Summer Heat Weakens Bitcoin and the Cryptocurrency Market

  • The month of June brought momentum to Bitcoin with BlackRock’s spot Bitcoin exchange-traded fund (ETF) application, but July sent the price into a slump.
  • NFTs were affected by the bear market. However, in July, interest in NFTs decreased so much that even classic collections dropped to pre-2021 levels.
  • The DeFi sector is also struggling with similar issues, as an unprecedented security vulnerability was discovered and exploited.

The frenzy around the spot Bitcoin ETF that started in June significantly boosted positive sentiment, but this effect later diminished and the market weakened.

The Crypto Market Weakened with the Summer Season Effect

bitcoin-btc (1)

The month of June brought momentum to Bitcoin with BlackRock’s spot Bitcoin exchange-traded fund (ETF) application, but July sent the price into a slump. Only some altcoins were able to perform well in response to Ripple Labs’ partial victory against the U.S. Securities and Exchange Commission (SEC). XRP, the most notable beneficiary, showed a monthly increase of 49%.

The market’s reaction to the outcome of the case was much calmer than expected, as a decision regarding XRP sales cannot be easily generalized to other coins and tokens. The SEC is now expected to definitively appeal, and market activity generally weakens during the summer months.

To explore how various sectors of the digital asset space performed in this environment, COINOTAG’s “Investor Insight Report” provides a concise monthly summary of what’s happening in the crypto world. It delves into venture capital, derivatives, decentralized finance (DeFi), regulation, mining, and much more.

NFTs were affected by the bear market. However, in July, interest in NFTs decreased so much that even classic collections dropped to pre-2021 levels. The base price of the Bored Ape Yacht Club fell below 30 Ethereum, and the top five NFT collections in terms of lifetime earnings only collected $800,000 in monthly royalties.

The weak figures combined with negative news surrounding the well-known blue-chip NFT project Azuki. AzukiDAO proposed suing Azuki’s founder and recovering the lost 20,000 ETH due to alleged rug pulls.

The DeFi sector is also struggling with similar issues, as an unprecedented security vulnerability was discovered and exploited. Weaknesses in DeFi are often due to poorly implemented smart contracts, but this time the Vyper programming language – an alternative to Solidity – encountered a vulnerability, and Curve Finance was exploited with an attack exceeding $61 million.

crv-trade-volume-and-token-price

The price of CRV dropped as Curve liquidity pools were endangered. The exploited funds were returned a few days later, and the hacker accepted a 10% reward.

Crypto Stocks Maintain Their Strength

In recent months, crypto stocks have shown extraordinary strength, especially top mining stocks consistently outperforming BTC. In July as well, the market prices of tokens and coins lagged behind the performance of crypto stocks. Publicly traded crypto companies gained an average of 23.9% in share price on a monthly basis. Coinbase shares experienced a surge in mid-July in response to the outcome of the Ripple case and remained above $100 for weeks, closing the month with a 32.19% increase.

monthly-crypto-stocks-performance

MicroStrategy also recorded a similar bullish market closing, with a 27.25% increase. However, mining companies once again performed the best, with Stronghold Digital Mining shares gaining nearly 75% and TeraWulf and Riot Platforms achieving over 50% gains compared to early July levels.

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Lucien Renard
Lucien Renardhttps://en.coinotag.com/
Lucien Renard is a 24-year-old writer specializing in cryptocurrency analysis and price action. With a focus on technical analysis, Lucien provides valuable insights into market trends and potential opportunities for investors.
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