🌳 China and EU Hosted Discussions Over the Recent EV Tariffs; Multiple Asset Managers Submitted Updated Proposals to Their ETH ETFs

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Our Daily View

What We Are Covering Today

• China initiated talks with the EU over the 48% EV tariff; Chinese authority promotes VC activities amidst regulatory scrutinies (More in Macro & TradFi)
• Asset managers submit Ethereum ETF proposals; Standard Chartered launches Bitcoin and Ethereum trading desk (More in DeFi & CeFi)
• Victim exploited for $8.7M worth of $MKR tokens and $2.4M worth of PT Ethena tokens; 21M $LINK tokens worth $295M unlocked (More in On-Chain)
• BTC C-P 7-day and 30-day skews align; 75% of weekend liquidations were longs. (More in Crypto Derivatives)
• BTC’s price action forms a descending channel; ETH RSI level approaches oversold territory (More in Crypto Technical Analysis)

Macro & TradFi

China and the European Union have agreed to initiate talks regarding the EU's proposed tariffs on electric vehicles (EVs) imported from China. The decision follows recent EU announcements of potential tariffs reaching up to 48% on Chinese EVs starting in July, escalating trade tensions between the two entities. The consultations were confirmed after a video conference between Chinese Commerce Minister Wang Wentao and EU Trade Commissioner Valdis Dombrovskis. Both sides characterized the discussions as "candid and constructive", committing to engage based on factual information and in adherence to WTO rules. The talks are expected to continue at various levels in the coming weeks as they seek an effective resolution to the trade dispute.

Meanwhile, Chinese authorities have also introduced new policies aimed at revitalizing venture capital (VC) activities amidst a recent slowdown exacerbated by regulatory scrutiny. The State Council's measures, announced to promote "high-quality development of venture capital," focus on improving the IPO approval process and expanding exit channels for VC investments. Marcia Ellis from Morrison Foerster highlighted the critical need for clearer IPO pathways to attract VC investments, which have been deterred by uncertain exits in recent times. The reforms also aim to streamline overseas listing management and foreign currency exchange rules, which is crucial for facilitating smoother exits for VC funds. Despite previous challenges, including tightened regulations post-Didi's controversial U.S. listing, optimism remains for increased IPO approvals and supportive measures to foster innovation and growth in China's venture capital ecosystem.

Lastly, on Friday, U.S. stocks showed mixed results as the Dow Jones Industrial Average edged up by less than 0.1%, marking a weekly gain of 1.5%. Conversely, the S&P 500 and Nasdaq Composite each fell 0.2%. Semiconductor stocks, including Nvidia, Broadcom, and Micron, continued their decline for a second consecutive day, contributing to the Nasdaq's downturn. Treasury yields rose following strong PMI data indicating robust U.S. business activity growth in June, which tempered expectations of imminent Federal Reserve interest rate cuts. In individual stock movements, Alphabet reached a record high with a 1.9% gain, while Nvidia fell 3.2% amid ongoing regulatory concerns and profit-taking after briefly becoming the world's most valuable company earlier in the week. Investors will be looking out for the US Core PCE Price Index due this Friday at 20:30 SGT.

DeFi & CeFi

• Asset managers update proposals for Ether ETFs, eyeing July launch
• Standard Chartered Is building a spot BTC, ETH trading desk
• Pantera believes Solana will dominate blockchain sector, compares its rise to Apple’s breakthrough with macOS
• Bitcoin offers ‘economic immortality,’ will reach $10M per coin— Michael Saylor
• Artela extends blockchain functionality, details new parallel architecture

Several asset managers, including VanEck, BlackRock, Grayscale, and Invesco Galaxy Digital, submitted updated proposals for Ethereum ETFs to the U.S. Securities and Exchange Commission (SEC) on June 21. These filings are among the final steps before launching the funds, anticipated in early July. VanEck’s filing includes a 0.20% management fee, putting pressure on BlackRock and others to remain competitive. The SEC recently approved a rule allowing the listing and trading of eight spot Ether ETFs. Fidelity's updated filing disclosed a $4.7 million seeding by FMR Capital, while Bitwise included a potential $100 million investment from Pantera Capital. Hashdex is also seeking approval for a new ETF combining spot Bitcoin and Ether. This wave of filings and approvals marks significant progress in the mainstream adoption of Ethereum-based financial products.

Elsewhere, Standard Chartered is launching a spot trading desk for Bitcoin and Ethereum, becoming one of the first global banks to directly trade these cryptocurrencies. The London-based desk will operate within the bank's FX trading unit, marking a significant step in Standard Chartered's digital asset strategy. Already a supporter of digital asset custodian Zodia Custody and its exchange Zodia Markets, the bank aims to meet institutional demand and enhance its role in the digital asset ecosystem. This move signals a broader acceptance and integration of cryptocurrency trading within traditional financial institutions. Binance’s CEO Richard Teng has expressed support for this trading desk, positioning the bank among the first major financial institutions to offer direct trading services for these digital assets.

On-Chain

Lookonchain identified a phishing attack that caused the victim to lose approximately $11.1M of tokens in value; 3,657 $MKR worth $8.7M and 2.56M PT Ethena tokens worth $2.4M. As a consequence of the immediate sale of the $MKR tokens, the price of $MKR dropped by 7%. Traders should take note of this event that led to the price action of the $MKR token, and safeguard themselves against phishing attacks by staying informed about common tactics, always verifying sender identities and URLs, and using security features like multi-factor authentication.

