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Treehouse Daily30 Jun 2023

June 2023 Market Recap

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Welcome to the monthly crypto market recap for June 2023! The month of June was a rollercoaster ride for the crypto market, characterized by extreme volatility and significant catalysts. In the first half of the month, the SEC's lawsuit against Binance and Coinbase sent shockwaves throughout the industry, triggering a sharp but short downturn. In the second half however, there was a sharp rally which was fueled by optimism from multiple spot Bitcoin ETF applications from renowned financial institutions.

Despite tumultuous market conditions, the overall performance of the market ended on a positive note. Most notably, much of this month’s performance was driven by Bitcoin and its associated projects such as Stacks and Bitcoin Cash. Bitcoin dominance also reached its highest level since July 2021.

Join us for our comprehensive monthly market recap, where we explore the highs, lows, and key narratives that shaped the crypto market in June! Stay informed with our comprehensive monthly market recaps at Treehouse Insights and our daily market analysis with Treehouse Daily, providing you with valuable insights and analysis to navigate the dynamic world of cryptocurrencies!


Bitcoin Cash (BCH) ⏶101.89%

Bitcoin Cash (BCH) has emerged as the top performer on our list this month, with its price rising by 101.89%. This hard fork of Bitcoin, created in 2017, showcased a stellar performance compared to its parent blockchain, which gained 11.28% in the same period.

Bitcoin Cash was created in 2017 to address concerns about transaction speed and cost on the original Bitcoin network. It originated from the divide over increasing the block size of Bitcoin to handle more transactions. Those in favor advocated for larger block sizes to speed up transaction times and reduce fees. Other forks of Bitcoin also performed well this month. Bitcoin Satoshi's Vision (BSV), a controversial fork of the original Bitcoin, claiming to follow the true vision of Satoshi Nakamoto, has gained a 13.03% return, benefiting from the positive tailwind of Bitcoin's price surge.

The performance of BCH this month was also boosted by its listing on EDX Markets, a new digital asset marketplace in the US. Amidst regulatory pressure on cryptocurrency exchanges like Binance, EDX Markets launched with backing from renowned financial institutions such as Citadel, Fidelity, and Charles Schwab. The increased exposure from mainstream financial institutions has attracted a substantial number of new traders to BCH.

Bitcoin Cash underwent a hard fork on 15 May, introducing critical enhancements to the network's security and privacy, including plans for "CashTokens". This scaling system enables developers to build decentralized applications (dApps) directly on the Bitcoin Cash blockchain. The upgrade also introduced smaller transaction sizes, enhancing transaction speed, and smart contract functionality.

From a fundamental perspective, the number of daily active users and the USD value transferred over the Bitcoin Cash network are significantly lower when compared to Bitcoin. Moreover, BCH's number of non-zero addresses has exhibited notably slower growth than BTC since the fork. Despite its recent price performance, these metrics underscore the challenges Bitcoin Cash faces in terms of adoption.

Kaspa (KAS) ⏶61.71%

Kaspa (KAS) has ended the month with an impressive gain of 67.71%. This surge can be attributed to two key catalysts: Firstly, Kaspa’s recent integration with CoinPal, a leading cryptocurrency payment service provider, and secondly, the announcement of its impressive 10 block per second (BPS) performance, which promises transaction speeds of up to 10,000 transactions per second (TPS).

As a Layer 1 blockchain, scalability and security are Kaspa’s core strengths. Its GHOSTDAG consensus mechanism enables high concurrency in transaction processing, facilitating a high throughput of transactions, making Kaspa the optimal choice for applications that require fast and efficient processing.

Kaspa’s integration with CoinPal opens up new opportunities for e-commerce merchants and users, allowing for faster and more reliable transactions. Thus, its focus on enabling micro-payments with minimal fees further positions KAS as a payment token to drive financial inclusion and achieve mainstream adoption of cryptocurrencies.

Radix (XRD) ⏶14.7%

Next up, Radix (XRD) has also shown an impressive gain of 14.7% this month, which pales in comparison to its year-to-date gain of 121.92%. In April, XRD also reached a 52-week high at $0.139. This surge is attributed to the highly anticipated Babylon upgrade, which is set to go live on 31st July according to radixcharts. Additionally, Changelly, an instant cryptocurrency exchange for cross-chain swaps, announced its listing of XRD this month.

Radix is a layer-1 protocol designed to cater to the needs of the DeFi ecosystem, aiming to serve as a full-stack solution for DeFi applications. The Radix public network has undergone notable upgrades since its launch in July 2021, such as the Olympia and Alexandria releases.

