In Q2 2024, the cryptocurrency market experienced significant shifts, marked by changes in market cap and dominance among major cryptocurrencies like Bitcoin and Ether. Both assets have shown upward trends since late 2022, with future projections suggesting continued growth. The period also saw key developments such as new regulatory measures in the EU, notable ETF filings in the U.S., and regulatory decisions affecting the classification of digital assets, highlighting the dynamic and evolving nature of the crypto landscape.
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Crypto cap
In Q2 2024, the total cryptocurrency market cap decreased by $362 billion, a shrinkage of 13.8%. Breaking down the market cap into Bitcoin, Ether, top 3-10 cryptocurrencies, and other crypto assets reveals that Ether experienced a decline of 5.7%. Consequently, Bitcoin's market cap dominance increased by 2.2% to 54.8%, while Ether's dominance remained steady at 18.3%. When larger market cap cryptocurrencies outperform smaller ones, it is often seen as a risk-off move, particularly when stablecoins' dominance also rises.
In June 2024 alone, the total cryptocurrency market cap decreased by $198 billion, an 8.1% shrinkage. Most of the growth in June was attributed to Bitcoin, which saw a decline of 7.1%. As a result, Bitcoin's market cap dominance rose by 1.1% to 54.8%, up from 54.2%. This trend of larger market cap cryptocurrencies outperforming smaller ones, along with an increase in stablecoin dominance, suggests a risk-off sentiment in the market.
Bitcoin, price and annual ROI trend
Since November 9, 2022, Bitcoin has been in an upward price trend. However, it is important to recognize that price trends are not permanent. If the current trend continues, there is a 50% chance that Bitcoin's price will be above or below $74.1k by July 31, 2024, and a 98% probability that it will be between $61.3k and $86.9k by that date. Should Bitcoin gain or lose momentum, the price could move outside these ranges.
One way to gauge price momentum is by examining the annual return on investment (annual ROI), specifically if you had purchased Bitcoin exactly one year ago. Similar to its price, Bitcoin's annual ROI has been on an upward trend since November 9, 2022. At the moment, the trend is below the 1% probability level.
Ethereum, price and ROI trend
Since November 9, 2022, Ether has been in an upward price trend. However, it is important to acknowledge that price trends are not indefinite. If the current trend continues, there is a 50% probability that Ether's price will be above or below $3.6k by July 31, 2024, and a 98% probability that it will range between $2.8k and $4.3k by that date. If Ether gains or loses momentum, the actual price could fall outside these estimates.
To measure price momentum, one can look at the annual return on investment (annual ROI), which considers the ROI if you had bought Ether exactly one year ago. Like its price, Ether's annual ROI has been on an upward trend since November 9, 2022. Should this trend persist, there is a 50% chance that the annual ROI will place Ether's price above or below $4.7k by July 31, 2024, and a 98% probability that the price will be between $3.5k and $5.9k by that date. Nevertheless, if Ether's price momentum changes, the actual price could exceed or fall short of these projected figures.
Crypto Market News
In July 2024, several significant developments unfolded in the cryptocurrency world, highlighting regulatory changes, financial maneuvers, and intriguing market activities. VanEck, a prominent Bitcoin ETF issuer, made headlines by filing for the first Solana ETF in the United States. Announced by VanEck’s head of digital assets research, Matthew Sigel, the VanEck Solana Trust aims to capitalize on Solana’s decentralized network, high utility, and economic feasibility. This move comes in the wake of the SEC’s recent approval of spot Ether ETFs, indicating a growing acceptance of diverse cryptocurrency assets as commodities.
In Europe, the Markets in Crypto-Assets Regulation (MiCA) commenced its implementation, marking a new era for crypto regulation within the European Union. MiCA’s phased rollout began with stablecoin regulations set to take effect on June 30, followed by broader regulations for crypto asset service providers in December. The legislation aims to legitimize crypto businesses across the EU, bringing clarity and uniform market rules. Industry experts anticipate a mix of initial market disruption and long-term stability, as non-compliant stablecoins may be delisted, and firms adapt to the new regulatory environment.
A noteworthy transaction occurred in the Bitcoin community, where a Satoshi-era Bitcoin wallet, dormant for 14 years, reactivated and sent 50 BTC to the Binance exchange. This wallet, belonging to an early Bitcoin miner who earned the BTC when it was valued at just $0.05, moved assets now worth millions. Such movements are often viewed as bearish indicators, suggesting potential sell-offs. This event underscores the ongoing evolution and historical significance within the cryptocurrency ecosystem as older assets resurface in today’s high-stakes market.
Meanwhile, the U.S. Securities and Exchange Commission (SEC) unexpectedly dropped its investigation into whether Ether (ETH) is a security. The decision followed the SEC’s approval of spot Ether ETFs, which some interpret as an implicit recognition of Ether as a commodity. Legal experts suggest the SEC may have doubted its ability to prove ETH is a security under current laws. This development, while relieving some regulatory pressure on Ethereum, leaves the broader battle for clear crypto regulations unresolved. The industry continues to seek definitive guidance on the classification and regulatory framework for various digital assets.
Summary
In Q2 2024, the cryptocurrency market saw a notable decline in total market cap, with Bitcoin's market dominance increasing while Ether's remained stable. Both Bitcoin and Ether have been on an upward price trend since late 2022, with projections indicating potential growth if current trends continue. Significant developments in July 2024 included VanEck filing for the first Solana ETF in the U.S., the EU implementing new crypto regulations, the movement of a dormant Satoshi-era Bitcoin wallet, and the SEC dropping its investigation into Ether's status as a security. These events highlight the dynamic and evolving nature of the cryptocurrency market, signaling both challenges and opportunities ahead.
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