Weekly recap: сrypto market bounces back after fall, bitcoin volatility hits a new record

Crypto market in numbers

May turned out to be one of the worst months for bitcoin – BTC’s price fell by as much as 35.5% just after hitting its all-time high in mid-April. This is, by all means, the largest drop witnessed in crypto market history, as a result of which BTC’s price has fallen by more than $20,000.

As of May, the 30-day BTC volatility index is more than 6%, which is slightly higher than February’s value of 5.8%. Prior to this, the last significant increase in bitcoin’s volatility was in March-April 2020, when the index exceeded 10%.

However, May has not been so negative for all cryptocurrencies. For instance, Dogecoin (DOGE) and Ethereum (ETH) have fallen in price by only -3.88% and -2.44%, respectively. Cardano (ADA) and Ethereum Classic (ETC) have even grown by 28% and 91.98%.

The market has been flat over the last week – after the sale on May 20th, traders’ activity has declined, which resulted in a volume decrease. According to CoinGecko, daily volumes on June 1 decreased by almost 3 times compared to May 20.

The Cryptocurrency Fear and Greed Index is still in the ‘Extreme Fear’ zone. On May 30, it fell to 10 points, which is the lowest since March 2020.

Gainers of the week (May 26th – June 2nd 2021)

Losers of the week (May 26th – June 2nd 2021)

The most traded coins (May 25th – June 1st 2021)

TOP crypto market driving factors

Bitcoin (BTC) and the overall crypto market

▼ 26.05.2021 – Media: Iran bans cryptocurrency mining until late September.

▲ 26.05.2021 – ARK Investment subsidiary, ARK Cryptocurrency, buys almost $20 million in bitcoin.

▲ 27.05.2021 – SEC begins formal review of Fidelity and SkyBridge Bitcoin ETF applications.

▲ 27.05.2021 – Chainalysis: whales bought 77,000 bitcoins last week. Santiment confirms: Bitcoin addresses with 100 to 10,000 bitcoins accumulated approximately 30k more BTC over the week.

▲ 28.05.2021 – The VanEck Vectors Bitcoin ETN and VanEck Vectors Ethereum ETN to be listed on Euronext Stock Exchanges in Amsterdam and Paris.

▼ 31.05.2021 – Glassnode: bitcoin loses another $1,000 as short-term holders keep getting rid of their BTC.

▲ 31.05.2021 – Tether prints $3 billion USDT. The total capitalization of stablecoin approached $62 billion.

▲ 31.05.2021 – China’s central bank to raise financial institutions’ required reserves for foreign-currency deposits from 5% to 7%. The subsequent expected depreciation of the yuan may lead to a capital runoff from the country, including the cryptocurrency market.

▼ 01.06.2021 – Skew: open interest in CME Bitcoin futures is at lows not seen since the beginning of the year.

Ethereum (ETH)

▲ 27.05.2021 – Ethereum options volume keeps hitting new ATHs, taps $15 billion in May.

▲ 27.05.2021 – WisdomTree files Ethereum ETF application as Bitcoin bids await the SEC’s decision.

▲ 27.05.2021 – A major Mid-Atlantic restaurant and convenience chain, Sheetz, is going to enable digital currency payments in BTC, ETH, LTC, and DOGE.

▲ 29.05.2021 – The number of Ethereum wallets holding 0.01+ ETH rises to a record high of more than 15.7 million addresses.

▲ 31.05.2021 – Ex-head of China’s digital yuan effort says CBDCs could operate on Ethereum.
Dogecoin (DOGE)

▼ 25.05.2021 – Elon Musk said that he has little control over Dogecoin development.

▲ 27.05.2021 – A major Mid-Atlantic restaurant and convenience chain, Sheetz, is going to enable digital currency payments in BTC, ETH, LTC, and DOGE.

▲ 27.05.2021 – Listed Canadian firm Hello Pal buys Dogecoin and Litecoin mining startup for $3.5 million.

▲ 28.05.2021 – Dogecoin whale activity slows down as billions of dollars depart blockchain.

▼ 29.05.2021 – Founder and CEO of Digital Currency Group, Barry Silbert: Dogecoin will fall below $1 billion market capitalization.

Ripple (XRP)

▲ 27.05.2021 – Ripple intends to go public following the SEC lawsuit, says CEO Brad Garlinghouse.

▲ 27.05.2021 – Ripple is headhunting for a recruit in push to bring XRP ledger to central banks and DeFi.

▲ 27.05.2021 – SEC attorney moves to withdraw from the Ripple case.

▲ 28.05.2021 – XRP holders stage protest outside SEC headquarters, demanding to ‘stop the war on cryptocurrency’.

▲ 28.05.2021 – S.D.N.Y. denies SEC access to Ripple’s legal advice. The court has set July 2nd 2021 as the deadline for the initial discovery phase.

Cardano (ADA)

▲ 28.05.2021 – Cardano launches first Alonzo smart-contract testnet, Alonzo Blue.

Litecoin (LTC)

▲ 27.05.2021 – Litecoin payments are now supported by Protonmail online shop and Venmo app.