The upcoming Babylon upgrade is a highly anticipated event and significant milestone for the mainnet Radix Network. This update will enable the deployment of Scrypto-based smart contracts and introduce a wide array of cutting-edge technologies and features. These include the advanced Radix Engine v2 virtual machine, which includes “transactions manifest”, their unique approach to transactions. Its other features include, an innovative "smart" account component, a decentralized royalty system, and an on-ledger catalog featuring Scrypto-based "blueprints." Details about the upgrade can be found in Radix’s official blog and our April Market Recap.

Monero (XMR) ⏶14.65%

Privacy focused cryptocurrency Monero (XMR) rallied following the news of the BlackRock Spot Bitcoin ETF filing. Additionally, being often closely compared to Bitcoin has allowed Monero to benefit from the same positive tailwinds, resulting in a 14.65% gain for the month.

Monero distinguishes itself as a cryptocurrency by prioritizing private and censorship-resistant transactions. Unlike most other cryptocurrencies, transactions on Monero cannot be traced, preserving the privacy of its users and their real-world identities.

Operating on a Proof-of-Work (PoW) consensus mechanism similar to Bitcoin, Monero's hash rate has demonstrated steady growth since early 2020. Despite challenging market conditions, the hash rate reached its peak in early 2022 and has been stable since . This consistent hash rate indicates the continued interest of miners in securing the network and ensuring the integrity of transactions.

While Bitcoin remains the dominant and most widely adopted cryptocurrency, Monero's emphasis on privacy and anonymity allowed it to maintain relevance. Its focus on privacy has led many to view Monero as a potential alternative to Bitcoin, particularly for users who prioritize financial confidentiality and aim to avoid the risks associated with traceability and surveillance. The entrance of traditional investment giants like BlackRock into the cryptocurrency space has sparked debates on the importance of decentralized alternatives like Monero, which uphold the core principles of privacy and individual sovereignty.

LEO Token (LEO) ⏶13.14%

Bitfinex's utility token, LEO, has performed well amidst a market-wide downturn. LEO gained 9.4% in a day on 23 June and 13.14% for the month overall.

LEO, developed by the iFinex ecosystem, plays a significant role in DeFi. LEO holders enjoy benefits such as reduced trading fees, participation in token sales, access to exclusive features, and the ability to use LEO as collateral for borrowing. The integration of LEO within the iFinex ecosystem positions it as a vital facilitator of DeFi, bridging the gap between traditional financial systems and the decentralized world.

On 20 June, Tether and Bitfinex announced a public grant of 100K USDT to support the open-source development of Qubes OS, an open-source, security-oriented desktop operating system that prioritizes privacy and compartmentalization. Tether and Bitfinex aim to encourage innovation and empower individuals in protecting their digital assets and personal information. Qubes OS utilizes a unique virtualization approach to isolate tasks and applications, providing an exceptional level of security beyond traditional operating systems. The grant from Tether and Bitfinex is seen as a valuable contribution to the ongoing growth and enhancement of Qubes OS as a leading secure platform.

Stacks (STX) ⏶12.95%

Stacks (STX), the native token of the Stacks Network, gained 12.95% in the past month. This spike can be attributed to a number of factors, including the positive influence of Bitcoin, strategic partnerships, and increasing enthusiasm surrounding the potential of Stacks.

Stacks is an open-source layer-2 blockchain that builds on top of Bitcoin, enabling the creation of smart contracts and decentralized applications (dApps) while preserving Bitcoin's core functionality. By extending Bitcoin's capabilities, Stacks allows for the development of complex apps and smart contracts that interact with the Bitcoin network and use Bitcoin as their currency. The consensus mechanism, known as Proof of Transfer, ensures the security and benefits of the Bitcoin network for Stacks. Additionally, Stacks brings DeFi capabilities to Bitcoin, unlocking a potential capital pool of over $500B. The positive price performance of Stacks was closely linked to the movements of Bitcoin.

Furthermore, a recent partnership between Xverse, a Web3 Bitcoin wallet, and OKX has contributed to STX's rally. Through this collaboration, users can stake STX to earn Bitcoin rewards using OKX's Web3 wallet and Xverse Pool, attracting new users and driving positive price action. The Total Value Locked (TVL) on the Stacks blockchain has increased by 71.6% year-to-date, reflecting growing interest and activity.