In a separate analysis by Spotonchain, 21M $LINK tokens worth $295M were unlocked from Chainlink’s non-circulating supply contract. Specifically, 18.25M tokens worth $264M were sent to Binance, and 2.25M tokens worth $31.3M were sent to a Multisig address starting with 0xD50f. This significant token unlock implies huge supply inflation, which could lead to increased market volatility and price fluctuations should selling pressure increase.

Derivatives

• Funding rates remained positive for BTC and ETH.
• Deribit Implied Volatility Index (DVOL) for BTC rose to 47.77% while that of ETH dropped to 64.79%.
• The 30-day 25-delta skew (C-P) for BTC decreased to -0.23% while that of ETH remained flat at 5.17%.
• The futures market witnessed $256.1M in liquidations on Monday, with longs representing 75.39%.

Today's BTC implied volatility (IV) chart for ATM maturities shows a clear trend where the 7-day and 30-day IV have recently experienced a significant rise, suggesting an increase in volatility expectations among traders. The relatively steadier long-term IV as compared to the short-term IV indicates that while traders are reacting to immediate market factors or news, their longer-term outlook remains less volatile, expecting smoother market conditions ahead.

BTC’s shadow term structure maintains its contango shape. The initial sharp drop in Mark IV quickly stabilizes to a flat line, indicating a uniform long-term market outlook.

The BTC skew chart for today shows the 7-day and 30-day skews tracking closely with minimal fluctuations, maintaining a steady pattern across the observed period. This consistency suggests a balanced market sentiment where traders are neither excessively bullish nor bearish, indicating stability in short to medium-term volatility expectations.

Lastly, @Paradigm option flows highlighted structured solutions for different customized strategies. Key BTC trades encompassed the procurement of 1220x 27-Sep-24 90k/27-Dec-24 75k Custom Call Spreads and 537x 28-Jun-24 64k/68k Bear Risk Reversals. Significant ETH trades included the acquisition of 43500x 27-Sep-24 4000 Calls and 9000x 27-Sep-24 3500/4500 Call Spreads.

Crypto Technical Analysis

On BTC’s 4-hour chart, BTC price actions formed a descending channel, signifying a sustained selling pressure in the market that resulted in lower highs and lower lows. The price of BTC is currently $63.2K, where the upper trendline represents a resistance level at approximately $64K and the lower trendline acts as the support level at $61.5K, a 2.6% decline. In a declining trend, the RSI is currently at 31.11, indicating that BTC is approaching oversold territory. Traders should be wary if bearish sentiment were to persist which could indicate increased selling pressure.

Similarly, on the ETH 4-hour chart, bearish sentiment is in play as characterized by the prominent red candle from the previous session. The price of ETH is currently trading at $3.4K, still within the area of consolidation, but approaching the support levels of $3.3K, a 2.9% decline. Should the price of ETH break past this support level, the subsequent support lies at $3.1K, formed by previous levels of resistance. The RSI trend suggests that market participants are leaning towards a bearish sentiment with the RSI at 36.07, approaching oversold territory. Traders should monitor for any breakout above resistance or below support as it could signal a potential trend shift.

Access institutional-grade commentary on TradFi × Crypto markets

By Treehouse Research

Daily Readings

TradFi

• EU and China set for talks on planned electric vehicle tariffs

• Japan Says It’s Ready to Intervene in Currency Markets 24 Hours a Day If Needed

• Netanyahu Says Major Operations in Gaza Will End ‘Very Soon’

• Asia-Pacific markets slip; Australia and Japan inflation readings expected this week

• French trust Marine Le Pen’s RN most on economy, FT poll suggests

• US millionaires support Biden’s plan to tax super-wealthy, poll shows

• Yaccarino shakes up X amid pressure from Musk over costs

• China talks up support for IPOs. Investors are watching the speed of approval

• Houthi claims of attack on U.S. aircraft carrier are false, U.S. officials say

Crypto

• Asset managers update proposals for Ether ETFs, eyeing July launch

• Bitcoin offers ‘economic immortality,’ will reach $10M per coin— Michael Saylor

• Pantera believes Solana will dominate blockchain sector, compares its rise to Apple’s breakthrough with macOS

• Binance CEO welcomes Standard Chartered move to launch Bitcoin trading desk

• DARPA release highlights difficulty in developing quantum finance solutions

• Layer-2 rollups must decentralize sequencers or face the consequences

• MakerDAO delegate’s $11M in tokens stolen in phishing scam

• EigenLayer enhances EigenDA security to combat Sybil attacks

• Binance assists BtcTurk attack probe, freezes $5.3M in ‘stolen funds’

• 1,590 CoinStats crypto wallets ‘affected’ in security breach

• Hong Kong invites global opinions on future of Web3 and digital assets

• Michael Dell’s Bitcoin post sparks massive BTC purchase speculations

• Winklevoss twins refunded for exceeding Bitcoin donation limit to Trump

• Bitcoin miners are treading water, but no alarms of a ‘total firesale’

• Blockchain Association objects to IRS broker rule in letter

Deal Flow

• SoSoValue Raised $4.15M Seed Funding to Lead AI-Driven Crypto Investment Research Revolution

• Web3 Gaming Company Saltwater Raises $5.5M Seed Funding

Yours sincerely,
Treehouse Research 🌳