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Crypto Market Forecast: Week of June 7th 2022

A curated weekly summary of forward-focused crypto news that matters. This week, a key Russian official considers crypto for international transactions, President Biden outlines an inflation strategy, and the Cardano community gears up for the Vasil hard fork.

Bitcoin (BTC) varied between ~US$29.5 – 32K over the past week, gaining ~2% versus this time last week, and currently sits at right about US$30K (yet again). Almost no price change to Ether (ETH) this week (sitting right at US$1.8K) — despite a Bored Ape Yacht Club hack. Binance coin (BNB) fell by ~2% and currently sits at ~US$298.

In the wake of Russia being largely cut off from the global financial system, the Russian central bank’s First Deputy Governor Ksenia Yudaeva told reporters this week that “In principle, we do not object to the use of cryptocurrency in international transactions”. A high-ranking Russian lawmaker expressed similar sentiments in March. This positive sentiment follows a January “blanket ban” proposal from the Russian central bank on cryptocurrency mining and trading.

Whether Russia will turn to cryptocurrencies during this present conflict is anybody’s guess, but the country is pushing hard for alternatives after having been largely cut off from the SWIFT payment network. Just recently, Russia’s Gazprom shut off gas supplies to European importers that failed to comply with its new demand that payment be made in rubles. So far, Gazprom has cut off payments to importers in the Netherlands, Denmark, Poland, Bulgaria, Finland, and now, to Shell in Germany. The scheme requires European importers to create an account in euros and rubles with Russia’s Gazprombank.

Two things to watch here regarding cryptocurrency prices (if Russia was to proceed with using, say, Bitcoin for international payments). On one hand, an increase in demand for cryptocurrencies from Russia and its trading partners would have an upward push on price. On the other, if the US and EU member nations were to respond with swift, draconian measures against cryptocurrencies, this could scare investors, and thus, simultaneously apply downward price pressure.

Meanwhile, the economy looks for some sense of normality, in terms of supply chain stability and more tolerable levels of inflation. To some extent, the Fed has addressed inflation with recent rate hikes and talks of further rate hikes at least until the end of the year.

This past week, the Wall Street Journal published an op ed by President Joe Biden outlining his 3-point plan for tackling inflation: (1) not to interfere with the Fed, (2) to tackle prices, and (3) to reduce the federal deficit.

To some market participants, news of price controls may be encouraging; and to others, it may be reminiscent of Richard Nixon’s 1970s price controls and shortages that followed. Talk of reducing the federal deficit may also be encouraging to some. Following unprecedented levels of spending in the wake of COVID, student loan debt cancellation and financial support for Ukraine, the market may see these as “mixed signals”, increasing uncertainty.

When the market will reach a sense of “normality” is anyone’s guess. For now, the price directions of crypto assets remains as uncertain as everything else.

Crypto news for the week ahead

9 June

As part of its algorithmic monetary policy, the Monero (XMR) blockchain will begin a so-called “tail emission” this week to ensure that block rewards do not fall to zero, thereby keeping miners incentivized.

9-12 June

Consensus 2022 will take place this week in Austin, Texas and host a long list of many of the top names in the crypto/Blockchain world as speakers — from both the public and private sector.

Sometime in June

The Cardano (ADA) community awaits the “Vasil hard fork” of its blockchain. The upgrade hopes to achieve lower transaction fees.

Top 10 Crypto Summary

BNC - top 10 market cap - 5 June 2022-min

A strong week for Cardano (ADA) — up almost 18% versus the previous week — as users anticipate the upcoming Vasil hard fork that promises to reduce transaction fees through four Cardano Improvement Proposals (CIPs). Meanwhile, crypto assets in general reflect the present “crypto winter” — with Bitcoin down by more than half its November 2021 all-time high. The most recent drop came in early May 2022, following the Terra/Luna disaster.

Bitcoin Price Chart

BNC - BLX - 5 June 2022-min

Glassnode’s on-chain Bitcoin blockchain special report this week noted that long-term “price insensitive HODLers” appear to be doubling down — many of which purchased above the US$50K price point. Glassnode’s analysis highlights that bear markets filter out less committed investors, leaving those with “stronger conviction”.


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