An upcoming development known as the "Nakamoto release" and the introduction of the sBTC token further contributes to Stacks' positive outlook. This update aims to improve transaction processing speed on Stacks while leveraging the finality of the Bitcoin main layer. The sBTC token, similar to Wrapped Bitcoin (WBTC), enables Bitcoin-pegged DeFi activities on the Stacks blockchain without the need for a centralized custodian. STX has demonstrated strong performance this year, with a gain of over 300% year-to-date. Notably, the popularity of Ordinals' non-fungible tokens (NFTs) contributed to a rally in STX early this year.

Bitcoin (BTC) ⏶11.28%

Bitcoin demonstrated an impressive price performance in June, witnessing a surge of 11.28% that propelled its market capitalization above $600B for the first time since May 2022. The announcement of BlackRock, applying to establish a spot Bitcoin ETF generated significant excitement across the cryptocurrency industry and traditional media. BlackRock is the world's largest asset management firm, with $9.1T AUM as of March 23. If approved, this ETF would provide an accessible avenue for a new wave of investors to gain exposure to cryptocurrencies.

The Securities and Exchange Commission (SEC) has consistently rejected spot Bitcoin ETFs due to concerns related to fraud and manipulation. However, BlackRock has a strong track record of successfully obtaining approval for its ETF filings from the SEC. This development has ignited optimism for the possibility of the first spot Bitcoin ETF being approved in the United States. Notably, Coinbase is listed as the proposed Bitcoin custodian for the BlackRock ETF, despite the recent SEC lawsuit against Coinbase for allegedly operating unregistered securities exchanges. Following BlackRock's lead, other major asset management funds such as Fidelity and Invesco, both managing trillions in AUM, have also submitted applications for spot Bitcoin ETFs in June.

During a twice-yearly hearing on monetary policy, Federal Reserve Chairman Jerome Powell expressed a positive outlook toward the crypto industry. He acknowledged payment stablecoins as a form of money, and that cryptocurrencies such as Bitcoin appear to have staying power. Powell's remarks indicated a favorable stance towards cryptocurrency regulation and adoption among lawmakers and Congress, suggesting a potentially supportive environment for the industry's development.

Stellar (XLM) ⏶10.74%

Stellar (XLM) has made it into the list of top gainers with a net increase of 10.74%. The token surged 25% in the final week and erased earlier losses. The primary driver behind this price performance was the announcement by Coinbase, regarding its support for USD Coin (USDC) withdrawals on the Stellar network. This move allows Coinbase users to withdraw and deposit Circle's stablecoin via Stellar, expanding the accessibility of USDC to millions of institutional and retail customers.

Stellar is a layer 1 blockchain that facilitates thousands of exchanges between various currencies and tokens per second. Stellar allows the tokenization of various forms of money, including fiat currencies (e.g. USD, SGD, BTC) and securities; one of its key advantages lies in seamless transactions across currencies, enabling users to send and exchange money in a single transaction. This feature, known as path payment, eliminates exchange risk and delays, making it a powerful innovation for international payments.

The exchange between fiat and digital currencies are enabled through Anchors, which are regulated financial institutions, money service businesses, and FinTech companies that issue 1:1 fiat-backed stablecoins and provide on/off ramps into local payment systems. Anchors help create a world where the existing financial system is connected to, and interoperable with Stellar. This enables users to send and receive money quickly and transparently while avoiding the fees and latency traditionally associated with cross-border and cross-currency remittances.

In addition to the Coinbase announcement, Bitwage announced its partnership with Vibrantwallet to enhance cross-border USDC payments for remote workers worldwide using the Stellar network. Furthermore, Stellar's partnership with MoneyGram, one of the largest cross-border payment services globally, enables users to convert physical cash into digital dollars and vice versa without the need for a bank account. These strategic partnerships highlight the growing adoption and utility of Stellar's network, which positively impacts the token's performance.

Maker (MKR) ⏶7.01%

MKR, the native token of MakerDAO and Maker Protocol, has yielded a positive return of 7.01% in the month of June.

MakerDAO provides a platform where users can borrow money by locking up collateral and creating overcollateralized loans using the DAI stablecoin. The native token, MKR, is utilized for governance on the parameters of DAI, and serves as a means of recapitalization within the Maker system. MKR is also used for paying fees on collateralized debt positions (CDPs), which are subsequently burned, reducing its circulating supply.

The performance of MKR last month was largely driven by the anticipation and news surrounding various Bitcoin Spot ETF applications. However, a notable catalyst for MKR's performance was MakerDAO's decision to purchase $700M worth of US Treasurys. This strategic move aimed to capitalize on the favorable yield environment, strengthening the reserve backing of DAI and its peg to the USD at $1 through the Peg Stability Module (PSM).

