Author: Greythorn
Introduction
Welcome to Greythorn Asset Management's monthly market update for June 2024. We are pleased to share with you our observations and analysis of current market trends. Our mission is to invest in breakthrough technologies and asset classes that aim to generate significant value and positively impact industries. At Greythorn, we provide monthly updates on the cryptocurrency market, including detailed analyses of market dynamics, regulatory developments, and macroeconomic factors affecting digital currencies. For more information about our work and additional insights, please visit our website.
Market Analysis
Bitcoin in July: Surge in Price and Market Sentiment
July was a notable month for Bitcoin, with significant improvements in both price action and market sentiment compared to the previous month.
Investors continued accumulating crypto assets, the University of Wyoming launched a Bitcoin Institute, and Cantor Fitzgerald announced plans to launch a Bitcoin financing business, allowing clients to leverage their BTC holdings. Politically, Trump reiterated his support for the industry at the Bitcoin 2024 conference in Nashville, suggesting relocating all Bitcoin mining to the U.S., pledging to fire SEC Chair Gary Gensler, and intending to establish a presidential advisory committee on Bitcoin and cryptocurrencies.
Source: Forbes
Senator Cynthia Lummis proposed a bill to establish a strategic Bitcoin reserve aimed at reducing U.S. debt. Meanwhile, reports indicated that Vice President Kamala Harris’s team reached out to representatives from the crypto industry, including those from Coinbase, Ripple, and Circle, to improve relations. Overall, July brought a wave of positive news and actions, boosting Bitcoin’s market performance and sentiment.
Ethereum ETF Approval Boosts Price and Sentiment
Late July marked a significant milestone for Ethereum with the approval and launch of spot Ethereum ETFs on July 23, 2024. The ETH spot ETFs exceeded expectations on their first day, recording over $100 million in net inflows—an impressive feat considering strong outflows from Grayscale’s $ETHE fund. Total trading volume surpassed $1.1 billion, roughly a quarter of BTC spot ETFs’ debut volume—outperforming expectations. BlackRock’s $ETHA achieved a daily trading volume equivalent to a quarter of its $IBIT BTC fund.
Source: @JSeyff
However, the next day saw significant net outflows between $113 million and $133 million, primarily driven by heavy selling from Grayscale’s Ethereum Trust, which experienced $326.9 million in outflows.
Nonetheless, ETH performed better than expected—at least for now. This could indicate high market expectations for net inflows into spot ETH ETFs next month or reflect a technical rebound following prior declines. Overall, July showed a surge in Ethereum’s price action and market sentiment, fueled by ETF approval and evolving political dynamics.
Source: TradingView
Altcoins: Mixed Performance and Sentiment
July was a mixed month for altcoin performance and market sentiment.
Some altcoins posted significant gains, including $MANTRA (+64.8%), $HNT (+53.2%), $JUP (+41.4%), $SOL (+33%), $TAO (+27%), and $PYTH (+23%), driven by positive developments within their respective ecosystems. For example, projects within the Solana ecosystem outperformed the broader market in July.
However, not all altcoins enjoyed such positive momentum. Several experienced price stagnation or declines, notably $FLR (-21.8%), $FTM (-16.7%), $LDO (-15.0%), $AKT (-13.9%), and $TON (-13.6%).
Overall, while some altcoins excelled in July, others faced challenges, leaving investors cautious yet hopeful, potentially watching for signs of sustained growth. Interestingly, monthly trading volumes on decentralized exchanges (DEXs) like Uniswap and Curve reached an all-time high relative to centralized exchanges (CEXs) such as Coinbase and Binance. This surge occurred as CEX volumes declined, while DEX volumes reversed their downward trend in July.
Source: The Block
Macro Insights
Equity Market Correction: Mid-July Sell-Off
The S&P 500 and Nasdaq experienced a sharp sell-off in mid-July after strong early-month rallies. While this correction was severe, it can be viewed as a natural pullback from prior highs. Markets currently stand at a crossroads, with mixed signals of economic slowdown versus strong business conditions, compounded by political uncertainty. Investors remain cautious, balancing optimism against the reality of market volatility.
Source: TradingView
Latest Statements from Fed Chair Powell
Federal Reserve Chair Jerome Powell recently discussed the U.S. economic outlook, noting that no decision has been made yet regarding a potential rate cut in September. The Fed is closely monitoring risks on both fronts of its dual mandate and will assess upcoming data to guide future decisions. Although Q2 inflation data boosted confidence, Powell emphasized caution to avoid weakening the economy prematurely.
