Crypto Market Forecast: The week ahead, 4th June

After posting strong gains throughout May, the crypto markets ended the month with a small pullback. The majority of the crypto markets ended the week marginally in the red with a sharp price drop on Thursday. Bitcoin ended the week down ~1% and trading at ~$8547, while the number 2 and 3 crypto assets on Brave New Coin’s market cap table, ETH and XRP ended the week down 1%, and up 5% respectively. The overall market cap for crypto rose ~0.5%.

Last week the team behind messaging app Kik launched ‘Defendcrypto’, a new campaign to defend the crypto industry against regulatory enforcement. The team is concerned that the SEC is making moves behind closed doors to ‘stifle innovation’ with blockchain projects now more worried about ‘what the SEC will think’ as opposed to ‘what is best for consumers.’ Full details are on the Defendcrypto.org website.

The campaign’s objective is to file suit against the SEC and establish that the native token of the Kik messaging platform, Kin, is not a security. ~USD 5 million worth of crypto has already been set aside by Kik for legal expenses. The public can contribute to the fund. Defendcrypto already has support from high profile players within the space, including Circle, Messari and Shapeshift.

While the Bitcoin markets were volatile, experiencing strong sell-offs during the week, the value of BTC hit an all-time high against the Argentinian Peso mid-week. Political uncertainty connected to the ongoing elections in the South American country continues to drive demand for Bitcoin. The cryptocurrency is performing as a stronger store of value than the country’s native currency which continues to lose value in international fiat markets against benchmarks like the US dollar.

There are lingering concerns that if the populist opposition party win the upcoming election in Argentina there could be a turn towards unusual macroeconomic policy, and the possibility of a ‘democracy discount’ for foreign investors of the Peso. This policy discussion threatens to further devalue the currency.

Bitcoin continues to be exhibit value as a permissionless, decentralized, macroeconomic hedge against political and economic uncertainty in nations like Argentina, Venezuela, and Iran. The immediate adoption and success of digital currencies by everyday citizens in these unpredictable economies is a strong sign of the utility and store of value potential for Bitcoin.

This week in crypto events

10th June- Smart contracts launch on the Zilliqa network

Zilliqa, a sharding enabled (scalable) platform blockchain, will enable smart contracts a week from now. This will allow stakeholders to start building on the network, potentially opening the door for the building of decentralized finance and gaming platforms on the blockchain. The price of the network’s native ZIL token has risen ~39% in the last month.

10th June- Stellar network launches major protocol upgrade

The Stellar network launches a key update a week from now that promises to improve its efficiency as a cross-currency payment transfer network. The transaction fee model will be remodified to create more transparent fees during network surge periods and volume capacity will be increased to handle bottlenecks. Stellar’s native token XLM has risen by 34% in the last month.

While most crypto assets traded red in the last week, some large-cap winners did emerge. Bitcoin SV rose nearly 90% in the last week driven by strong buying on obscure exchanges. There has also been a significant increase in the network’s median transaction value and daily transactions. Just outside of the top 10, TRX has enjoyed a good trading period. The project was in the news following reports that founder Justin Sun paid over USD 4.5 million at a charity auction to win a lunch with billionaire investor Warren Buffet.

The week started strongly, with the price of BTC touching USD 9000 on some exchanges on the 30th of May, but ended with a pullback. The price is now ranging between the 8500-8600 price levels. Bitcoin trading continues to surge on derivatives markets and on the 28th of May, for the first time ever open interest on the CME Bitcoin futures market crossed 5,000 BTC.