June 2024 has been a month of contrasts for Bitcoin, with market volatility, legislative action, and growing global adoption. Here’s a comprehensive review of Bitcoin’s key developments and their impact on the future.

Market Dynamics

Bitcoin was priced at $67,741 at the beginning of June, before falling 15.2% to close at $61,529. The Crypto Fear and Greed Index fell to its lowest level in 18 months, reflecting a drop in investor confidence. The drop was driven by major factors such as the German government's sale of more than 27,000 bitcoins and repayments from the collapsed Mt. Gox exchange.

Despite this decline, Bitcoin’s dominance reached 52.92% on June 15, its highest level since April 2021, suggesting that Bitcoin is still viewed as a relatively stable asset in the crypto space.

Government Actions and Market Influence

The German government's sale of Bitcoin and the U.S. government's transfer of Bitcoin to Coinbase have raised concerns about increased selling pressure. In addition, the long-awaited repayment of the trustee of the defunct Mt. Gox began in June, further adding liquidity to the market. However, experts say these sales represent only a small part of the market and should not cause panic among investors.

German government’s on-chain moves towards Bitcoin.

Analyst Insights

Analysts have mixed views on the outlook for Bitcoin prices. Some, such as 10x Research, predict that Bitcoin prices will fall further below $50,000 due to weakening investor interest and increased selling activity. In contrast, Bernstein analysts are optimistic, predicting that by the end of 2025, Bitcoin prices will be close to $200,000, driven by the growing popularity of spot Bitcoin exchange-traded funds (ETFs).

Bitcoin adoption continues to grow

Despite the price crash, there are still positive signs for Bitcoin adoption:

• Strike Expansion : Bitcoin payments app Strike has launched in the UK, expanding its coverage to 100 countries and territories. The expansion highlights the growing global demand for bitcoin payment solutions.

• Bolivia legalizes Bitcoin : Bolivia has lifted its ban on Bitcoin, allowing financial institutions to offer transactions involving digital assets. The move is expected to modernize Bolivia's payment system and potentially revive its struggling economy.

• PortalPay for Blockchain Gaming : Portal has launched PortalPay, a blockchain gaming interoperability solution that aims to become the “Stripe of crypto” by lowering the barrier to entry for players interested in blockchain video games.

Bitcoin Daily Active Addresses

Daily active addresses of Bitcoin in the past 3 months. Data source: Artemis

In June 2024, the number of Bitcoin transactions reached 17.42 million. Source: The Block

Spot Bitcoin ETF attracts capital inflows

Despite the market downturn, spot Bitcoin ETFs have seen significant inflows, indicating strong investor interest. Even during the broader market decline, these financial products have managed to attract net inflows, demonstrating Bitcoin's resilience and growing confidence as a viable investment. BlackRock and Fidelity's spot Bitcoin ETFs have accounted for a large portion of the issuer's total ETF inflows over the past three months.

Signs of miners' capitulation

The Bitcoin network is showing signs of miner capitulation, with hashrate and mining profitability declining. Despite these challenges, some mining companies are continuing to expand and invest in new technologies. For example:

• CleanSpark has purchased five mining facilities in Georgia and expects the combined operating hash rate to exceed 3.7 EH/s.

• IREN (formerly Iris Energy) has raised $413 million to fund its bitcoin mining expansion, with the goal of reaching 30 EH/s of hash rate capacity and 510 MW of data center capacity this year.

• Core Scientific announced a $3.5 billion deal with AI cloud provider CoreWeave to provide additional infrastructure for high-performance computing (HPC) operations.

Innovation and security issues

The Bitcoin ecosystem continues to innovate, with new protocols and scaling solutions emerging. The Runes protocol, launched in April 2024, has quickly become a major player in the Bitcoin ecosystem by providing a new way to issue tokens on top of Bitcoin. Since its launch, Runes has generated a total of 2,536 BTC in fees, making a significant contribution to miners' revenue.

However, security remains a key issue, with significant losses reported in the second quarter of 2024 due to hacks and scams. Immunefi reported that $572.7 million was lost to hacks and scams, highlighting the need for improved security measures within the Bitcoin network.

Bitcoin NFTs Have a Mixed Performance

The NFT market faced challenges in June, with sales down 25% across major blockchains. However, Bitcoin-based NFT sales grew by more than $116.3 million, highlighting Bitcoin’s potential in the NFT space. Series such as Bitcoin Puppets and NodeMonkes led in terms of trading volume, though overall market activity was mixed.

Top 10 blockchains by NFT sales. Source: CryptoSlam

Legislative and regulatory developments

June also saw significant legislative developments affecting the broader financial and cryptocurrency markets. A bipartisan group of 20 U.S. senators agreed on legislation that would prohibit all members of Congress from trading stocks. While such regulatory moves are not directly related to cryptocurrencies, they could have downstream effects on the perception and regulation of cryptocurrencies.

In another positive move for the crypto industry, the U.S. Senate Armed Services Committee urged the Department of Defense to explore blockchain applications in national security, including supply chain management. The recommendation reflects the potential of blockchain technology to improve security and efficiency in key areas.

Company Relocation and Expansion

Despite the challenging market environment, several companies continue to invest in and adopt Bitcoin:

• In June, Metaplanet increased its Bitcoin holdings to over 10 million, purchasing 20,195 BTC worth $1.2 million.

• DeFi Technologies announced that it will hold Bitcoin as its main reserve asset, and its subsidiary Valour also had positive news, with the company managing $607 million in assets.

in conclusion

June 2024 marks a month filled with significant challenges and hopeful developments for Bitcoin. While market movements and government actions create volatility, continued global adoption and innovation within the Bitcoin ecosystem bodes well for long-term resilience and growth. As the market navigates these complexities, enhancing security, expanding adoption, and fostering technological advancement will be critical to maintaining Bitcoin’s growth and stability.