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Core Scientific will supply an additional 70 MW of infrastructure to support CoreWeave's high-computing operations, following the exercise of an option within their 12-year, 200 MW contract. This expansion, funded by CoreWeave, involves modifying 100 MW of Core Scientific's infrastructure to accommodate NVIDIA GPUs for high-performance computing. Core Scientific expects this partnership to generate approximately $290 million in annual revenue and over $3.5 billion in total revenue over the contract's duration. The announcement led to a nearly 10% increase in Core Scientific's stock.
Solana Foundation Launches Tools to Enable Crypto Transactions on Any Website or App
The Solana Foundation is launching tools that enable any website, app, social media platform, or QR code to facilitate crypto transactions on the Solana blockchain. The "Actions" tool allows on-chain transactions across various digital platforms, while "blinks" transform these actions into shareable links for broader use. These innovations aim to simplify blockchain access and promote mainstream adoption. However, users are advised to remain cautious to avoid scams. Solana Foundation's partners will initially test these tools, expected to enhance digital interactions and boost Solana's network reliability.
EU Crypto Sector Braces for Disruption as MiCA Rules Targeting Stablecoins Take Effect Next Week
The upcoming Markets in Crypto Assets (MiCA) framework will impose stringent regulatory requirements on stablecoin activity in the European Union, potentially adversely affecting the bloc's cryptocurrency sector. Starting next week, EU stablecoin activity must comply with MiCA, leading to limited trading access, poor liquidity, and reduced access to exotic crypto investments for European citizens, according to Jasper De Maere of Outlier Ventures. The new regulations require stablecoins to obtain an "electronic money license" and fall under European Banking Authority supervision, with a maximum trading volume cap of 200 million euros. The lack of clear regulatory guidance has caused confusion among EU-based crypto participants, with major industry players expressing concerns over compliance. The full implementation of MiCA's regulatory framework will be required by December 2024.
Trading Desk Insights
Bitcoin made a significant rebound of nearly 7% from Monday's low of around $58,500 to a recent high of $62,500. This surge came after hitting oversold levels on the RSI, a scenario last seen in August 2023 when Bitcoin was trading at approximately $25,000. Encouragingly, both open interest and spot volume are on the rise.
Altcoins, however, have faced a more substantial liquidity drain compared to BTC and ETH. Their notional open interest has plummeted by 38% to a recent low of $11 billion since Bitcoin peaked at $72,000 on June 7th. In contrast, BTC and ETH futures have seen a more modest 13% decline in cumulative open interest, now standing at $29 billion.
In the US BTC ETF market, we finally observed a reversal of continuous outflows, with an inflow of $31 million, largely driven by Fidelity, which contributed $48.8 million.
CME's ETH open interest is nearing all-time highs, fueled in part by strong inflows into futures-based ETH ETFs, which currently make up 23% of CME's ETH open interest. Bitwise projects that spot ETFs could attract net inflows of $15 billion within the first 18 months.
This Friday, BTC options worth $6.68 billion and ETH options worth $3.5 billion are set to expire on Deribit. This expiration, representing over 40% of the current cumulative open interest of more than $23 billion, could trigger heightened market volatility due to increased trading volumes and the closing or rollover of positions.
In traditional markets, stock futures showed mixed signals on Wednesday morning after the S&P 500 rebounded from a tough start to the week. During Tuesday's regular trading session, both the S&P 500 and Nasdaq halted three days of losses, boosted by a rally in Nvidia shares.
Looking ahead, Wall Street's focus will shift to new inflation data with the release of May’s personal consumption expenditures price index on Friday. The Federal Reserve closely monitors this preferred inflation gauge, and investors are hopeful that a continued moderation in price increases might prompt the central bank to lower interest rates later this year
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This research is for informational use only. This is not investment advice. Other than disclosures relating to Secure Digital Markets this research is based on current public information that we consider reliable, but we do not represent it is accurate or complete, and it should not be relied on as such. The information, opinions, estimates, and forecasts contained herein are as of the date hereof and are subject to change without prior notification. We seek to update our research as appropriate.
Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation. The price of crypto assets may rise or fall because of changes in the broad market or changes in a company's financial condition, sometimes rapidly or unpredictably. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. Fluctuations in exchange rates could have adverse effects on the value or price of, or income derived from, certain investments. We and our affiliates, officers, directors, and employees, excluding equity and credit analysts, will from time to time have long or short positions in, act as principal in, and buy or sell, the securities or derivatives, if any, referred to in this research.
The information on which the analysis is based has been obtained from sources believed to be reliable such as, for example, the company’s financial statements filed with a regulator, company website, company white paper, pitchbook and any other sources. While Secure Digital Markets has obtained data, statistics, and information from sources it believes to be reliable, it does not perform an audit or seek independent verification of any of the data, statistics, and information it receives.
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Crypto and/or digital currencies involve substantial risk, are speculative in nature and may not perform as expected. Many digital currency platforms are not subject to regulatory supervision, unlike regulated exchanges. Some platforms may commingle customer assets in shared accounts and provide inadequate custody, which may affect whether or how investors can withdraw their currency and/or subject them to money laundering. Digital currencies may be vulnerable to hacks and cyber fraud as well as significant volatility and price swings.
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