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ETFS 21Shares Crypto Monitor - 6th July 2022

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This Month in Crypto: Executive Summary

The overall cryptoasset market capitalization is standing at $895B, down by 35% from $1.38T recorded by the end of May. Bitcoin’s valuation shattered by almost 40% in June, its second-worst month ever, while Ethereum is down by 48%. The best winners of June’s rally are Cardano and XRP, who dipped by 22% and 25% since last month. As the war intensifies between Russia and Ukraine, the grip tightens on resources, and purchasing power dwindles and goes hand-in-hand with the global food crisis into another era. A pending recession may become a reality — affecting the public equity market. The S&P 500 and Eurostoxx 600 recorded their worst first half since 1970 and 2008 respectively. Regarding factors driving the market from within, there’s been a “contagious” liquidity crisis affecting various companies and funds in the aftermath of the Terra/Luna collapse, with bigger crypto companies like FTX stepping in as a buyer of last resort, and in some cases, walking away.

Come what may, the crypto industry is on build mode as it has always been during its past bear markets. However, this time the industry has the leverage of institutional recognition and backing. Onchain data indicates that investors may be taking on the opportunity of the market drawdown, Michael Saylor for instance bought $10M worth of Bitcoin over the past month.

Figure 1. Bitcoin Monthly Performance

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Source: TradingView

Key Takeaways From This Report:
  • Grayscale takes the SEC to court

  • Compass Mining’s CEO and CFO resign amid liquidity issues

  • FTX buys BlockFi, walks out on Celsius

  • KPMG sets up a collaboration hub on the metaverse

  • Solana’s fifth outage this year, two companies step in

Macro, Regulations; Spot, and Derivatives Markets

US President Joe Biden blamed high inflation on the fact that nine foreign-owned shipping companies have been raising prices since the pandemic, making profits seven times higher than the year before. On June 15, the Federal Reserve raised interest rates by 75 basis points; the biggest rate hike in 28 years. A day after, Biden signed the “Ocean Shipping Reform Act of 2022” to crack down on industry fees. While this measure aims to reduce inflation, at least marginally, it’s a big indicator that the suppl