Market Spotlight: Crypto Surges as Institutions Eye Spot Bitcoin ETF

Join CCData as we explore the latest trends in the digital asset industry through our market-leading data solutions and insights . In this week’s Market Spotlight, we delve into June’s financial saga, from the FED’s hawkish stance to Blackrock’s Bitcoin ETF application — as traditional finance giants look to enter the crypto scene, shifting market sentiment and trading volumes. We also examine rising Bitcoin dominance, which recently surpassed 51%, as well as market liquidity on US exchanges, which, in some cases, has declined by over 70%. State of the Market: FED Still Hawkish June has been a significant month, both in terms of global macroeconomics and within the digital asset markets. Following the aversion of a debt ceiling crisis, the FOMC rate decision was confirmed on June 13th. The FED paused rate hikes for the first time since they began their aggressive hiking approach in March 2022. However, although a hiking pause signals some breathing room for the markets and could be interpreted as dovish, the pause coincided with the FED revising their dot plot upwards, signalling their expectation of at least two more hikes by the end of the year, signalling a peak rate of 5.6%. https://medium.com/media/816b230d432e285db812e9021b0fc728/href Over the past few days, there have been positive developments for Bitcoin from an institutional perspective. Blackrock, the largest asset manager in the world, announced their application for a spot bitcoin exchange-traded fund (ETF), which set off a flurry of reapplications from previously unsuccessful attempts. Blackrock’s application is the most significant yet, given that their success rate for ETF approval sits at 99.86%, with 575/576 being approved. When the first Gold ETF was approved, it was the catalyst required to send Gold on a multi-year bull run. Bitcoin had been significantly underperforming the S&P500 since Q2 began, however, the flurry of positive news has recently caused the gap to close. Since BTC began its recovery, stocks have begun to decline, likely due to the hawkish outlook on monetary policy. This further solidifies the recent trend of falling correlation between SPX and BTC. https://medium.com/media/e600d14b8c030e72f2f7ecc563e89478/href Bitcoin Dominance Surpasses 50% Bitcoin experienced a price drop in June, opening at $27,220 and reaching a low of $24,762 on the 15th. However, it has since made a recovery, breaking the $30,000 level. The last time Bitcoin reached this level was in April 2023, when it recorded a high of $30,776 on the 21st. This revival resulted in a maximum return of 9.82% for Bitcoin in June (data up till the 22nd). Unlike previous Bitcoin bull runs, the bullish movement this time was not driven primarily by short liquidations, but rather by genuine buying pressure. This buying pressure was evident across various exchanges, with Binance witnessing a significant increase in BTC-USDT trading volumes. CCData Trade Data highlights the substantial buy orders for the BTC-USDT pair. https://medium.com/media/858499280b62a194097ae3202e7ac3c1/href Bitcoin dominance has recently reached recent highs, surpassing the 51% mark. The chart below illustrates the returns in June(up to the 21st) and emphasizes the exceptional performance of Bitcoin compared to other asset baskets, which have all experienced negative returns thus far in June. Among these asset baskets, the metaverse basket exhibited the most significant negative returns, followed by meme coins, infrastructure, and the SEC lawsuit case basket, which includes assets categorized as securities by the SEC. https://medium.com/media/18c04c6e01084e289d31fa0f67f2c379/href In terms of derivatives, Bitcoin futures maintained their upward momentum, as evidenced by the increase in open interest from $8.36bn at the beginning of June to $9.80bn on the 22nd. On the other hand, Ethereum open interest (ETH) remained relatively stable, with an average value of $5.05 billion. https://medium.com/media/03423a7206c5d6f196c3b6624bb15a48/href In addition to Bitcoin and Ethereum, other digital assets that saw a positive performance in June included STX by Stacks, a Bitcoin Layer2 solution, MKR by MakerDAO, which powers the major decentralised stablecoin DAI, and LUNC. The assets achieved returns of 24.8%, 14.5%, and 7.92%, respectively. https://medium.com/media/506fc92da0d81309b568a4893c67c865/href U.S. Exchanges See Market Liqudity Decline The last couple of weeks have shown how the sentiment can shift in the crypto markets within a matter of days. Earlier in the month, the outlook was bleak as a result of the US Securities and Exchanges Commission (SEC) filing lawsuits against two of the largest centralised exchanges in the industry, Binance and Coinbase. However, the week after saw the entry of the biggest TradFi players with Blackrock, Invesco and Valkyrie filing for Bitcoin spot ETFs, and the launch of EDX Crypto Exchange, backed by Citadel Securities, Charles Schwab, and Fidelity Digital Assets. The EDX Markets also adopts the TradFi model of exchanges in that they are a non-custodial exchange that trades crypto assets via other financial intermediaries, similar to how NYSE and Nasdaq operate. The recent news has helped bolster positive sentiment in the market which was accompanied by an increase in trading activity on centralised exchanges. Comparing the market share of centralised exchanges based on the monthly trading volume in May and June, the biggest gainers in market share were DigiFinex, P2B, and Bybit. These exchanges increased their market share by 1.89%, 0.74% and 0.42%. The centralised exchanges that lost the most market share during this period were DCoin, OKX, and Bequant, which saw their market share fall by 0.97%, 0.91% and 0.84%. The major centralised exchanges, including Binance, Binance US, and Coinbase, have all seen their market share decline from the previous months, falling by 0.48%, 0.67%, and 0.10% in market share, respectively. https://medium.com/media/c1b4a4da5e5b5872af2dabd61663ec38/href Looking at the 1% market depth of BTC trading pairs, which is often the most traded asset on centralised exchanges, we can see an increase in liquidity on Coinbase by 6.2% since the lawsuit against Binance US on June 5th. Comparatively, Binance.US and other US exchanges, including Kraken and Gemini, have seen their market liquidity decline by 90%, 26% and 34%, respectively. This suggests that many US-based traders and market makers have sought refuge in the largest US exchange. https://medium.com/media/9bd0ad8e57cdb83625df3f1ef63f64ba/href In case you missed it, CryptoCompare is proud to announce the expansion of its data, index and research solutions under a new brand, CCData! You can now find all of our blogs, charts and research reports at CCData.io ! Want to access the data used in this blog? Our data solutions provide crucial real-time information necessary for tracking market movements, complete with tick-level trade history across all covered instruments and markets, at the highest granularity provided by each exchange. Learn more about CCData’s market-leading data solutions below. CCData | Leading Digital Asset Data & Index Provider Market Spotlight: Crypto Surges as Institutions Eye Spot Bitcoin ETF was originally published in CCData on Medium, where people are continuing the conversation by highlighting and responding to this story.