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Key Market Fundamentals Point North After Losses In May: What To Expect From Top Crypto Assets

  • Market indicators like the futures market, miners’ balance, and institutional demand predict an uphill run for digital assets.
  • Top assets continue to rally on the back of BlackRock’s spot BTC ETF application for five consecutive days posting surges up to 20%.
  • As the market awaits the SEC’s approval of the first Bitcoin ETF, analysts and market executives suggest that we are in the “great accumulation” phase of acquiring BTC.

After a brilliant run in the first quarter, the cryptocurrency market recorded its first loss in May, with a 6.9% decline due to uneasy regulation and uncertainty in interest rate hikes.

Major cryptocurrencies are getting out of the woods after recording surging values this week, with Bitcoin (BTC) hitting new points not seen in 12 months. Experts suggest that digital assets could still continue their rally due to increased market activity and other indicators.

The surge in mining stocks is a factor that points to a healthy market. A bearish market always leads to plunging mining stocks leaving miners scrambling for gains to stay afloat. Bit Digital recorded 77% in its stock following its expansion plans in Europe as well as TeraWulf, which also saw similar growth.

The profitability of BTC mining grew following the sharp popularity of Ordinals on the network. BTC miners generated $916.6 million in May, a 13.7% increase from April. As noted, increased transaction volume led to a boost in gas fees across many networks.

The BTC option market is another surging criterion analysts have relied on to speculate on the price action. The options market recorded trades worth $3.3 billion on June 22, its highest level in the past three months. 

VC and Wall Street funds hit the market

Although observers have noted an increase in almost every market activity, including non-fungible tokens and other decentralized applications, the leading factor in this uphill run has been the thirst for “big money” in virtual assets. 

Venture Capital investments in the market topped $1 billion for the first time since Sept 2022 and fell significantly lower after the collapse of FTX. VC interest increased by 34% in April, marking the third consecutive rise after a strong showing in Q1 2023. 

This past week has ushered in a new drive of institutional investors in cryptocurrency products, with many coming from Wall Street. Following BlackRock’s application for a spot BTC application, the floodgates for more applications were opened. Several firms, including WisdomTree and Invesco, have made similar applications alongside top bank officials hailing the merger of digital assets and traditional finance.

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