Digital assets experienced volatility after last week’s strong performance, dropping sharply over the weekend before rallying slightly in Monday trading.
Bitcoin pulled back sharply as the Middle Eastern conflict flared late in the week, before recovering some of those losses on Monday
Bitcoin fell from a Wednesday high of $110,330 (close to record levels) to a Friday low of $103,270 as war concerns increased
Bitcoin subsequently rallied as high as $108,840 in Monday trading (as markets assumed no further escalation), before another slight pullback to current levels
Ether followed Bitcoin’s chart patterns, dropping down from a Wednesday top of $2,869 down to $2,455 on Friday
Industry sentiment on the Fear & Greed index became significantly more cautious, dropping 11 points to 53/100; indicating “neutral” trader sentiment
Overall industry market capitalisation decreased to $3.34tn
According to industry monitoring site DeFi Llama, total value locked in DeFi fell by around $1bn, to $114.5bn
Digital assets experienced a mixed week due to escalating international geopolitical tensions, closing slightly down from last week’s strong growth. There was however good news in terms of adoption, with new blockchain trademarks from JP Morgan, a record run by Ether ETFs, widespread enthusiasm around stablecoin development, several significant acquisitions, major regulatory policy news from Asia, and much more.
What happened: ETF News
How is this significant?
Digital asset investment products continued their recent run of inflows, with both of the leading assets posting multiple nine-figure net flows
According to Coinshares data published on Monday, crypto funds added $1.9bn in the week ending Friday the 13th
The firm’s head of research James Butterfill noted that year-to-date inflows now stand at $13.2bn, as “despite geopolitical concerns weighing on risk assets last week, digital assets remained resilient, attracting inflows alongside gold”
Spot Bitcoin ETFs added $1.3bn in total, as the worst trading day last week still saw growth of $86m
The rest of the week featured nine-figure flows, ranging from $165m to $431m
BlackRock’s IBIT once again led the way, adding between $121m and $337m on each of the last five trading days
Next-best performers were Bitwise’s BITB and ARK Invest’s ARKB, although second-placed FBTC from Fidelity experienced overall weekly outflows due to the worst trading day (-$197m) across the time period
BlackRock’s ETHA accounted for the majority of these inflows, although Fidelity’s FETH and both Ether funds from Grayscale also featured multiple eight-figure additions across the week
Ether inflows throughout the week ranged from $53m to $240m, whilst the sole day of outflows—as investors derisked when geopolitical conflicts intensified—was a modest loss of $2.1m
Elsewhere in ETFs, Coinshares became the latest issuer to file an S1 form for a potential Solana ETF, with plans to include Solana staking for extra returns
Industry analyst Noelle Acheson commented “The SEC’s nudge that ETF issuers amend their S-1 filings sounds like it could be just a matter of days or at the most weeks before approval becomes official. That would be a huge change for the spot crypto market”
Banking giant JP Morgan submitted a regulatory filing this week for a new “JPMD” trademark; a filing which industry analysts believe bears the hallmarks of digital asset servicing
The “D” in JPMD is speculated to stand for dollar, following on from recent Wall Street Journal reports that the bank is considering its own stablecoin
The JPMD trademark covers a diverse range of services, including “trading, exchange… and payment services tied to virtual currency, digital tokens, and blockchain-enabled money”
It also allows for potential applications in “blockchain-based asset issuance, brokerage, and electronic fund transfers”
JP Morgan CEO Jamie Dimon has long been one of the finance industry’s most outspoken critics of digital assets, but sheer demand has forced the bank into a broad range of digital asset adoption
A final Senate vote is scheduled for June 17th—if it passes, the bill then moves on to the House of Representatives for another vote
Some Democrats (including long-time crypto-sceptic Elizabeth Warren) still have concerns over perceived conflicts of interest from Donald Trump, especially after it emerged that he earned $57.7m from DeFi project World Liberty Financial
Another possible complication is that the House is already discussing its own stablecoin bill (with the snappy acronym STABLE), although the GENIUS act is currently understood to possess more bipartisan support
Senator Bill Haggerty of Texas warned “Without a regulatory framework, stablecoin innovation will proliferate overseas—not in America!”
