Market highlights
- Bitcoin declined below US$60k on strong U.S. jobs data and Middle East tensions.
- The first bitcoin-backed mortgage was approved in the U.S., allowing for BTC as collateral.
- U.S. Treasury Secretary Bessent said plans for a U.S. Strategic BTC Reserve are progressing.
- U.S. House Republicans unveiled seven crypto tax bills ahead of a congressional hearing.
- The UK's Financial Conduct Authority issued a warning against HYPE.
- New York State regulators partnered with Europol to strengthen oversight of stablecoins.
Macro market overview
The sustained rally across TradFi risk assets pulled back on Friday, June 5 as market participants scaled back their exposure to tech stocks on concerns over high valuations and presumably some profit-taking. The weakness was exacerbated by the strong May non-farm payroll (NFP) change, which came in at 172,000—well over the forecast 85,000. Treasury yields gained on the strong employment data, with the ten-year yield rising to over 4.5% as markets grow concerned that the U.S. Federal Reserve may raise interest rates later this year. CME's Fed Watch tool puts the likelihood of rates staying on hold at the U.S. Federal Reserve's June 17 meeting at 98%, while there's currently a 42.2% chance of a 25-basis-point hike at the December meeting.
While risk assets declined, oil prices gained 4.6% throughout the week on escalating Middle East tensions. U.S. futures declined into the new week as Iran launched attacks on Israel for the first time since April. Israel retaliated hours later. The escalating tensions raise concerns over when or if a ceasefire will be reached, which may increase risk-off sentiment into the new week.
This week, market participants will presumably monitor developments in the Middle East, U.S. inflation data and interest rate decisions from the Bank of Canada and European Central Bank.
Weekly performance: S&P 500 -2.6%, Dow Jones -0.3%, Nasdaq -4.7%.
Looking ahead:
- U.S. core consumer price index - Wednesday, June 10
- Bank of Canada rate decision - Wednesday, June 10
- European Central Bank rate decision - Thursday, June 11
- U.S. core producer price index - Thursday, June 11
Crypto Market Performance
Market Cap: $2.18T (+0.6%)
All crypto sectors declined last week on risk-off sentiment brought about by concerns over interest rates staying higher for longer, market shock after Strategy sold bitcoin for the first time since 2022 and escalating Middle East tensions. The crypto fear and greed index has declined to extreme fear at 15.
Bitcoin (BTC)
- Opened the week at US$73,575 and declined to a weekly low of US$59,073 on Friday, June 5 as risk-off sentiment gained momentum on escalating Middle East tensions, the strong May NFP report and the risk of interest rates remaining higher for longer. Bitcoin has since regained some strength and is now trading around US$63,420 (-11% 7D), as US$540 million in BTC shorts were liquidated on the rebound.
- BTC dominance ranged between 57.9% and 59.8% this week.
- Bitcoin investment products saw outflows of over US$1.7 billion.
The first bitcoin-backed mortgage was approved in the U.S. this week, meaning day-to-day price fluctuations won't trigger margin calls or sudden liquidations. It follows the U.S. Federal Housing Finance Agency directing Fannie Mae and Freddie Mac to explore recognising cryptocurrency holdings in mortgage risk assessments. The move allows homebuyers to use bitcoin and other digital assets held on regulated U.S. exchanges as collateral when applying for loans.
U.S. Treasury Secretary Scott Bessent said plans for a U.S. Strategic Bitcoin Reserve are progressing at a "deliberate speed" as the administration works through implementation details. The reserve was established through an executive order earlier this year and is expected to be funded initially with bitcoin seized through criminal and civil asset forfeiture proceedings. Bessent also urged lawmakers to pass the CLARITY Act this summer.
In bitcoin buying (and selling) news:
- Strategy bought 1,550 BTC (US$101 million), bringing its total holdings to 845,246 BTC at an average purchase price of US$75,680.
- Strive Asset Management bought 2,500 BTC, bringing its total holdings to 19,000 BTC (US$1.3 billion). The firm also announced plans to increase its stock issuance program by US$4.2 billion. Its variable-rate product, SATA, offers a 13% annual dividend paid daily. Benchmark-StoneX classified Strive as a "buy" on the news.
Past performance is not a reliable indicator of future results.
Ethereum (ETH)
- Opened the week at US$2,004 and declined to a weekly low of US$1,505 on Saturday, June 6 due to risk-off sentiment. Ethereum is now trading around US$1,700 (-15% 7D).
