2 June 2023

Hello,May was a snore fest for Bitcoin (BTC) with all price action between a tight range of $26,000 and $29,500. But it also had a direction – in the red. BTC (and overall crypto market) ended May about 7% down.

We have to see if June does better, though it hasn’t had a green start. June is traditionally a red month for crypto and therefore the following questions hold key this year.• Will the US increase its debt ceiling in time before it defaults? • Will the US raise interest rates or hold? • Will BTC.D hold 46%?Today, we focus on what’s ahead in June for Bitcoin and the overall crypto market.

Top-3 stories of the week:

1

Crypto wallet Magic raises $52M to expand ‘wallet-as-a-service’ solution

. Venture capital firms Cherubic, Synchrony, KX, Northzone, and Volt Capital led by PayPal Ventures participated in the investment, which brought the company’s total raised to over $80 million.

2

EU formally signs new crypto licensing, money laundering rules into law

. The MiCA law is set to make the bloc the first major jurisdiction with tailored crypto regulations. MiCA will enter into force in a few weeks after being published in the EU’s official journal, which is likely in June.

3

Hong Kong opens crypto exchange licensing ahead of retail trading

. Trading of cryptocurrencies in the Chinese territory has been restricted to institutional investors and other professionals since 2018, but Hong Kong's new regulations will allow retail trading as soon as the second half of 2023.

The newsletter is put together by Giottus Crypto Platform and The News Minute’s Brand Studio. You can read all the previous issues of Cryptogram here.

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WEEKLY MACROS

• Total crypto market cap - $1.13 trillion - 2.7%

• Bitcoin price - $26,954 - 1.9%

• The dollar index (DXY) - 103.4 - 0.6%

• Bitcoin Dominance - 45.9% - 0.7%

• Crypto Fear and Greed Index - 50 - the market is in neutral condition

ICO CALENDAR

• 6 June 2023 - FlippinLabs

THE HOT TAKE

The bears won in May, the bulls need inspiration in June

We are nearing the middle of 2023 which has largely been positive for the crypto market. After four consecutive green months, May had to print in red to normalize expectations. It did so without much volatility in spite of speculations around US debt ceiling on one side and meme coin fest on the other.

In this context, we map key trends for June and upcoming months.

1) June is mostly a red month

In the past five years, June has been mostly in the red (with negative returns). June was 2022’s worst month after the LUNA debacle hit us. Given that pre-halving years (2015, 2019) have had an equal share of positive and negative months and that 2023 started with four positive months, we are likely to see more red months than green going forward this year. Essentially, new market liquidity is not yet arriving and hence rotation of cash between assets is driving mini rallies.

Source: Into the Cryptoverse

2) Debt ceiling raise can bring cheer to the market (briefly)

US debt ceiling raise will likely contribute to heightened volatility in the upcoming week. The US Senate voted on the agreement this week, clearing a major legislative hurdle with just days left before the US is expected to default. This news is likely to reflect positively on the market in the short term.

Source: Bloomberg

A US default, however, would be catastrophic for all financial markets.

3) US is not expected to raise interest rates

Another key signal for the markets this month will be from the US Fed meeting on June 14. According to latest analyst estimates, there is only a 24% chance of a 25 bps increase in interest rates implying that the market anticipates the US Fed to hold interest rates at current level. If that eventuates, financial markets are likely to rally (again, in the short term).

Source: CME Group

4) Bitcoin dominance is holding fort

Since mid-April, BTC.D has not fallen below 46%. This is a strong sign of a consolidation that can lead to a rally in BTC.D in upcoming months. We anticipate BTC.D to hit at least 60% before altcoins find a bottom against BTC in this bear market cycle. In the 2018-19 bear market, rotation from altcoins to BTC was a key trend, leading the BTC.D to reach peaks above 70%, in contrast with the current dominance of 46%.

Source: Into the Cryptoverse

What does this mean for you?

June will likely be a mixed month for crypto though a couple of positive macro effects can push the assets into green territory. We still anticipate some pain going ahead in 2023 as new liquidity (and new retail investors) aren’t yet coming into the market for a sustained rally. Hence, we encourage you to build your BTC and ETH positions regularly via cost averaging while avoiding altcoins in the short-term.

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If you have any questions or feedback for us, write to us at [email protected]. You can check out the previous issues here.