▲ 27.052021 – A major Mid-Atlantic restaurant and convenience chain, Sheetz, is going to enable digital currency payments in BTC, ETH, LTC, and DOGE.

▲ 27.05.2021 – Listed Canadian firm Hello Pal buys Dogecoin and Litecoin mining startup for $3.5 million.

Stellar (XLM)

▲ 26.05.2021 – The Stellar Development Foundation invests $15 million in AirTM, a digital wallet and peer-to-peer exchange platform based in Mexico.

Uniswap (UNI)

▲ 26.05.2021 – Uniswap v3 and v2 surpass Bitcoin miners by fee income.

▲ 27.05.2021 – Uniswap users support the launch of the exchange on the second level of the Arbitrum network.

Crypto market trends

Bitcoin is losing its dominance

? Such statements are increasingly heard from mass media as well as the industry and big capital representatives that are interested in crypto.

? In an interview with CNN, Vitalik Buterin has stressed that Ethereum is considered to be the main contender for the title of the world’s top crypto.

? According to CoinGecko, Ethereum has overtaken Bitcoin in trading volumes in recent weeks, but CoinMarketCap data does not prove this fact.

? Traditional financial exchanges have started launching more Ethereum-based derivatives and exchange products due to increased attention from large-cap companies. The Euronext Stock Exchange has listed Bitcoin and Ethereum ETNs. And the WisdomTree fund has filed an application with the SEC to launch an Ethereum ETF.

? In May, Ethereum surpassed Bitcoin in terms of mining profitability.

CBDC and stablecoins

? It is expected that national digital currencies will start merging with stablecoins and altcoins. The former Head of Digital Yuan Project admits the possibility of cooperation between governments of different countries with private companies, namely with Ethereum and Diem (formerly Libra from Facebook) on CBDC development. Similar intentions have also been announced in the US, EU and UK.

? Christian Catalini, the chief economist at the Diem Association, has announced that stablecoin developers are ready to cooperate with regulators. The project is positioned as a temporary alternative to the digital US dollar.

? USDC is catching up with USDT. According to Coin Metrics, USDC supply has grown faster than that of Tether since early 2021, showing an even greater increase over the past month.

? In May, Circle closed its $440 million funding round. As reported by The Block, the company plans to enter the stock market via the SPAC deal, bypassing the IPO process. The expected target valuation is said to be $4 billion.

Regulation

? Considering the major fall of crypto prices, regulators, in particular, representatives of the central banks of Ireland and Japan, have begun to argue against their use. The Chinese news agency Xinhua has released an article on crypto that describes the risks of trading digital assets.

? Germany and the United States have also announced the tightening of market control.

? It is assumed that the latest BTC price fall may force the US Securities and Exchange Commission (SEC) to prevent the launch of a bitcoin ETF at the request of VanEck.

? Ukrainian and British law enforcement officers started talking about the use of cryptocurrencies by criminals.

?The United States proceeds with regulation tightening. Authorities announced that taxpayers can use offshore cryptocurrency exchanges and wallet providers to hide assets and taxable income. Therefore, the United States intends to expand the requirements for foreign cryptocurrency exchanges and brokers concerning the transfer of information about account holders to the international information exchange network.

? The Financial Crimes Enforcement Network (FinCEN) plans to study how blockchain privacy technologies used by some anonymous cryptocurrencies work. The agency realises the potential benefits of such technologies and emphasises that it supports responsible innovation.

Major investors

? Large-cap companies maintain their interest in cryptocurrencies. Coven, a US independent investment bank, has raised over $46 million for a new digital asset fund. Andreessen Horowitz, a Silicon Valley venture giant, plans to launch a third cryptocurrency fund with $2 billion in assets, according to media reports.

? The Fidelity investment firm has raised $102 million for its Bitcoin fund since its launch in August 2020. According to the latest reports, the Fidelity fund has become one of the largest in its category.

? US billionaire and one-time cryptocurrency skeptic Carl Icahn says that he may invest over $1 billion in cryptocurrencies, mentioning Bitcoin and Ethereum.

? BlackRock CEO Larry Fink says the company is studying the potential of cryptocurrencies to serve as long-term investments.

Acceptance of cryptocurrencies

? Apple is looking for a Business Development Manager with working experience in digital wallets and cryptocurrencies to lead Alternative Payments Partnerships.

? Singapore’s largest bank DBS issued an $11.3 million digital bond in its first security token offering (STO). According to the head of DBS’ Capital Markets Group, Eng-Kwok Seat Moey, the bank expects tokenisation to become more mainstream as its clients start to embrace STO issuance as part of their capital fundraising exercise.

? BNY Mellon has just established a digital hub in Ireland allowing its clients to hold, transfer and issue digital assets, the Irish publication detailed.

EXMO news

Polkadot (DOT) is now listed on EXMO and currently available paired with BTC, USDT, and USD. As of June 2, DOT is in the top 10 cryptocurrencies with a capitalization of $23.9 billion, and its trading volume exceeded over $2 billion.

That’s all for this week! Follow EXMO on YouTube, Twitter, and Telegram to stay tuned to the main events and trends in the crypto market.