The cryptocurrency space in the month of June 2022, saw the market return to levels not traded since November 2020, with the market sell-off intensifying as a result of central bankers’ increasing contractionary monetary policies to curb the ever-increasing and worrying inflation rate. This saw the market lose its trillion-dollar status as investors diverted funds to less-risker assets.
The month ended up being a bearish month for the cryptocurrency space as flagship cryptocurrency asset, Bitcoin traded as low as $17,708.62 on the 18th day of the month, marking a new yearly low for the asset. It began trading from $31,792.31 at the beginning of the month and ultimately ended the month at $19,784.73, representing a 37.77% loss, the biggest monthly decline seen since May 2021.
Bitcoin traded at a peak of $ $31,957.28 at the beginning of the month, however, in the last two weeks of the month, we witnessed a significant decline in the market that sent Bitcoin to trade below the $20,000 zone. Bitcoin’s market dominance ended the month at 42.11%, down by 4.13% from the 46.24% seen at the beginning of the month.
The cryptocurrency market capitalization in the month of June, lost its trillion-dollar status. The industry declined by 34.54% for the month, from $1.31 trillion at the start of the month to end the month at $855.6 billion. The cryptocurrency market capitalization traded as low as $793 billion in the month of June.
The Altcoin market experienced similar declines, losing 29.51% in June, from approximately $702 billion to currently stand at $495 billion at the end of the month, falling below the $500 billion mark. During the month of June, we saw the altcoin market capitalization traded as low as $452 billion.
Highlights for the month of June
The month started with data from Compass Mining revealing that Bitcoin miners are selling off their mined tokens as the tumbling price of bitcoin erases profit margins for these miners. According to Compass Mining, a Bitcoin mining service company, that sourced data from CoinMetrics, revealed that miner flows to exchanges have reached their highest point since January 2022.
After this, we got more bearish news as recent data from Dove Metrics show that not only are retailers losing money, venture capital firms that have invested in the space are also suffering from the devastating effect of the recent bear market seen in the market. According to new data released by Dove Metrics, total venture capital investment in crypto declined 38.2% over the past month, from $6.8 billion in April to $4.7 billion in May. However, these funds have gained 97.8% since last year.
Also in June, we got word that the United States Securities and Exchange Commission (SEC), according to a Bloomberg report, is investigating whether Binance Holdings, of the largest cryptocurrency exchanges in terms of volume and value of the transaction, broke securities rules when it launched its BNB token in an initial coin offering (ICO) five years ago.
According to new research from one of the big four accounting firms, PricewaterhouseCoopers, popularly known as PwC, traditional hedge funds are slowly embracing cryptocurrency investments but are keeping their exposure limited as the market continues to mature and also considering the current bearish trend. PwC said roughly one-third of traditional hedge funds surveyed are already investing in digital assets such as Bitcoin (BTC).
CEL, the native token of the Celsius platform, a crypto lending service company, has crashed by over 50% in the last 24 hours as the company announced early Monday it would pause withdrawals, citing “extreme market conditions.” The company announced it would also pause its swap and transfer products, according to a blog post. It did not provide a timeline for resuming withdrawals.
Coinbase, the third-largest cryptocurrency exchange by daily volume, through its CEO, Brian Armstrong, officially announced on Tuesday that he has made a decision, which he described as difficult, to reduce the size of the Coinbase team by about 18%, representing 1,100 employees, due to a potential economic recession.
The total supply of stablecoins saw its sharpest drop in history during Q2 2022, which according to data analytics firm, CoinMetrics, is attributable to the stablecoin redemptions spiking as a result of short-term liquidity and concerns about insolvency that were not present during the panic of 2020.
Circle’s USD Coin (USDC), the second-largest stablecoin by market capitalization, is taking a run at the title of the top stablecoin in the cryptocurrency space as data from Messari, a cryptocurrency market data tool, revealed that the USDC daily ‘real volume’ on the Ethereum network has doubled that of Tether’s USDT.
A popular product on the Harmony network was exploited for over $100 million worth of cryptocurrencies last night in what is one of the biggest crypto hacks in recent weeks. The Horizon bridge allows users to exchange assets, such as tokens, stablecoins, and NFTs, between Ethereum, Binance Smart Chain (BSC), and Harmony blockchains.
The major talk of the month is a report of an order by a British Virgin Islands court for the liquidation of a cryptocurrency hedge fund, Three Arrows Capital, because of the liquidity and default issues the firm has been facing.
With the current bearish trend seen in the market, here is a look at 5 cryptocurrencies investors should watch out for in July 2022:
Bitcoin’s BTC
Glassnode’s latest report explains the current market performance and what on-chain metrics is saying about the net accumulation of the flagship asset. It begins by stating, “The digital assets market has recently experienced a widespread deleveraging event, which has driven many valuations to lows considered extreme, in both a historical and statistical context.”
In terms of net accumulation, the report reads, “The Accumulation Trend Score metric continues to return high values in excess of 0.9 throughout the month of June. This is being primarily driven Whale (>10k BTC) and Shrimp (< 1BTC) entities adding meaningfully to their on-chain balance.” This suggests that investors are taking advantage of the low prices in an attempt to, “buy the dip.”
