(Kitco Commentary) - Of the cryptocurrencies tracked by CoinMarketCap, the best performer for the week was Aerodrom Finance, rising 30.47%.
Strengths
- An early investment in stablecoin issuer Circle Internet Financial has become one of the most profitable trades ever for Marshall Wace, netting roughly $700 million from the crypto firm’s stellar IPO. The fund participated in a $400 million funding round for Circle, the issuer of USDC, in 2022, according to a press release at the time, reports Bloomberg.
- Strategy purchased 10,100 Bitcoin for an aggregate price of $1.05 billion between June 9 and June 15. Its total Bitcoin holdings reached 592,100 as of June 15, with an aggregate purchase price of $41.84 billion at an average price of $70,666, Bloomberg writes.
Weaknesses
- Of the cryptocurrencies tracked by CoinMarketCap, the worst performer for the week was Story IP, down 23.79%.
- Bitcoin and other cryptocurrencies declined after Israel launched airstrikes on Iran. Bitcoin dropped as much as 3%, falling below $103,000, while smaller cryptocurrencies saw even steeper losses. The declines coincided with a sell-off in stocks and equity-index futures, as investors sought safety in havens like Treasuries, crude oil, and gold, according to Bloomberg.
- AQR Capital Management’s Cliff Asness supports Jim Chanos’s criticism of Michael Saylor’s claim that convertible debt provides downside protection for Strategy’s Bitcoin purchases. This disagreement is part of an ongoing Wall Street feud between Chanos and Saylor, with Chanos calling Saylor’s valuation model “financial gibberish” and recommending an arbitrage strategy to short Strategy’s shares and buy Bitcoin, Bloomberg reports.
Opportunities
- Ubyx Inc., a startup founded by Tony McLaughlin, a 20-year Citigroup veteran, has raised $10 million in seed funding to develop a clearing system for stablecoins. The system aims to connect stablecoin issuers with banks and fintechs, reducing friction for users making payments and addressing fragmentation and incompatibility between different issuers and blockchain networks, Bloomberg reports.
- The Bloomberg Galaxy DeFi Index, which tracks digital coins involved in decentralized finance, rose 12% this week. The index monitors prices of cryptocurrencies and related applications engaged in financial activities like automated market-making and lending, Bloomberg writes.
- The U.S. SEC announced four new hires for key positions, including a new director of trading and markets with connections to the crypto industry. Jamie Selway will lead the division responsible for regulating major securities market participants. He previously served as the global head of institutional markets at Blockchain.com and as chair of Skew’s board of directors, Bloomberg reports.
Threats
- Millions of people receive one-time login codes via text messages, but these codes often pass through intermediaries, making it possible for others to see their content. Security experts warn that using SMS for two-factor authentication is insecure and recommend alternatives such as biometric verification or dedicated authenticator apps to protect user accounts, according to Bloomberg.
- Bitcoin options indicate that traders are hedging against a price pullback to the $100,000 level amid rising geopolitical and economic uncertainty. The put-to-call volume ratio on Deribit surged to 2.17, reflecting strong demand for protective bets, especially in short-dated put options, Bloomberg reports.
- Norway’s government is considering a temporary ban on building data centers primarily engaged in power-intensive cryptocurrency mining, according to a study covering most of the country’s crypto mining power consumption, Bloomberg reports.
