Market Wrap: Bitcoin Declines, Resisting Seasonal Norm; Altcoins Mixed

Don't miss CoinDesk's Consensus 2022, the must-attend crypto & blockchain festival experience of the year in Austin, TX this June 9-12.

Bitcoin (BTC) drifted lower on Wednesday, paring more than half its relief bounce over the past few days. The cryptocurrency reached a low of around $29,880 during the New York trading day.

Most alternative cryptocurrencies (altcoins) declined alongside BTC on Wednesday. For example, Solana's SOL token declined by 10% over the past 24 hours, compared with a 4% decline in BTC over the same period. GALA and ADA were down by 7% on Wednesday.

Stocks were also lower on Wednesday while gold and the 10-year Treasury yield ticked higher.

Just launched! Please sign up for our daily Market Wrap newsletter explaining what happens in crypto markets – and why.

Meanwhile, WAVES outperformed most cryptos with a 21% rally over the past 24 hours. “We have to work on the algorithm” after several depeggings from the dollar, Sasha Ivanov said on CoinDesk TV’s “First Mover” program on Wednesday.

Latest prices

●Bitcoin (BTC): $30,115, −4.76%

●Ether (ETH): $1,820, −5.83%

●S&P 500 daily close: 4,101, −0.75%

●Gold: $1,851 per troy ounce, +0.45%

●Ten-year Treasury yield daily close: 2.93%

Bitcoin, ether and gold prices are taken at approximately 4pm New York time. Bitcoin is the CoinDesk Bitcoin Price Index (XBX); Ether is the CoinDesk Ether Price Index (ETX); Gold is the COMEX spot price. Information about CoinDesk Indices can be found at coindesk.com/indices.

Losses add up

May was a tough month for both stocks and cryptos. It appears that macroeconomic uncertainty has kept some buyers on the sidelines, which benefitted gold and other commodities so far this year.

During the final week of May, bitcoin and stocks experienced a brief relief bounce, which paused the broader downtrend in prices. Trading conditions have been choppy this year, but the overall theme remains risk-off.

In the crypto market, bitcoin declined by less than other tokens in the CoinDesk 20 list last month. That suggests a lower appetite for risk among crypto traders. Typically, bitcoin declines by less than altcoins in a down market because of its lower risk profile.

MATIC, SHIB, SOL and AVAX declined by more than 40% last month and are down by more than 60% year to date.

Lower seasonal strength

On average, over the past nine years, bitcoin has produced a positive return in June. Over the following three months, however, the odds of a strong return diminish.

Bitcoin's negative return in May was outside of its seasonal norm, which means current market conditions are different compared with the past nine years. For example, rising interest rates, high inflation and geopolitical risks have weighed on all speculative assets this year.

Altcoin roundup

• Polygon props up KYC: Ethereum scaling system Polygon is increasing its know-your-customer (KYC) checks for potential investments and grants in India, a source told CoinDesk. Developers in India have recently been talking about the difficulty of acquiring funding or investment from Polygon. This comes amid the Indian government's increased scrutiny on digital assets and crypto firms. Read more here.

• Waves to tweak algo for its stablecoin: The algorithm powering the Waves protocol’s neutrino USD (USDN) stablecoin is in need of adjustments following two recent depeggings from the U.S. dollar, said founder Sasha Ivanov on CoinDesk TV. USDN has similarities in design to Terra’s UST, which collapsed in May. Waves (WAVES) token gained 21% in the last 24 hours. Read more here.

• Optimism airdrop came early: Ethereum scaling system Optimism’s hotly anticipated airdrop is expected to officially go live on Tuesday, but some users have already been able to claim OP tokens. The Optimism team was still in the process of testing the airdrop functionality. A team member said to CoinDesk that rogue centralized changes got out ahead of the official announcement. Read more here.

Relevant insight

• US Charges Ex-OpenSea Exec With NFT Insider Trading: Department of Justice officials say it's the first time they've pursued an "insider trading" charge in digital assets.

• Crypto Banking Rules Now Due This Year From Basel Committee: The group cited recent turmoil in pushing ahead with its plans, which previously saw opposition from major lenders including JPMorgan Chase.

• Crypto Exchanges Should Lose Licenses for Laundering Breaches, EU Regulators Say: The advice comes as legislators reach the closing stages of the landmark crypto MiCA law.

• Tech Experts Lobby Washington Criticizing Crypto, Blockchain: A letter from 26 technologists refers to crypto as risky, flawed and unproven.

• South Korean Government to Form Digital Assets Committee in Response to Terra Collapse: The committee will provide criteria for the listing of coins by exchanges, introduce investor protections and monitor unfair trading.

• Zcash’s NU5 Upgrade Goes Live, Boosting Privacy and Removing ‘Trusted Setups’: The privacy coin now allows transactions that are shielded by default, so users no longer have to opt in to hide payment details on the blockchain.

• Binance-Supported Deal for Forbes to Go Public Via SPAC Is Called Off: Binance had invested $200 million in Forbes earlier this year as part of the plan.

• DeFi Ledgers Can Help Regulators Oversee Sector, BIS Official Says: A new BIS working paper makes a case for "embedded supervision" that argues regulatory oversight can be built into seemingly untamable decentralized finance systems.

• Gary Vaynerchuk Files Trademark for ‘Vayner3’ NFT Consulting Arm: The firm could add to Vaynerchuk’s already influential presence in the NFT space.

Other markets

Most digital assets in the CoinDesk 20 ended the day lower.

Biggest Gainers

There are no gainers in CoinDesk 20 today.

Biggest Losers

Sector classifications are provided via the Digital Asset Classification Standard (DACS), developed by CoinDesk Indices to provide a reliable, comprehensive and standardized classification system for digital assets. The CoinDesk 20 is a ranking of the largest digital assets by volume on trusted exchanges.