Additionally, U.S. job openings in June totaled 8.2 million, exceeding expectations (8.2M vs. 8.0M), indicating that the anticipated labor market slowdown remains in early stages. However, fewer than 65% of industries saw employment growth—the lowest level since the pandemic—suggesting potential headwinds ahead.
Source: Warren Pies
China’s Policy Focus: Rate Cuts and Tech Investment
China’s recent rate cut, though only 0.1 percentage points, signals the government’s cautious approach to stimulating the lending market. This adjustment in a key policy rate reflects a focus on “quality growth” and a reluctance toward aggressive fiscal measures to prevent speculation. It implies limited near-term catalysts for crypto trading. The Third Plenum statement signaled a shift toward a “socialist market economy,” including flexible real estate policies and support for private enterprises. Notably, emphasis was placed on technology, aiming to surpass U.S. capabilities. This focus on technologies including web3 and blockchain highlights China’s long-term strategy for economic strength and innovation.
Source: Reuters
Coinbase Faces Campaign Finance Violation Scrutiny
Coinbase may face trouble after donating $25 million to the Fairshake Super PAC, potentially violating federal campaign finance laws. This large donation, made while Coinbase negotiates federal contracts, raises concerns about legal and regulatory risks within the crypto space. This situation underscores the challenges crypto firms face navigating political influence while complying with regulations. The controversy could have lasting implications for Coinbase and the broader crypto industry, highlighting the importance of strict legal and ethical compliance.
Japan Embraces Crypto ETFs and Raises Interest Rates
Japan is set to launch its first crypto ETFs, a major development driven by a collaboration between Franklin Templeton and SBI Holdings. This partnership combines Franklin Templeton’s extensive experience in traditional financial markets with SBI Holdings’ expertise in crypto, offering Japanese investors an innovative and accessible pathway into digital assets.
The launch of these ETFs is expected to attract significant interest, particularly from retail investors. A key advantage driving demand is the more favorable tax treatment of ETFs compared to direct crypto ownership, making them a more attractive investment vehicle. By simplifying the investment process and reducing tax burdens, these ETFs offer individuals a more convenient and cost-effective way to gain exposure to the booming crypto market.
Interestingly, the Bank of Japan raised rates by 0.15 basis points—the second hike in nearly two decades. This move signals a shift toward more active monetary policy management, supporting economic growth and influencing global markets. Japanese government bond yields rose, and the yen strengthened against the U.S. dollar. This move is particularly noteworthy as Europe and China are cutting rates. Japan, as the largest holder of U.S. Treasuries, may be the only country still raising rates.
Conclusion
Looking back at July, we observed significant developments in both cryptocurrency and traditional financial markets. Bitcoin and Ethereum exhibited volatile performance, driven by positive regulatory and political news, along with the introduction of new financial products like ETFs. Altcoins showed mixed results, with some demonstrating growth potential within their ecosystems,
while others faced challenges. As we enter August, markets are expected to remain volatile yet full of opportunities. We remain committed to providing you with concise and insightful updates. The crypto landscape evolves rapidly, and while we strive to deliver comprehensive monthly overviews, we encourage you to conduct your own research for deeper understanding.
Thank you for reading this month’s update. We hope you found it helpful. Stay tuned to our social media channels for more real-time updates and insights.
Disclaimer
This presentation has been prepared by Greythorn Asset Management Limited (ABN 96 621 995 659) (Greythorn). The information contained herein should be regarded as general information only and not as investment or financial advice. It is not an advertisement nor an invitation or offer to purchase or sell any financial instrument or to engage in any particular investment strategy. In preparing this document, Greythorn did not take into account the investment objectives, financial situation, or particular needs of any recipient. Recipients should consider their own personal circumstances and seek professional advice from an accountant, lawyer, or other advisor before making any investment decision. This presentation contains statements, opinions, forecasts, projections, and other materials (forward-looking statements) based on various assumptions. Greythorn has no obligation to update this information. These assumptions may or may not be correct. Greythorn and its officers, employees, agents, advisors, or any other persons mentioned in this presentation make no representation or warranty as to the accuracy or likelihood of realization of any forward-looking statements or the validity of the underlying assumptions. Greythorn and its officers, employees, agents, and advisors make no guarantees, representations, or warranties as to the accuracy, completeness, or reliability of the information contained in this presentation. To the fullest extent permitted by law, Greythorn and its officers, employees, agents, and advisors shall not be liable for any loss, claim, damage, expense, or cost arising from or related to the information in this presentation. This presentation is the property of Greythorn. Receipt of this presentation constitutes agreement by the recipient to keep its contents confidential and not to copy, provide, disseminate, or disclose any information without prior written consent.
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