Crypto

Bitcoin market review for June and future outlook: Downside risk remains but the market is likely to remain stable

2024/07/29Masamichi Matsushima

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Cryptocurrency market trends

Cryptocurrency market trends

I'm Mari Matsushima, a.k.a. Mari, a cryptocurrency analyst at Monex Securities. This time, I'll be looking back at the Bitcoin market and giving my outlook for the future.

Bitcoin Market: June Review and Future Outlook

In June 2024, Bitcoin was dominated by selling as interest rate cut expectations receded following major economic indicators and the results of the FOMC in the United States, and capital outflows from spot ETFs were also noticeable. The May US employment statistics were significantly higher than market expectations, increasing uncertainty about when interest rate cuts would begin. The May US Consumer Price Index, which was subsequently announced, fell for the second consecutive month, suggesting a slowdown in inflation.

However, at the FOMC, Fed Chairman Powell showed a cautious stance on keeping interest rates unchanged and lowering interest rates, and the expected number of interest rate cuts this year was reduced to one. In the midst of this series of events, there were some instances of rebounding due to expectations for the start of trading in Ethereum spot ETFs, but when large Bitcoin transfers related to German authorities and Mt. Gox were confirmed, the selling pressure was feared and the price fell below 10 million BTC.

Although there remains a risk of further decline in Bitcoin in the future, we expect it to remain firm. While the S&P and Nasdaq continue to reach new all-time highs, the market is overheating, especially with NVIDIA's stock price soaring. Bitcoin is also seen as a leading indicator of US stocks, so if US stocks turn to selling in this trend, Bitcoin may be sold further.

The market will be influenced by US monetary policy between the FOMC in July and the Jackson Hole meeting in August. It is also important to be wary of selling pressure due to the start of repayments at Mt. Gox.

Marin's featured stock: Avalanche (AVAX)

This time, I will introduce Avalanche (AVAX), which has many use cases in Japan. Avalanche is a blockchain project that was born in September 2020 as one of the Ethereum killers. It is being developed mainly by Ava Labs, and by adopting a unique architecture and consensus algorithm, it has achieved fast transaction processing of over 4,500 transactions per second.

Like Ethereum, many DeFi apps such as Trader Joe's, GMX, and GoGoPool have been created, and it is ranked 11th in the CoinMarketCap market capitalization ranking (as of the end of June 2024).

Avalanche's biggest feature is its ability to build its own network called a "subnet." This allows companies to flexibly create blockchain systems independent of the main chain according to their needs while using the infrastructure of the Avalanche itself.

It is designed to be easy for traditional Web 2.0 engineers to develop, from creating subnets to building applications. Due to this flexibility and convenience of development, the number of companies adopting it is increasing, and in Japan, Konami, Nexon, Ponta Points, and others are using Avalanche to launch Web 3.0-related projects.

Avalanche also continues to update its development to develop the entire ecosystem, including cross-chain functionality, further scaling solutions, enhanced EVM compatibility, etc. Its native token, AVAX, has recently been selling slightly against Bitcoin, but as the number of services that companies deploy on Avalanche increases in the future, it is likely to grow in the medium to long term.

Profile

◉ Masamichi Matsushima

Monex University Crypto Asset Analyst, Monex Securities

Graduated from the Faculty of Economics at Osaka University. After leaving a city bank, he was a founding member of a cryptocurrency-related startup, engaged in industry research and market analysis. In 2018, he joined the Monex Group. At Monex Crypto Bank, he wrote industry research reports such as "Blockchain Trends in China (2020)" and "Blockchain DataBook 2020", and currently oversees the web3 newsletter and research report "MCB RESEARCH". He also contributes to many domestic media outlets. He has been in his current position since March 2021.