Equity Rally Supports Crypto Into Weekend

Market Situation

The S&P 500 ended Friday trade almost 3 percent higher, bringing its weekly gains to about 6.5 percent, as US equities markets rebounded strongly into the weekend. Market analysts pointed to an unexpected drop in a Fed-closely watched index of US consumer inflation expectations as allawing concerns over excessive monetary tightening by US central banks and aiding the surge in stocks. Rising odds of a short-term US recession were also mentioned as generally encouraging risk taking in equities markets throughout the week. Market analysts said that this was because slower growth would result in lower inflation and less pressure on the Fed to tighten policy as aggressively.

The main lesson to be learned from this is that the increase in US equities risk appetite has allowed for additional price gains in the cryptocurrency markets, which have recently been strongly associated with stocks. The overall market capitalization of cryptocurrencies as of Saturday was about $940 billion, up roughly $60 billion this week and over 23% above the lows of the previous week, which were around $760 billion.

A break above previous weekly highs in the upper $21,000s is what Bitcoin is now chasing as it trades with a bullish bias around the mid-$21,000s. A rise toward the 21-Day Moving Average in the low $24,000s may be made possible by any such break. The weekly gains for Bitcoin are presently little over 4.0 percent. As a result of the bullish cryptocurrency attitude, altcoins are outperforming. Because of this, Bitcoin's market share in cryptocurrencies is expected to have fallen another 1% this week, to roughly 43.5 percent, from over 48 percent at the beginning of the month.

Despite the fortitude displayed this week in holding back above such a significant milestone, senior market analyst at Oanda Craig Erlam warned that "this weekend might be another trying phase for the cryptocurrency (Bitcoin)". Support continues to be tenuous below, and he cautioned that another break "may see trust in the space really put to the test."

On Friday, Ethereum surged beyond $1,200 and is now holding above this mark, bringing the weekly gains to around 8.5 percent. The door is open for a push towards the 21DMA at $1,350 if the second-largest cryptocurrency in the world by market size can break above resistance in the mid-$1,200s per token. Shiba Inu, on the other hand, has had gains of over 12 percent, pushing SHIB/USD to about $0.0000115, making it the highest performing top 20 cryptocurrency during the past 24 hours, according to CoinMarketCap. The next two top 20 performers, Avalanche and Solana, have both increased by about 7.5 percent during the last day.

Big US data releases and Fed comments are expected to fill up the whole next week. On Monday, new housing statistics and orders for durable goods will be released. On Tuesday, a widely watched poll of consumer confidence will be released. Wednesday's speeches by the Fed Chair Jerome Powell and a few other bank policymakers will be followed by the publication of the Fed's preferred inflation indicator, Core PCE inflation data for May, on Thursday. The well regarded Manufacturing PMI survey, conducted by the Institute of Supply Management, is scheduled for release on Friday.

Presently, it seems that bad economic data (anything that increases bets on a recession) and anything that suggests reducing inflation are positive for risk appetite in the stock and cryptocurrency markets. Next week, it's probably going to be like that.

Crypto Winter: FTX in Discussions to Purchase BlockFi Stake, Goldman Seeking to Purchase Celsius Assets, Bitpanda Cutting Headcount

One of the biggest and fastest-growing cryptocurrency exchanges in the world, FTX, is in discussions to buy a share in the lending and borrowing platform for cryptocurrencies, BlockFi, according to a Wall Street Journal story published on Friday. After FTX granted BlockFi a $250 million emergency credit line earlier this week, the action would further the two companies' financial ties. In light of the recent decline in cryptocurrency markets, BlockFi recently stated that it will be cutting 20 percent of its workforce.

On the other hand, the platform said on Friday that starting on July 1 it will raise deposit rates for a number of cryptocurrencies and stablecoins. BlockFi attributed the rise in deposit rates to improved risk management, a decline in market rivalry, and a shifting macroeconomic landscape.

The troubled cryptocurrency lending/borrowing service Celsius Network, a (former?) competitor of BlockFi, reportedly wants to raise up to $2 billion from investors in order to buy distressed assets from it. The company froze all withdrawals 12 days ago due to what it called "extreme market conditions." By the end of May, Celsius was managing $12 billion in assets and had disbursed more than $8 billion in loans.

Celsius has reportedly recruited restructuring advisors from Alvarez & Marsal to provide guidance on a prospective bankruptcy filing, the WSJ reported on Friday

In the meantime, Bitpanda, one of Europe's biggest cryptocurrency exchanges, revealed in a blog post on Friday that it will be reducing its staff by more than 25%, with a goal of 730. The firm currently employs more than 1,000 people, according to LinkedIn. The exchange's founders said that their earlier rapid development speed was a mistake and cited the current downturn in market circumstances as the reason behind the choice.

Keeping with exchanges, the biggest cryptocurrency exchange in the world, Binance, revealed on Friday that it will be launching a brand-new, cutting-edge platform for accredited investors, which it would name Binance Institutional. In addition to over-the-counter liquidity, algorithmic trade execution, immediate pricing, and cutting-edge digital asset custody solutions, Binance said that its new platform will also provide.

In spite of the continuing market slump, Binance has so far shown to be one of the most robust cryptocurrency companies. Changpeng Zhao, CEO of Binance, stated that the business will keep hiring even while many competing exchanges reduced their workforces. In an effort to draw in more customers, the business last week announced that it will do away with spot Bitcoin trading fees on its Binance.US platform. In light of recent market volatility, Zhao stated on Friday that the company is considering 50 to 100 transactions from cryptocurrency companies.

Analysts doubt the US SEC will approve the Spot Bitcoin ETF, while Sky Mavis has begun compensating Ronin hack victims

The recent lowering of the GBTC discount to the Bitcoin price has some cryptocurrency market observers hopeful that the US Securities and Exchange Commission (SEC) would soon approve a spot Bitcoin Exchange Traded Fund (ETF). However, some experts are pessimistic. Both the Bitwise Bitcoin ETP Trust and Grayscale Bitcoin Trust applications, which are scheduled for SEC determinations on June 29 and July 6, are "very unlikely" to be approved, according to Bloomberg Intelligence analyst James Seyffart in an interview with CoinDesk.

Until "a'market of considerable scale' has surveillance-sharing agreements or is regulated by the likes of the SEC or CFTC," according to Seyffart, the SEC will not approve any spot Bitcoin. The SEC has said clearly what it wants to see. The SEC won't authorize a spot bitcoin ETF until a "spot Bitcoin exchange or possibly many spot Bitcoin exchanges come under the authority of the SEC and/or CFTC," he told CoinDesk.

Nate Geraci, president of The ETF Store, made a comparable statement. Geraci said that given the absence of governmental monitoring of cryptocurrency exchanges, "the overwhelming market belief is that the SEC would reject these ETFs."

In other news, Sky Mavis, the company behind the play-to-earn game Axie Infinity, stated that it will start compensating victims of a $625 million Ronin bright hack on June 28. Hackers stole 25.5 million USDC and 173,600 ETH back in March. Due to the recent significant decrease in Ethereum, Sky Mavis will only be able to reimburse hack victims for $216.5 million worth of cryptocurrency.