Monthly report of June 2023
In this monthly report, we will examine the most important cryptocurrency news in June. The most significant cryptocurrency-related news in June revolved around BlackRock's Bitcoin ETF application and its implications, the lawsuits filed by the SEC, the progress made by Deutsche Bank and HSBC, positive comments from the US Federal Reserve Chairman on cryptocurrencies, and MicroStrategy's bitcoin purchases.
June in the cryptocurrency market
June was a mixed month for cryptocurrency prices, with approximately half of the larger cryptocurrencies experiencing gains and the other half experiencing losses. Similar to the previous month, Litecoin performed the best among the cryptocurrencies offered by Northcrypto, with its price increasing by approximately 17% during the month. The upcoming Litecoin block reward halving that will occur slightly less than a month from the publication of this report has contributed to the recent price increase. The prices of Bitcoin and Aave also saw gains of nearly 10%, while Ethereum ended June with a slight increase of about 1%. On the other hand, the prices of Chainlink, Polygon, and ApeCoin experienced declines of approximately 5%, 28%, and 31%, respectively.
World's largest asset manager filed Bitcoin ETF application
BlackRock, the world's largest asset manager with assets under management of nearly 8.5 trillion euros, submitted a spot Bitcoin ETF application to the US Securities and Exchange Commission (SEC) in mid-June. Specifically, the ETF application was filed by BlackRock's iShares unit to the SEC, which has received considerable attention in recent times. As a spot ETF, this means that the ETF shares would be backed by actual bitcoins rather than just bitcoin futures. BlackRock is one of the most significant and closely watched financial players globally, with its clients including state actors, pension funds, foundations, and other significant financial institutions.
Implications of BlackRock's ETF application
The impact of BlackRock's ETF application was evident as several major asset managers followed in BlackRock's footsteps. After BlackRock's application, the following asset managers submitted or reactivated Bitcoin spot ETF applications: Invesco, WisdomTree, and Valkyrie. Additionally, Fidelity, the third-largest asset manager globally, submitted a Bitcoin spot ETF application at the end of June.
SEC files lawsuits against Binance and Coinbase
The SEC garnered significant attention in the cryptocurrency world in early June. Initially, the SEC filed a lawsuit against Binance, the world's largest cryptocurrency exchange by trading volume. The SEC accuses Binance of various offenses, including misappropriation of customer funds, misleading investors and regulators, and violations of securities regulations. Binance refuted the allegations, stating that they are baseless. Shortly after the lawsuit against Binance, the SEC filed a lawsuit against the cryptocurrency exchange Coinbase. Coinbase is accused of violating securities regulations by operating as an unregistered exchange and broker. Coinbase also expressed its opposition to the lawsuit and stated its confidence in facts and the law.
Deutsche Bank seeks approval to become a cryptocurrency custodian
Deutsche Bank, one of Europe's largest banks managing nearly €1.3 trillion in assets, announced in June that it has applied for approval to act as a cryptocurrency custodian from BaFin, the regulatory authority overseeing Germany's financial markets. Deutsche Bank first announced its plans to offer cryptocurrency custody services at the end of 2020.
HSBC to offer trading opportunities for Bitcoin and Ethereum ETF
HSBC, one of the world's largest banks, announced at the end of June that it would enable its Hong Kong customers to trade Bitcoin and Ethereum ETFs. In practice, this means that HSBC's customers can trade through HSBC three ETFs listed on the Hong Kong Stock Exchange. In May, the Securities and Futures Commission (SFC) of Hong Kong announced that retail investors could start trading the largest cryptocurrencies on SFC-licensed trading platforms from June onwards.
Positive comments on cryptocurrencies from the Chairman of the Federal Reserve
Jerome Powell, the Chairman of the Federal Reserve (Fed) in the United States, made positive comments on cryptocurrencies in the latter part of June. Powell stated that cryptocurrencies seem to have staying power as an asset class. Additionally, Powell mentioned that the Fed sees stablecoins as a form of money. Powell's and the Fed's previous comments on cryptocurrencies have generally been quite critical.
MicroStrategy buys more bitcoin
MicroStrategy, a US company that provides business intelligence solutions, cloud-based services, and mobile software, made another bitcoin purchase. At the end of June, MicroStrategy announced that it had purchased over 12,300 bitcoins for just under 320 million euros, at an average price of around 25,800 euros. The company announced its first bitcoin purchase in August 2020 when the price of Bitcoin was around 10,000 euros. Since then, MicroStrategy has made several bitcoin purchases, and after the latest acquisition, it now owns over 152,300 bitcoins.
Although cryptocurrency price movements were mixed in June, there were many positive news stories for cryptocurrencies during the month. The Bitcoin ETF applications filed by BlackRock and other asset managers received significant attention. The approval of ETFs has been the subject of much discussion, as the SEC has not yet approved any spot Bitcoin ETFs despite multiple applications. However, it is highly possible that the situation may change with the application from the world's largest asset manager, which has 575 approved ETF filings against just a single rejected one.
The lawsuits brought by the SEC against the world's two largest cryptocurrency players came as a surprise to many. The lawsuits have also faced considerable criticism, and several cryptocurrency experts have highlighted the interesting timing of the lawsuits, as the world's largest asset manager filed its Bitcoin ETF application with the SEC in the week following the lawsuits.
The progress made by Deutsche Bank and HSBC, two of the world's largest banks, can be seen as a logical continuation of the cryptocurrency-related initiatives taking place in Germany and Hong Kong, respectively. HSBC's decision can be seen as a continuation of the measures taken in Hong Kong this year to establish the region as a cryptocurrency hub. Similarly, prior to Deutsche Bank's actions, other major German banks, such as DZ Bank and DekaBank, have also taken steps forward in the cryptocurrency market.
In the United States, there was some surprising news in June when Fed Chairman Powell made positive comments on cryptocurrencies, including stablecoins. These comments differ significantly from Powell's remarks a couple of years ago when he stated that cryptocurrencies and stablecoins were useless with the introduction of a digital dollar. There was also less surprising news from the US, as MicroStrategy continued its bitcoin purchases. It is likely that MicroStrategy will continue to buy bitcoins in the future, and selling their bitcoin holdings seems unlikely. Consequently, MicroStrategy regularly reduces the supply of available bitcoins in the market, which is naturally positive for the future price development of Bitcoin.Ville Viitaharju Cryptocurrency specialist