Bitcoin
Bitcoin’s gloom may extend until July, but the outlook for the second half is optimistic
Bitcoin’s gloom could last all of July, but investors are still bullish on the cryptocurrency heading into the second half of the year. The cryptocurrency has yet to break out of the tight range it’s been stuck in — between $60,000 and $70,000 — since March. This week, it fell to the lower end of that range and is now on track to end June down 10%, according to Coin Metrics. That would make it the worst month since April and the second-worst month in three. July is typically a strong month for bitcoin, which has finished the month higher in seven of the past 11 years, according to CoinGlass. At $61,000, bitcoin has key support at the $67,000 level, chart analysts say, though a breach below that could be “damaging.” Investors are concerned the cryptocurrency could fall due to oversupply in July. “The Bitcoin halving was a known positive supply event for the market this year — we have less bitcoin being produced,” said Zach Pandl, managing director of research at Grayscale Investments. “There are always other known potential sources of bitcoin supply from the government, for example, but it’s always uncertain when that will hit the market. To some extent, the supply being liquidated by things like government agencies is partially negating the short-term positive effects.” Bitcoin’s run is taking a hit.” This week, the crypto market was surprised when the U.S. and German governments sent large amounts of previously seized bitcoin to exchanges, according to CryptoQuant. Additionally, the administrator of the now-defunct Mt. Gox exchange announced that it will begin paying creditors — 142,000 bitcoins worth $9 billion at today’s prices — starting in July. Some investors are concerned that creditors will sell some of that bitcoin in July, after waiting more than 10 years for a resolution with the exchange. “This fear is justified given the recent behavior of Gemini’s creditors, who reportedly liquidated part of the crypto assets received in recent weeks; in particular, nearly $2 billion in crypto assets were returned to 232,000 retail customers by bankrupt crypto lender Genesis and crypto exchange Gemini,” JPMorgan’s Nikolaos Panigirtzoglou said in a note this week. “A similar downside risk looms in July with Mt. Gox creditors,” he added. “Assuming most liquidations by [them] If the market gets another low CPI impression, a Federal Reserve rate cut from the central bank’s September meeting would become the base case for many macro investors, he said. Bitcoin, along with other risk assets, tends to rally on expectations of rate cuts. The next CPI analysis is scheduled for July 11. Messages about the U.S. dollar — which moves inversely to bitcoin — could also catalyze the next leg higher, Pandl said. “We don’t know what candidate Trump’s views are on the U.S. dollar,” Pandl said. “He would like to see smaller U.S. trade deficits, but so far, he has focused mostly on the need for tariffs.” “It’s possible that during the election campaign, Trump will introduce the idea that we need a weaker dollar,” she added. “Those two things combined would be positive for bitcoin: Fed rate cuts and one of the two presidential candidates talking about the dollar’s weakness.” Marion Laboure, a senior strategist at Deutsche Bank Research, said the growing demand for crypto ETFs will help keep bitcoin’s price “elevated” in the coming months. Initial filings known as 19b-4s for ether ETFs were approved in May, and the funds themselves are in the process of getting S-1 registration approvals — which are expected to be approved in the coming weeks. This week, VanEck and ARK 21Shares also filed for what would be the first Solana ETFs in sight. “There’s a lot of uncertainty in the market, but I’m quite optimistic,” she said. “I wouldn’t be surprised if we also see more ETFs approved. If we have a clearer institutional framework, we’ll have more ETFs… We’re moving towards more democratization, more institutionalization of ETFs.” —CNBC’s Michael Bloom contributed reporting.