However, there is still cause for concern as the Dormancy flow, which Glassnode defines as a metric that weighs the Market Cap against coinday destruction (HODLers spending), is at an all-time low. It reads, “Dormancy Flow has hit what is effectively an all-time-low (we are discounting pre-2011 early data) … What this metric is signalling that the Bitcoin Market cap is now very low relative to the value of coinday destruction. In other words, the asset is trading below implied fair value given the value that HODLers are liquidating. This is generally the case when the oldest coins that are being spent, are from the current cycle (i.e., old, but not ancient).”
Bitcoin ended the month trading $19,784.73.
Cardano’s ADA
Cardano is one of the biggest blockchains to successfully use a proof-of-stake consensus mechanism, which is less energy-intensive than the proof-of-work algorithm relied upon by Bitcoin. Although the much larger Ethereum is going to be upgrading to PoS, this transition is only going to take place gradually.
Cardano has so far, proven to be what it promised to be. The network, as of the time of this writing, currently leads Ethereum blockchains in terms of transaction volume in the last 24 hours. This has been the trend for the past 4 months as the blockchain offers significantly less transaction fees than Bitcoin and Ethereum.
However, during the month of June, Input Output Hong Kong (IOHK), the blockchain engineering firm behind the Cardano network, released some disappointing news, announcing a one-month delay to the long-awaited Vasil upgrade. The Vasil upgrade is set to provide a “massive performance improvement to Cardano” and its smart contract capabilities, according to Cardano co-founder Charles Hoskinson. It was previously slated to go through on June 29. However, the latest estimate is now set for the last week of July.
ADA ended the month trading $0.4588.
Ethereum’s Ether
In the digital assets space, Ethereum remains the largest smart contract platform, hosting a plethora of financial products, innovation, and automation, with varying degrees of decentralization (generally referred to as DeFi). The price of the Ethereum native token ETH has dropped in the month of June to trade as low as $896.11, coming 81.36% off the $4,808 all-time-high. As a result of the selloff, the entire Ethereum ecosystem is currently experiencing a historical de-leveraging event.
Reports from Glassnode reveal that there has been a decline in network activity on the Ethereum blockchain, using a price drawdown metric. It reads, “There were somewhat early signals that a decline in Ethereum usage and network demand was underway following the Nov ATH. Both the daily transaction count (pink), and the average gas price paid (blue) have been in a near 6-month macro decline. This suggests that overall activity, demand, and usage of the Ethereum chain was softening.”
The report concluded by stating, “The Ethereum holder-base is now firmly underwater, with heavy unrealized losses on HODLed coins, and historically large losses being locked in over recent weeks. This signals a high degree of financial pain exists in the investor-base and whilst dire, it still has not yet reached the extreme lows of profitability and price drawdown seen in the 2018 bear cycle.
“Overall, the deleveraging event that is underway is observable painful, and is akin to a form of mini-financial crisis. However, with this pain comes the opportunity to flush excessive out leverage and allow for a healthier rebuild on the other side.”
Ether ended the month trading $1,067.30.
Amp’s AMP
Amp is described as the new digital collateral token offering instant, verifiable assurances for any kind of value transfer. Using Amp, networks can quickly and irreversibly secure transactions for a wide variety of asset-related use cases.
Amp claims to offer a straightforward but versatile interface for verifiable collateralization through a system of collateral partitions and collateral managers. Where collateral partitions can be designated to collateralize any account, application, or even transaction, and carry balances which are directly verifiable on the Ethereum blockchain, collateral managers are smart contracts that can lock, release, and redirect collateral in these partitions as needed in order to support value transfer activities.
Amp supports a wide variety of use cases for collateralization, and also introduces the concept of predefined partition strategies, which can enable special capabilities such as collateral models through which tokens can be staked without ever leaving their original address.
AMP ended the month trading $0.01004.
Harmony’s ONE
Harmony is a blockchain platform designed to facilitate the creation and use of decentralized applications (DApps). The network aims to innovate the way decentralized applications work by focusing on random state sharding, which allows creating blocks in seconds.
Harmony, like many other layer 2 (L2) platforms, has its native token, ONE, which stresses the protocol’s objective of assisting open consensus procedures for billions of individuals throughout the world.
The ONE token, the native token of the Harmony Blockchain, is down over 60% in the last 30 days and over 25% in the last seven days. The decline in the last week comes as the broader cryptocurrency market is rallying with DeFi tokens like COMP, leading the charge.
The decline in the token is as a result of the $100 Million dollar hack that the platform suffered just five days ago. A popular product on the Harmony network, the Horizon bridge, was exploited for over $100 million in cryptocurrencies in what is one of the biggest crypto hacks in recent weeks.
So far, blockchain data shows the exploiter wallet marked “Horizon Bridge Exploiter” moved over 36,000 ether (ETH), worth over $44 million, in the past 26 hours. Harmony explained that they are aware of the movement and is collaborating with blockchain analysis firms and the U.S. Federal Bureau of Investigation (FBI) to catch the culprit, developers said in a tweet.
ONE token makes our list of tokens to watch out for because there are serious security concerns surrounding the token as multisignatures are an ongoing security issue in attacks. The Axie Inifinity’s Ronin Bridge was secured by nine validators, only five of which were required to verify a transaction. The attacker took control of the required five validators and extracted over $600 million in assets. For Harmony’s Horizon bridge, it only required two validators’ signatures.
ONE ended the month trading $0.01811.
