Bitcoin, Ether and all other top 10 non-stablecoin cryptocurrencies dipped in Thursday morning trading in Asia. While Bitcoin and Ether price volatility remains low, analysts suggest turbulence is on the horizon due to the upcoming decision on BlackRock’s Bitcoin ETF application and next year’s Bitcoin halving event. Conversely, Litecoin — which had its own halving event on Wednesday — posted the morning’s biggest drop among top 10 cryptos. The Forkast 500 NFT Index was down, while U.S. equity futures gained, partially recovering from a dip during regular trading on Wednesday.
Anticipation building
Bitcoin lost 0.12% in the last 24 hours to US$29,171.97 as of 6:45 a.m. in Hong Kong, according to data from CoinMarketCap. The world’s largest cryptocurrency briefly fell below the US$29,000 support line to a low of US$28,946.51 overnight.
Ether also fell 0.35% to US$1,842.19 for a weekly loss of 1.50%.
Bitcoin and Ether’s price volatility is at an unprecedented low, said Luuk Strijers, chief operating officer at Panama-based crypto derivatives exchange Deribit.
“However, it’s important to note that the market anticipates a considerable upswing in volatility,” Strijers said. “This is largely driven by factors such as the upcoming ruling on the BlackRock spot ETF and the approaching Bitcoin Halvening.”
In June, BlackRock — the world’s largest asset manager — filed an application to list a spot Bitcoin exchange-traded fund (ETF) for the U.S. market. The U.S. Securities and Exchange Commission (SEC) formally accepted the application for review on July 13. The regulator now has a maximum of 240 days to accept or reject it.
Analysts at Bloomberg Intelligence this week upgraded their estimate for the chance the application would be approved from 50% to 65%, based on recent events including SEC chair Gary Gensler downplaying his role at the agency.
Earlier this week, six major U.S. asset managers including Grayscale and VanEck filed applications to launch ETFs for Ethereum futures.
“Now we are once again seeing a flurry of applications for futures-based Ethereum ETFs, including an inverse “short” ETF from Proshares,” said Bradley Duke, founder and chief strategy officer at crypto exchange-traded product provider ETC Group.
“There seems to be a growing acceptance at the SEC that crypto is an inevitable part of America’s investment landscape, and this is good news for crypto investors and service providers around the world,” Duke said.
Meanwhile, Bitcoin’s next halving event is expected to take place in April 2024. The halving event will see the amount of new Bitcoin issued every 10 minutes cut in half from 6.25BTC to 3.125 BTC, increasing its scarcity. This is widely anticipated to produce a surge in the token’s price.
However, professional market trader and finance author Peter Brandt predicted on Twitter last week that both the halving of Bitcoin and the “inevitable” approval of the BlackRock’s spot Bitcoin ETF in the U.S. will disappoint the optimists.
“Over 48 years of speculation I have learned again and again that markets discount events before the events are events,” wrote Brandt.
All other top 10 non-stablecoin cryptocurrencies by market capitalization were down.
Litecoin led the losses, falling 6.44% to US$87.37 and is down 2.83% for the week. The Bitcoin-inspired cryptocurrency completed its halving event on Wednesday, which cut mining rewards in half for the token. Bloomberg reported that a Litecoin price drop followed its two prior halvenings. That is the opposite effect of Bitcoin halving events, which tend to produce a positive impact on price.
Dogecoin also dipped 3.44% to US$0.07465 for a weekly decline of 4.35%. XRP also slipped 2.28% to US$0.6874, losing 4.16% in the past seven days as the shine comes off the recent ruling in favor of issuer Ripple in the case brought against it by the SEC.
The total crypto market capitalization fell 0.26% in the past 24 hours to US$1.17 trillion, while trading volume rose 9.49% to US$40.52 billion.
Time to shine for smaller NFT projects
The Forkast 500 NFT index fell 0.61% in the past 24 hours to 2,490.35 as of 9:30 a.m. in Hong Kong. That drop contributed to a decline of 5.61% for the week and 9.56% for the month. Forkast’s Ethereum, Solana, Polygon and Cardano NFT market indexes all also logged losses.
