Macro expectations or a turn for the better, Ethereum ETF will bring new funds to the cryptocurrency market.
Author: Asher Zhang, Bitpush
The author expects Bitcoin to encounter a heavy blow in early July, but the balance of power will quietly shift in the latter half of July. The author has preliminarily outlined the script for July based on various information. So, what will Bitcoin rely on to turn the tide?
Dark clouds are pressing down on the city, and BTC will face heavy pressure at the beginning of the month
The U.S. and German governments have recently been selling Bitcoin and Ethereum, putting pressure on the market. At the same time, Mt.Gox is expected to begin compensation in July 2024, and Bitcoin is expected to face significant selling pressure in early July.
According to data from the blockchain analysis company Chainalysis, the U.S. government transferred approximately 3,940 bitcoins worth about $240 million to the Coinbase exchange on June 26, 2024. Market analysts believe that this is most likely the bitcoin seized from the convicted drug dealer, Paul B. Singh, in January 2024. The U.S. government currently holds about 214,000 bitcoins, worth $13 billion, and remains the largest national holder of Bitcoin. On July 1, according to Arkham monitoring, the U.S. government wallet address 16:34 transferred approximately 3,375 ETH to the address starting with 0x5ac4, equivalent to about $11.72 million.
According to Bitpush, the German Federal Criminal Police Office (BKA) began transferring approximately 11,000 bitcoins to cryptocurrency exchanges such as Kraken and Bitstamp in mid-June, worth about $72.4 million. These bitcoins were illegal gains seized by the German government in 2013. On July 1, according to Lookonchain monitoring, the German government again transferred 1,500 bitcoins ($94.7 million), with 400 bitcoins ($25.3 million) transferred to Bitstamp, Coinbase, and Kraken. Currently, the German government holds about 470,000 bitcoins, making it one of the countries with the largest Bitcoin reserves in the world. The German government has always been cautious about cryptocurrencies and has expressed concerns about their potential use in money laundering and other illegal activities. It is worth noting that the German government is in the process of formulating cryptocurrency regulations, which are expected to take effect in 2025. The German government may be hoping to send a signal to the cryptocurrency market by selling Bitcoin, indicating its stance on cryptocurrencies.
In addition to the continued selling by the U.S. and German governments, the main selling pressure still comes from Mt.Gox. According to the official website, the latest compensation plan provided by Mt.Gox to creditors includes basic and proportional compensation. The basic compensation allows claims of up to 200,000 yen to be paid in yen, while the proportional compensation provides two flexible options for creditors, namely "early lump sum repayment" or "mid-term and final repayment." The lump sum repayment method only allows creditors to receive partial compensation (about 21% of the funds they had locked on the platform during the hack), and the amount exceeding 200,000 yen can be claimed in a mixed manner of BTC, BCH, and yen, or paid in legal tender. According to the latest news, Mt.Gox is expected to begin compensation in July 2024.
Macro expectations or a turn for the better, Ethereum ETF will bring new funds to the cryptocurrency market
This article believes that several factors that can help Bitcoin turn the tide in July mainly include: the launch of the spot Ethereum ETF, macro market, technical updates, and potential support from Trump.
This week, there are many important events in the macro market, and from the current market analysis, they are expected to have a positive impact on the cryptocurrency ecosystem. On July 1, the U.S. released the June ISM Manufacturing PMI; on July 2, Federal Reserve Chairman Powell, ECB President Lagarde, and Brazilian Central Bank President Neto spoke at the Central Bank Forum held by the ECB, and the Reserve Bank of Australia released the minutes of its June monetary policy meeting; on July 3, the U.S. released the June ADP employment figures, as well as the initial jobless claims for the week; on July 4, the Federal Reserve released the minutes of its monetary policy meeting, the UK held a general election, and the ECB released the minutes of its June monetary policy meeting; on July 5, the U.S. released the June unemployment rate and the non-farm employment figures.
Adam, a macro researcher at Greeks.live, wrote on the X platform that this week (7/1-7/7) is a big week for the macro market, and the most crucial events are the U.S. unemployment rate and non-farm data on Friday. After a period of silence, the macro market is making a comeback, with important macro events every working day. In the cryptocurrency market, it is expected that the SEC may respond to the ETH ETF on July 8, which is likely to be positive news. The quarterly delivery has just ended, and the IV of major terms is very low, providing a good opportunity for building positions.