Bloomberg identified stablecoins as a protection against high card fees for retailers
Doug Kantor, general counsel for the National Association of Convenience Stores, told the publication “The reason why the fees are so high is that Visa and Mastercard each organise banks all around the country into the dictionary definition of a pricing cartel, and they tell them how much to charge merchants”
Treasury secretary Scott Bessent opined that $2tn was a feasible market capitalisation for dollar-backed stablecoins, stating “Stablecoin legislation backed by US Treasuries or T-bills will create a market that will expand US dollar usage via these stablecoins all around the world… I think that $2tn is a very, very reasonable number, and I could see it greatly exceeding that”
The Wall Street Journal reported that Amazon and Walmart are considering their own stablecoins, alongside other corporations like Expedia and multiple airlines
The Journal claimed companies are “potentially shifting the high volumes of cash and card transactions that they handle outside the traditional financial system and saving them billions of dollars in fees”
Circle CEO Jeremy Allaire responded to the reports, saying “It’s a tremendous opportunity as the world connects to this new form of currency on the internet. We see tremendous opportunities to collaborate with major technology firms, major payments companies, major financial institutions, and we already do”
His company inked a deal with online commerce platform Shopify to make its USDC the default stablecoin offered by merchants on Shopify, executed via Coinbase’s low-cost Ethereum Layer-2 blockchain, Base
Elsewhere in stablecoins, Brazilian forex firm Braza Group teamed up with stablecoin payments provider Conduit to provide cross-border FX swaps “between the Brazilian real and major foreign currencies using stablecoins”
Braza executed $67bn in transactions last year, and launched its own Brazilian Real stablecoin, BBRL, on XRP’s Ledger blockchain
This filing came after the company initially proposed (but then withdrew from) a SPAC-based merger in 2022 due to regulatory hostility under the Biden administration
Meanwhile Tron, developers of the eponymous blockchain, revealed plans to go public this week via a reverse-merger with listed firm SRM Entertainment
Tron founder (and major Trump donor) Justin Sun remains a controversial figure within the wider digital asset industry, with Bloomberg citing “a history of not being transparent about his involvements in investments”
Following the news of a $100m equity investment from Tron, SRM shares surged more than 350%
It’s believed that as a publicly-listed firm, Sun will try to adopt a “TRON Token Treasury” strategy for the company, akin to the Bitcoin treasury strategies of Strategy and Metaplanet
Legalisation creates the largest regulated digital asset market in South East Asia
According to industry estimates, Vietnam ranks 5th in global crypto adoption, with 17 million crypto holders and a value of $100bn
As one of the few communist countries in the world, recognition of an arch-capitalist asset class such as crypto is particularly significant from Vietnam; not least because global economic powerhouse (and neighbour) China remains (politically) communist, and recognises crypto as legal property but officially bans trading
Though international, these exchanges are however not as large as the likes of Binance, Coinbase, or Kraken, and will likely lead to further consolidation within the market
As part of its broader push into digital assets, payment processor Stripe acquired crypto wallet developer Privy this week, for an undisclosed amount
Privy helps embed and integrate Web3 wallets into existing website architecture, reducing barriers to entry for digital asset users
Co-founder Henri Stern said “When we started, wallets were powerful but inaccessible for all but the most technical. Developers had to send users off-platform to get started, breaking flows and killing user conversion. That friction fundamentally constrained what could be built in crypto”
Stripe CEO Patrick Collison referred to the company’s recent $1.1bn acquisition of stablecoin platform Bridge, stating “With a unified platform, connecting Privy’s wallets to the money movement capabilities in Stripe and Bridge, we’re enormously excited to enable a new generation of global, Internet-native financial services”
This secures around a third of Altus, a move strengthening what Tether CEO Paolo Ardoino calls the firm’s “dual pillar strategy” of diversifying cash reserves into Bitcoin and gold
Now there’s even more industry optimism, after the appointment of Kim Yongbeom as chief policy advisor
Kim previously served as vice-chair of South Korea’s financial services commission and vice minister of finance, before moving on to work at a blockchain think tank
Kim was previously credited with saving the country’s crypto industry during a crackdown spurred by the 2018 bear market, introducing the real-name account system to clamp down on fraud
John Park of the Arbitrum Foundation told Bloomberg “He uniquely blends central bank-level macroeconomic experience with deep blockchain fluency. I believe this marks the beginning of Korea’s institutional crypto era”
Park added “Now that he’s in a position to implement policy from within government, the likelihood of Korea adopting a regulated, reserve-backed KRW stablecoin is quite high”
South Korea remains one of the most active crypto hubs in the world, with 15 million local traders on the country’s exchanges
Financing was done through preferred share sales, with the company’s previous funding strategy via common stock coming under scrutiny (and criticism)
Leading Asian treasury firm Metaplanet surpassed ¥1tn for the first time, as its shares soared over 400% in the last two months thanks to Bitcoin’s market rally
As a proof-of-stake asset, it has the benefit of delivering returns via staking, rather than generating new coins through a much costlier mining process
Analyst Thomas Shinske wrote in a client note “Combining staking with treasury operations should result in Solana treasury companies growing SOL/share faster than BTC treasury companies growing BTC/share, all else equal”
This weekly financial roundup is for informational purposes only and is not financial, investment, or legal advice. Information is based on public sources as of publication and may change. Consult a professional before acting.