The purchase of US Treasurys aligns with Maker's broader strategy of diversifying the assets supporting DAI and expanding the role of traditional financial assets in its reserve. The proposal to increase the real-world asset vault by $700M was approved in March 2023, adding to the previously approved $500M in October 2022, and bringing the ceiling to $1.2B.

As part of its ongoing restructuring initiative known as the "Endgame", MakerDAO is undertaking a transformation by dividing its structure into smaller units called SubDAOs. These SubDAOs will have their own SubDAO tokens, contributing to enhanced decentralization within the ecosystem. New groups such as Constitutional Voter Committees (CVCs), Constitutional Delegates (CDs), and Constitutional Conservers (CCs) have been established to govern the DAO's future operations, ensuring a robust and inclusive decision-making process.

Injective (INJ) ⏶5.66%

Injective Protocol (INJ) emerged as one of the best-performing cryptocurrencies in June, netting a gain of 5.66%. Designed specifically for the Web3 financial ecosystem, Injective Protocol is a blockchain that facilitates applications such as spot and derivatives exchanges. Leveraging the Cosmos SDK and Tendermint consensus, it is an open and interoperable layer-one blockchain that prioritizes scalability, security, and composability.

A standout feature of Injective Protocol is its fully decentralized on-chain orderbook, enabling users to trade assets across multiple chains without incurring gas fees or falling victim to front-running. The protocol supports various financial markets, including spot, perpetual, futures, and options. Additionally, Injective Protocol incorporates a decentralized cross-chain bridging infrastructure, ensuring seamless integration with Ethereum, IBC-enabled blockchains, and non-EVM chains such as Solana.

Injective Protocol's price surge this month is mainly attributed to the anticipation of one of the largest recorded token burns for the protocol, burning up to $50K worth in INJ. The protocol automatically burns 60% of all fees earned from its exchange every week, reducing the circulating supply of INJ tokens and enhancing their scarcity and value.

Injective Protocol has continued to make notable strides in the DeFi space through ongoing development and innovation. In 2023, the project achieved several milestones, including the launch of a $150 million ecosystem fund aimed at accelerating infrastructure development and scalability solutions for interoperability, DeFi, and trading. The fund garnered support from prominent entities such as Pantera, Jump Crypto, Kraken Ventures, Kucoin Ventures, and Delphi Labs.

In April, Injective Protocol introduced a layer-2 testnet for Solana-based apps in the Cosmos ecosystem. This testnet stands out as one of the few networks utilizing Solana's Sea Level Virtual Machine (SVM), allowing Solana developers to seamlessly port their Web3 applications to the Cosmos ecosystem without necessitating changes in programming language or tooling. For more information on how the SVM development contributed to Injective’s performance in April, check out our previous market recap.

Closing Remarks

The crypto market in June once again showcased its inherent volatility, largely influenced by ongoing regulatory uncertainties in the United States. Such developments significantly impact investor sentiment and market trends. Additionally, macroeconomic factors, including concerns over inflation and potential interest rate hikes by the Federal Reserve, continue to present challenges.

Bitcoin's dominance has now reached its highest level since July 2021, reaffirming its significant influence in the crypto ecosystem. This raises questions about whether altcoins will catch up, leading to a potential "alt season," which investors and traders are closely monitoring for new opportunities and market dynamics.

Financial institutions' increased involvement in the crypto space during June has created anticipation for potential news and progress in the upcoming months. The emergence of BTC spot ETF applications from established financial institutions has sparked interest and speculation in the market. Watching whether these initiatives materialize and their impact on the market will be of great interest to the crypto community.

Moving forward, it is crucial to remain vigilant and informed about the evolving regulatory landscape, macroeconomic indicators, and the relationship between Bitcoin and altcoins. The market's response to regulatory developments, inflation trends, and the progress made by financial institutions will shape the crypto market's narrative and direction. Stay tuned for our comprehensive analysis and insights in the coming months to navigate the exciting and ever-changing world of cryptocurrencies.

Yours sincerely,
Treehouse Research 🌳


Disclaimer

This publication is provided for informational and entertainment purposes only. Nothing contained in this publication constitutes financial advice, trading advice, or any other advice, nor does it constitute an offer to buy or sell securities or any other assets or participate in any particular trading strategy. This publication does not take into account your personal investment objectives, financial situation, or needs. Treehouse does not warrant that the information provided in this publication is up to date or accurate.

Treehouse APIs for Institutions provides you with comprehensive current and historical data for your DeFi portfolios to meet your monitoring, trading, and reporting needs. Contact us if you are interested! Otherwise, check out Treehouse Academy, Insights, and Treehouse Daily for in-depth research.


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