Total NFT trading volume fell 13.77% in the past 24 hours to US$17.86 million, according to data from CryptoSlam.
Ethereum remained the top NFT network in terms of trade volume, but slipped 12.02% to US$12.20 million. Solana placed second in Cryptoslam’s blockchain ranking, gaining 24.80% to US$1.06 million.
In terms of trade volume, NFT staple Bored Ape Yacht Club continued to top the collections chart as it rose 60.07% to US$1.23 million over the past 24 hours.
Ethereum-based CryptoPunks ranked second in terms of sales volume. The collection added 2.54% to US$1.13 million, after Charleston-based digital artist Mike Winkelmann, better known as Beeple, announced the purchase of his first CryptoPunk on Thursday.
“He chose a fitting clown nose, joker eyes, mohawk punk, and when you see it you’ll probably agree — It screams “Beeple,”” wrote Yehudah Petscher, NFT strategist for Forkast Labs. “Coming in at over $200k, it’s a pricey flex, but well worth it to have a stake in the iconic NFT collection.”
The DMarket and Gods Unchained Cards collections — which both provide in-game NFT items such as skins and other assets — ranked third and fourth in terms of sales volume. Petscher previously commented that sales of in-game assets of this kind are proving to be “bear market resistant,” staying in the top 5 ranking for an extended period.
Polygon-based DraftKings NFT collection, from the sports betting entertainment platform of the same name, ranked ninth on Cryptoslam despite a 50.93% decline to US$394,603. The BNB chain-based PLAYNFT collection placed tenth, dipping 8.64% to US$221,070.
PLAYNFT describes itself as a “cross-chain NFT utility platform” that connects NFT holders and creators to in-game content in blockchain-based games.
“The market itself had a decent day in the green yesterday, with highest total sales since July 20th, but a decrease in sellers, buyers and total transactions from the prior few days,” wrote Petscher.
“Lower volume on Ethereum gives projects on other chains a chance to shine, and that’s what we’re witnessing now with new projects entering the top 10 almost daily,” he added.
U.S. equity futures mixed after Wednesday decline
The three major U.S. stock futures indexes were mixed as of 11:00 a.m. in Hong Kong following a considerable decline during regular trading on Wednesday.
In Asia, the main stock indexes saw a second straight day of decline, with Japan’s Nikkei 225 falling by 1.42%. China’s Shanghai Composite, Hong Kong’s Hang Seng index and South Korea’s Kospi were all also down.
Purchasing managers’ indexes in Japan and Hong Kong for July also declined below expectations. Hong Kong saw its private sector contract for the first time since December 2022.
Global equity markets are showing the strain of the Fitch Ratings credit agency’s downgrade of the United States’ long term credit rating from AAA to to AA+. The decision, announced Tuesday, arrives after the U.S. debt ceiling standoff between Republican and Democratic lawmakers that threatened to derail global markets earlier in the year.
U.S. Treasury Secretary Janet Yellen called Fitch’s credit downgrade “arbitrary and based on outdated data,” while White House officials released their own statement Tuesday saying they “strongly disagree” with the decision.
“The ratings model used by Fitch declined under President Trump and then improved under President Biden,” said the White House statement.
Elsewhere, Wednesday’s second quarter earnings reports from U.S. corporations were mixed. PayPal, Robinhood, Etsy and Qualcomm Technologies stocks slipped after posting disappointing quarterly results, while Ferrari, DoorDash, Tripadvisor and Unity Software announced positive earnings.
Later on Thursday, U.S. heavyweights Apple and Amazon will announce their Q2 earnings.
Meanwhile, the Federal Reserve — on summer recess in August — next meets to discuss interest rates on Sep. 19 and 20. After a 25 basis point hike in July, rates now stand between 5.25% to 5.50%, the highest since January 2001.
In a Tuesday report, Bloomberg’s chief U.S. economist Anna Wong said that the Fed will likely hold rates steady at the September meeting. She said that softer wage growth and personal consumption data point to progress on disinflation.
The CME FedWatch Tool predicts an 82% chance that the Fed will leave the interest rate unchanged at the next meeting. It predicts an 18% chance of another 25-basis-point hike.
(Updates to add equities section)