors this month were the consumer and cultural crypto sectors, largely due to weakness in memecoins (tokens used primarily for entertainment value and related to internet culture). The monetary crypto sector, which includes Bitcoin, and the financial crypto sector performed relatively well.

Chart 3: Cryptocurrency industry generally down

While most token prices fell in June, a notable exception was Toncoin (TON), the third largest asset (by market cap) in the cryptocurrency segment of our smart contract platform and a component of next quarter . The TON blockchain is integrated within Telegram’s secure messaging app and has the potential to leverage Telegram’s reach of 900 million monthly active users, making it an attractive platform for app developers. Driven in part by its Open League token incentive program and the growing popularity of Telegram games, the network's number of daily active users grew from an average of 27,000 in January to more than 400,000 in June.

In addition, Tether’s USDT stablecoin was launched on the TON network in April 2024 and was quickly adopted. In March, the Financial Times reported that Telegram was considering an initial public offering (IPO), which we believe could have an impact on the value of public blockchain tokens integrated with applications.

Despite the crypto market's setback in June, Grayscale Research remains optimistic about the valuation outlook for the rest of the year. In our view, the macro backdrop is generally favorable for the crypto asset class, with economic growth, potential Fed rate cuts, and a strong stock market all supporting factors. While a U.S. recession could weigh on the crypto market, a period of slow but positive growth remains the central scenario for the economy.

Additionally, the approval of Ethereum ETPs has the potential to expose more investors to the concepts of smart contracts and decentralized applications, thereby recognizing the potential of public blockchains to transform digital commerce.