Welcome back to DV Chain's Weekly Market Commentary! In this edition, we cover significant developments, including the SEC suspending its investigation into Ethereum, Microstrategy's latest Bitcoin acquisition, and movements in seized Bitcoin by the German government. Additionally, we highlight a few key upcoming events and trade catalysts. Lets dive in:

Market Recap

• The SEC suspends investigation into whether Ethereum is a security, marking a large victory for Cryptosome text
  • Further supports that the US regulatory landscape is softening
    
    
• Microstrategy acquired $800m of BTC
  
  
• The German government holds about $3B in BTC that they seizedsome text
  • Early last week they moved $600m worth, sending some to exchange wallets
    
    
• Mt.Gox To Distribute Bitcoin, Bitcoin Cash Repayments Starting Beginning Of July 2024some text
  • Market gapped lower on the headline
  • It’s unclear how much of the distributed coins will hit the market, as a lot of claims were bought throughout the drawn out bankruptcy process
  • This has been on the market’s radar for a long time now (initially expected October 2023) but it’s another factor to watch in the ETH/BTC ratio as we expect some of these BTC and BCH to rotate into ETH and other coins.
    
    
• Between the German government news and the Mt. Gox news, BTC traded down 6% on the week
  
  
• Although Alts are down massively on the year relative to BTC, this weeks BTC move down seemed to be more idiosyncratic, as BTC led the market lower
  
  
• Jump Crypto President Kanav Kariya steps down
  
  
• Light Protocol and Helius Labs introduce ‘ZK Compression’ to further scale Solana apps
  
  
• This weekend’s trading volumes was one of the lowest all year, typical of summer seasonality
  
  
• This upcoming week has a lot in store:some text
  • GDP on 27th
  • PCE on the 28th
  • Trump and Biden debate on CNN on the 27th
  • Spot ETH ETF S-1s expected to be approved this week or next, based on prior ETF filing timelines
  • Month End / Quarter End this Friday, so a lot of derivs will expire/roll

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Upcoming Catalysts / Trade Ideas

• $ETHsome text
  • The market still seems to have low expectations of the ETH ETF
  • With Derivatives lightly positioned, perps trading under spot, and much less overhang in ETHE as compared to GBTC, the launch of the ETH ETF has much less supply pressure as compared to the launch of the BTC ETF, and therefore has a lot of potential to surprise to the upside depending on flows
    
    
• $LDOsome text
  • DeFi as a sector is likely to benefit from the ETH ETF
  • LDO fundamentally is a very strong project, clipping almost $200m in fees on an annualized basis to its treasury
  • It has maintained majority of market share in the LST/LRT space, despite higher temporary yields in new competitor’s liquidity bootstrapping farms
  • From an institutional standpoint, it is much stronger than competitors in terms of safety and network effects. The Lido Dao’s roadmap prioritizes institutional adoption, which we think is an astute plan, given the recent interest in crypto and tokenization from Wall Street
  • The ongoing developments in US Policy stance is a potential spark for the revival of DeFi tokens
    
    
• $ASI Launch, 7/1some text
  • Originally set for 5/24, and then 6/13 the merger was delayed again and now slated for 7/1
  • $FET, $AGIX, and $OCEAN merge and get converted to $ASI
  • As the 3 tokens all convert to $ASI, there is an arbitrage opportunity since $FET trades at a premium to $AGIX and $OCEAN
  • $FET holders will benefit from selling into $AGIX or $OCEAN prior to the conversion

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