Monthly Review of June 2024

In this monthly review, we look at the most important cryptocurrency-related news in June. The most significant cryptocurrency news in June was related to Bitcoin mining news from Finland and Germany, the SEC's decision to end the Ethereum investigation, reports on Bitcoin and Ethereum, Mt. Gox's announcement to start customer fund repayments in July, and continued Bitcoin purchases by companies.

              
June in the Cryptocurrency Markets
June was a negative month in terms of cryptocurrency price movements. Of the cryptocurrencies offered by Northcrypto, Bitcoin and Aave had the smallest declines, with prices falling less than eight percent. Ethereum and Litecoin prices dropped slightly below ten percent, while Solana saw about a 12 percent decline. Polygon and ApeCoin prices dropped around 20 percent, while Chainlink and Dogecoin prices ended the month about 22–24 percent lower than at the beginning of the month.

Bitcoin Mining News from Finland and Germany
One of the world's largest Bitcoin mining companies, American Marathon Digital Holdings (Marathon), announced in late June the implementation of a Bitcoin mining pilot project in Finland. Marathon's two-megawatt Bitcoin mining center is located in Satakunta, and the heat generated as a byproduct of mining is used for district heating in a nearby town of 11,000 residents. According to Marathon, this innovative approach can, among other things, reduce costs and lessen the need for heat sources that produce carbon dioxide emissions.

In June, it was also revealed that German telecommunications giant Deutsche Telekom, one of the largest companies in the field, plans to start Bitcoin mining in the future. This was disclosed at the BTC Prague conference. In addition to mining plans, it was revealed that the German company has been operating nodes supporting the Bitcoin network and the Bitcoin scalability solution Lightning Network since last year.

SEC Ends Ethereum Investigation
The U.S. Securities and Exchange Commission (SEC) enforcement division announced in June that it would end its investigation into Ethereum. This was revealed when the well-known Web3 developer company Consensys reported that it had asked the SEC in May whether the agency would end the Ethereum investigation following the approval of Ethereum spot ETFs in the United States. Ending the investigation means that Ethereum will not be classified as a security in the U.S., which has previously been a concern for some.

Reports on Bitcoin and Ethereum
The world's largest bank by managed assets, The Industrial and Commercial Bank of China (ICBC), commented on Bitcoin and Ethereum in a report published in early June. The Chinese bank referred to Bitcoin as digital gold, stating that Bitcoin has a similar scarcity to gold and simultaneously solves issues related to gold, such as challenges in divisibility, authenticity verification, and transferability.

ICBC used a relatively new analogy for Ethereum, calling it digital oil, emphasizing Ethereum's central role in the digital world. According to ICBC, Ethereum has continually improved its technology in terms of security, sustainability, and scalability, which bodes well for the digital future

In addition to ICBC, American asset manager VanEck also published a report on Ethereum. In the report released in June, VanEck set a new target price for Ethereum. VanEck stated that Ethereum price could rise to $22,000 by 2030 due to institutional demand driven by the approval of Ethereum spot ETFs in the United States. Additionally, solutions based on Ethereum can offer lower costs, higher efficiency, and better transparency, according to VanEck.

Mt. Gox to Start Customer Fund Repayments
Bitcoin and other cryptocurrency market prices were down at the end of the month when news broke that the Mt. Gox cryptocurrency exchange, hacked in 2014, would begin repaying funds to customers starting in July. The exact amount of bitcoins to be repaid to customers is still unknown, but the number is likely between 65,000 and 140,000 bitcoins, with about 127,000 customers receiving funds. Mt. Gox was the largest exchange during Bitcoin's early days, handling over 70 percent of all bitcoin trading at its peak.

Companies Continue Buying Bitcoin
American company MicroStrategy, which offers business intelligence solutions, cloud-based services, and mobile software, announced a bitcoin purchase in late June. MicroStrategy used nearly 750 million euros raised through convertible notes to buy almost 12,000 bitcoins. As a result, the company's bitcoin holdings rose to over 226,300 bitcoins, valued at approximately 13 billion euros at the end of the month.

In addition to MicroStrategy, Japanese company Metaplanet also plans to continue increasing its bitcoin holdings. Metaplanet, which started buying bitcoin in April, announced in June the issuance of bonds worth nearly 6 million euros. The proceeds from these bonds will be used to grow the company's bitcoin holdings. Before the bond issuance, Metaplanet's bitcoin holdings were around 140 bitcoins, valued at just over 8 million euros at the end of the month.

Summary
In June, positive mining news related to Finland emerged when one of the world's largest mining companies, Marathon, announced the implementation of a pilot project. Countries with cooler climates, like Finland, are attractive for several reasons. They offer relatively cheap clean energy, a cool climate helps in cooling the equipment, and there is relatively high demand for the heat generated as a byproduct, for example, in heating homes. German telecommunications giant Deutsche Telekom is set to enter the Bitcoin mining business in the near future. Increased competition is naturally a positive thing for Bitcoin.

The SEC's decision to end the Ethereum investigation was expected and positive. The decision, along with the Ethereum spot ETFs approved by the SEC at the end of May, enhances Ethereum's legitimacy as an investment, lowering the barrier for institutional investors to invest in the largest smart contract platform on the market.

The positive comments from the world's largest bank about Bitcoin and Ethereum, as well as VanEck's target price of over $20,000 for Ethereum, continue the trend of large banks and asset managers increasingly recognizing the strengths of the two largest cryptocurrencies. This trend is likely to continue in the future, and it will be interesting to see when similar comments are heard from a comparable Finnish entity.

Mt. Gox's plan to start repaying customer funds in July is news that customers who lost funds have been waiting for several years. Assessing the potential selling pressure caused by the bitcoins repaid to customers is challenging in advance. Just the news caused a noticeable drop in Bitcoin price, so the market's reaction to the start of repayments will be interesting to watch.

MicroStrategy continued to adhere to its Bitcoin strategy by using inexpensive financing available from the market to grow its bitcoin holdings. If Bitcoin price continues its historical upward trend in the coming years, MicroStrategy's strategy may prove to be one of the most ingenious ways to increase the company's value. Japanese company Metaplanet has also started regular bitcoin purchases, following in MicroStrategy's footsteps. Although the purchases are relatively small compared to MicroStrategy's, Metaplanet's actions may serve as an example for other Japanese and Asian companies.


Ville Viitaharju
Cryptocurrency specialist