This week’s price volatility for bitcoin (BTC), gold, and our wildcard, the Grayscale Bitcoin Fund.
Bitcoin
While bitcoin sank sharply during the first half of June, it has hovered around $20,000 in the past two weeks. On June 16, BTC was traded around $22,500, but fell sharply over the next two days, reaching $18,000 by June 19.
Then the buying pressure returned, bringing it above $21,500 by June 21. It sank again the next day, this time slightly below $20,000, before slowly rising again over the next few days, returning to $21,500 by June 26.
From there it declined to the downside, falling below $19,000 on June 30. BTC surged on July 1, but is currently trading below $19,500.
With June approaching, bitcoin ended its worst month on record, losing more than 38% of its value. Confidence in the crypto market, in general, has been shaken in recent weeks as major companies face solvency crises and layoffs.
For example, leading crypto hedge fund Three Arrows Capital defaulted on loans worth more than $670 million earlier this week. Shares of Coinbase, which was forced to lay off about a fifth of its workforce, fell nearly 40% in June, the fourth consecutive negative month.
Matt Hogan, chief investment officer at Bitwise Asset Management, said, “There is still one aspect in crypto that we are waiting to see if another shoe will fall, if another entity will fail, if the credit cascade continues. Will stay.” “I think we have to get through the Fourth of July weekend and go through that quiet period in the market before we can build into the second half of the year.”
Sleep
Gold has been trending marginally down in the last two weeks. Traded around $1,835 on June 16, the price of gold fell before moving above $1,855 the next day. From there it fell once again to $1,825 by June 22. Despite a pair of spikes over the next two days and on June 27, 29, and 30, gold continued its downward trend, having peaked at $1,790 earlier today but is currently trading higher. About $1,800.
Gold extended its return to a third consecutive weekly decline as a stronger dollar and prospects of higher interest rates eroded its appeal. In addition, the increase in import tax by India has also shown a reduction in the demand for bullion. The European Central Bank may also start raising rates this month. “Despite the current risk-off mood and a ‘sea of red’ with financial markets, the safe haven is now the US dollar rather than the precious metals”, said independent analyst Ross Norman.
Grayscale’s Bitcoin Trust
Similar to the crypto markets overall, Grayscale’s Bitcoin Trust has seen a steady decline over the past two months. In early May, GBTC was trading slightly above $25. After rising to $27 on May 4, it dropped to around $18 by May 12. The following month, GBTC channeled between $18 and $21, before seeing a volume spike on June 13, resulting in a gap of $15. GBTC hasn’t done much better since then and is currently trading just above $12.
Earlier this week, the US Securities and Exchange Commission (SEC) rejected the conversion of Grayscale Bitcoin Trust to a spot bitcoin ETF. In its filing, the SEC said the application does not demonstrate that it was “not designed to prevent fraudulent and manipulative acts and practices” and “to protect investors and the public interest.”
In response, Grayscale Investments filed a lawsuit challenging the decision, which is expected to be resolved late next year or early 2024. Grayscale, one of the largest institutional providers of cryptocurrency investments, applied for change last year.