Weekly Market Wrap: BTC Below $31K; MKR, AAVE Show Huge Weekly Gains
Bitcoin's brief surge above $31,000 appears to have been short-lived as the cryptocurrency retraces to just below that level. While most altcoins are slightly down daily, the weekly charts tell a different story for assets like MKR, AAVE, and others.
BTC failed to maintain its momentum last Friday, dropping from over $31,000 to a 10-day low of $29,500 within minutes. This decline followed reports that the US SEC deemed recent spot Bitcoin ETF filings "inadequate," raising concerns of potential rejection by regulators.
However, bullish traders prevented further declines, and BTC quickly reclaimed the $30,000 level. The weekend remained uneventful, with Bitcoin hovering around $30,500. On Tuesday, it made another attempt to surpass $31,000 but fell short, currently trading just below that level. Consequently, its market cap dipped below $600 billion, with its dominance over altcoins remaining at 49.6%.
While most altcoins mirrored Bitcoin's 24-hour performance and turned red, Compound, Maker, and Aave have seen significant gains on a weekly scale. MKR surged by 46%, COMP by 43%, and AAVE by 30%.
Overall, the total crypto market cap declined by over $10 billion in a single day, resting at $1.2 trillion according to CMC.
Crypto Regulation Updates: UK, South Africa, and Australia
The UK Law Commission's review on the application of British laws towards digital assets emphasizes the need for clarity regarding cryptocurrency lending and its classification under existing financial collateral regulations. The commission has made four major recommendations to the UK government, including the creation of a distinct category of personal property for cryptocurrencies, the establishment of an industry-specific panel, the development of a legal framework for crypto-related assets, and reforms to determine if cryptocurrency lending falls under the UK's Financial Collateral Arrangements Regulations.
Meanwhile, South Africa's financial regulator, the FSCA, has announced that all crypto exchanges in the country will be required to obtain licenses by the end of the year. Failure to comply may result in enforcement actions, including fines or closure of non-compliant firms.
In Australia, Binance is reportedly cooperating with local authorities following reports of searches conducted by the Australian Securities and Investments Commission at Binance Australia offices as part of an investigation into Binance's previous Australian derivatives business.
BTC and ETH Supply Decline on Exchanges in June: Goldman Sachs
According to a report by Goldman Sachs, the supply of Bitcoin and Ether on exchanges decreased in June due to increased regulation and concerns about security. The supply of Bitcoin, the largest cryptocurrency by market cap, dropped by 4%, reaching a level close to December 2022, which was the lowest since November 2020, just before the start of the 2021 bull market. Ether supply also declined by 5.8%, reaching levels not seen since May 2018.
Goldman Sachs attributed this trend to several factors, including regulatory challenges faced by major centralized spot exchanges, concerns about cyber hacks and theft, and the preference of asset holders for self-custody. The report mentioned that investors prefer to hold their assets in their own wallets rather than keeping them on exchanges, highlighting the popular saying, "not your keys, not your coins." Additionally, the ability to stake Ether has led investors to choose staking over passive holding on exchanges.
The report also noted that June witnessed a record month for Bitcoin miners' inventory sales, taking advantage of the cryptocurrency's strong performance. Bitcoin transaction fees returned to normal levels, resulting in a rebound in monthly address activity for both Bitcoin and Ether. Furthermore, there was an increase in new on-chain activity, with the daily average new address count rising compared to the previous month.
XBO Featured Coin of the Week — AAVE
AAVE is one of the few cryptocurrencies to show triple-digit growth last week, soaring by 30%, and reaching around $77 price at the time of writing.
The native token of the Aave Open-Source Liquidity Protocol, AAVE started with a $0.0162 price per token during the initial coin offering (ICO) in November 2017.
The number of AAVE tokens in circulation is directly tied to the total value locked on the Aave protocol. As users utilize the protocol and fees are collected, AAVE tokens are burned, contributing to their deflationary nature. The AAVE tokens adhere to the ERC-20 standard and serve as an essential component of the Aave decentralized finance (DeFi) ecosystem.
To facilitate the growth and development of the Aave platform, a token swap took place in July 2020. During this swap, the existing 1.3 billion AAVE tokens were exchanged for newly minted AAVE cryptocurrency at a ratio of 1:100. As a result, the total supply of AAVE tokens now stands at 16 million, with three million tokens held in reserve.
Buy, sell, and swap AAVE securely at XBO.com.
Disclaimer: Our content does not constitute financial advice. It is only intended for informational and educational purposes.