- Ethereum dominance ranged between 9% and 10% this week.
- Ethereum-focused funds saw outflows of US$174.4 million.
Ethereum is trading at its cheapest relative valuation in nearly seven years, according to crypto analytics firm CryptoQuant. The assessment is based on Ethereum's market value-to-realised value ratio, a metric used to gauge whether an asset is over- or undervalued. The report suggests Ethereum may be undervalued compared with historical levels, despite growing institutional adoption.
In Ethereum buying news:
- BitMine bought 126,971 ETH (US$214 million), its biggest ETH buy of 2026. The company now holds over 5.5 million ETH, worth US$9.3 billion and equating to almost 4.6% of supply. The company raised US$274 million this week by selling 3.5 million preferred stock shares. The proceeds will be used to fund further ETH purchases.
Past performance is not a reliable indicator of future results.
Altcoins
The altcoin season index is currently 47, which is bitcoin season.
Layer one declines
- Sei declined by 29.5% on broader risk-off sentiment. A 38% decline in network activity on the layer-1 chain designed for DeFi trading presumably caused further downside.
- Aptos declined by 28% to a new all-time low of US$0.62. Despite the recent declines, on-chain data shows that over 1.7 billion transactions have been settled in the last 180 days, with daily transaction volume hovering between 5 million and 19 million.
- Cardano declined by 25.4%. The layer-one chain declined to a six-year low of US$0.21 on broader risk-off sentiment. This week, the network cancelled its flagship conference as two thirds of the community voted against holding the conference.
- Avalanche declined by 23.7%. The layer-one chain designed for building and hosting dApps declined due to broader risk-off sentiment and heavy short selling, with 70% of traders short on the token. This sell pressure may be due to the CME Group's recent launch of AVAX futures, which has made it easier for traders to short or hedge the cryptocurrency.
- Algorand declined by 23%. The network designed for DeFi and real-world assets saw declines on risk-off sentiment and the sell pressure that came with the Algorand Foundation's 25% reduction in headcount in March.
Hype warning
- Hyperliquid declined by 14.9%. The UK's Financial Conduct Authority has issued a warning against the decentralised exchange, stating that it is not authorised to provide financial services in the country. The warning comes amid growing regulatory scrutiny of perpetual futures products, which have become a major driver of activity in crypto markets.
Crypto ETF News
Digital asset investment products saw outflows of over US$1.3 billion as risk-off sentiment continued across crypto.
In altcoins, Solana saw outflows of US$6.3 million, while XRP and HYPE saw inflows of US$2.6 million and US$17.2 million, respectively.
Other crypto news
- U.S. House Republicans unveiled seven crypto tax bills ahead of a congressional hearing before the Ways and Means Committee this week. It's the first coordinated effort by congressional leadership to address digital asset taxation. The proposals would exempt mining and staking rewards from taxable income, create limited tax relief for gas fees, and offer safe-harbour protections for certain reporting failures.
- U.S. Senators Bernie Sanders (I-VT) and Elizabeth Warren (D-MA) urged the Department of Labor to reconsider its decision to withdraw guidance cautioning against cryptocurrency investments in 401(k) retirement plans. They argued that digital assets remain highly volatile and unsuitable for many retirement savers. The move highlights ongoing debate in Washington over the role of crypto assets in long-term investment products.
- The New York State Department of Financial Services has partnered with Europol to strengthen oversight of stablecoins and combat illicit financial activity involving digital assets. The agreement will enhance information sharing and cross-border cooperation between regulators and law enforcement agencies.
- Tether partnered with payment provider Oobit to launch a Visa card that offers rewards in tokenised gold. Users can earn cash back in Tether Gold (XAUT), a token backed by physical gold, while spending stablecoins and other digital assets. The initiative aims to expand real-world crypto utility by combining traditional payments infrastructure with tokenised assets and blockchain-based rewards.
- Mastercard has expanded its stablecoin settlement capabilities to include USDC and Ripple USD. The move allows merchants and financial institutions to settle transactions using a broader range of regulated digital dollars. Mastercard said the expansion reflects growing demand for blockchain-based payment infrastructure and aims to improve the efficiency of cross-border payments and digital asset transactions.
from Caleb & Brown Cryptocurrency Brokerage.