From current news, the Ethereum ETF may go live as early as early July, injecting new funds into the cryptocurrency market. Unlike the scarcity of on-chain ecology in Bitcoin, the influx of new funds into Ethereum is expected to further drive the development of the Ethereum ecosystem.
Bitcoin may see significant technical updates, and Trump is expected to help Bitcoin counterattack
The author has always believed that what drives the development of Bitcoin and the cryptocurrency industry has always been technological innovation, whether it's the past ICOs, DeFi, Layer2, or the Ordinals protocol, BRC20, and ARC20 in the Bitcoin ecosystem. This article believes that the undoubtedly driving force for the future development of Bitcoin will be the recently discussed OP_CAT.
The OPCAT feature was proposed by Ethan Heilman and Armin Sabouri in October last year, and was recently launched on the Bitcoin test network Signet and assigned the BIP-420 number. On July 1, Udi Wertheimer, CEO of Taproot Wizards and a supporter of OPCAT, said on the Xverse podcast that the probability of OPCAT being activated is "close to 100%." Many well-known figures in the cryptocurrency industry, including Anatoly Yakovenko, co-founder of Solana Labs, have added "BIP-420" to their usernames on the X platform. Taproot Wizards launched the Quantum Cats Ordinals series in February to promote OPCAT. In April, Taproot Wizards released a white paper outlining the framework for building applications using OPCAT. Earlier, Starknet stated on the X platform that it will attempt to simultaneously scale the execution layers of Bitcoin and Ethereum. It is evident that OPCAT will inject new vitality into the Bitcoin ecosystem.
In addition to technical updates, Trump may lead a wave of retail funds into the market in late July. On June 25, Axios, a technology media outlet, cited two sources as reporting that former U.S. President Trump is considering speaking at the Bitcoin 2024 conference in Nashville at the end of July. The Bitcoin 2024 conference is hosted by Bitcoin Magazine and is scheduled to take place from July 25 to 27. Representatives of Bitcoin Magazine did not respond to requests for comment.
Considering Trump's previous statements, his participation in the Bitcoin conference is not without basis. According to Bitpush's report on June 12, Matthew Schultz, Executive Chairman of the cryptocurrency mining company CleanSpark, revealed that several Bitcoin miners met with Trump at his Mar-a-Lago estate on Tuesday night. Schultz pointed out that Trump claimed to love and understand cryptocurrencies, and the presence of Bitcoin miners would help stabilize the U.S. power grid's energy supply. Trump promised to speak up for cryptocurrency miners if he were to return to the White House. In addition, Trump himself posted on his Truth Social platform that Bitcoin mining is the last line of defense for the U.S. against other central bank digital currencies, and he hopes that all remaining bitcoins can be produced in the U.S. Earlier, Trump's campaign team announced that it would accept cryptocurrency donations, seen as a high-profile embrace of the cryptocurrency industry.
Recently, Trump's high-profile announcement of support for Bitcoin may, to a large extent, be due to his election needs. After all, Bitcoin and the cryptocurrency market have a large group and capital support behind them. Cathie Wood, CEO of the U.S. investment firm Ark Invest, stated that she plans to vote for the Republican candidate and former U.S. President Donald Trump in this year's U.S. presidential election. Wood has long been a supporter of cryptocurrencies, and Trump's recent strong support for the cryptocurrency industry is a major reason for Cathie Wood's vote for Trump.
Summary
Let's summarize the script for Bitcoin in July. Overall, Bitcoin is expected to be weak in early July, mainly due to selling pressure from the U.S. and German governments, as well as Mt.Gox compensation. At the same time, the first week of July will inject some macro optimism into Bitcoin at a macro level; as the market digests Mt.Gox compensation, Bitcoin is expected to gradually strengthen; in late July, Trump is very likely to inject a stimulant into Bitcoin. At the same time, the core momentum driving Bitcoin's rise, OP_CAT, will truly drive the development of Bitcoin and its ecosystem.
Finally, from a seasonal perspective, Bitcoin is also expected to rise. According to Bitpush, analysts at QCP Capital stated in a report on Monday: "From a seasonal perspective, the median return for Bitcoin in July is 9.6%, and it often rebounds strongly, especially after a 9.85% drop in June. Many signs indicate a bullish outlook for July." Coinbase analysts David Duong and David Han stated in their weekly report: "Positive seasonal factors and improved liquidity in July may support the market."
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