In last week’s piece we discussed major developments impacting Ethereum price. This week, we’ll examine the bearish sentiment that has emerged in this morning’s market along with key events from the past week.
China’s Central Bank Announces Crypto Crackdown
Ethereum prices are lower today following bearish announcements from Chinese state financial institutions. The Chinese central bank reportedly called upon financial institutions to cease payment channels for crypto trading today,
“Speculative trading in virtual currencies roils economic and financial order, spawns the risks of criminal activities such as illegal asset transfers and money laundering, and endangers people’s wealth,” said the PBOC.
The Agricultural Bank of China, the country’s third-largest bank, posted a notice stating that all bank accounts connected to crypto trading will now be closed.
The post was live on Twitter for just 15 minutes before being deleted. However, the combination of the announcements has negatively impacted crypto prices, dragging both Bitcoin and Ethereum lower this morning.
The announcement comes just one day after China announced a serious crackdown on crypto mining. As one of the largest crypto markets in the world and the largest Bitcoin mining hub in the world by a significant margin, bearish regulatory news from China tends to have a serious and immediate impact on global sentiment.
While China has issued many warnings of bans and crackdowns in the past, this latest crackdown appears to be more organized and tangible than in the past, and comes on the heels of ongoing developments in China’s digital yuan program for which the government will want no competition from decentralized projects.
Goldman Sachs Offering ETH Options and Futures Trading
While the Chinese market recoils from crypto, institutional adoption in the U.S. continues to grow. Goldman Sachs made a major announcement last week that the bank would offer Ethereum derivatives trading to its users, opening a major inroad to crypto for both institutional and mainstream retail investors.
Mathew McDermot, head of the bank’s digital assets department, said the market could expect launch of ETH derivatives trading in the coming months.
It’s interesting to note that major banks and hedge funds are no longer fazed by the extreme volatility seen in crypto, such as the recent drop $60,000 to $33,000. Speaking to Bloomberg, McDermot stated that many GS clients view the crash as a positive event, providing “a slightly more palatable entry point” to the market.
Ethereum Network and Prices
Amid all the market noise, progress continues on Ethereum and related protocols. Futureswap V3 is launching on Arbitrum, providing lower gas fees and more competitive pricing for its users.
The Ethereum-based dydx decentralized exchange raised $65 million in a round led by Paradigm last week, the latest in a series of significant raises this week in crypto.
Crypto financial services firm Amber was recently valued at $1 billion in a $100 million fundraising round led by China Renaissance.
However, despite these wins for the network’s long-term viability, ETH prices are down today, last trading at $1,975, tanked by bearish sentiment from China. The drop below the psychologically significant barrier at $2,000 could lead to further bearish price momentum, as ETH will need to hit strong support and consolidate for some time before it can make a healthy and sustainable recovery.
The Global DeFi Summit will take place online on June 24. Featuring “market movers and industry definers,” 80 expert speakers are expected to speak to an audience of 5,000. Aave’s Stani Kulechov will host a talk along with representatives from CoinTelegraph, Circle, Dragonfly Capital, Saddle, NEAR Protocol, and many more. Discussion will focus on DeFi and NFTs.
The Women Spotlight: My Journey Into Blockchain Development conference will also take place online on June 24. Speakers include The Defiant founder Camilla Russo, Opyn co-founder Alexis Gauba, Algorand cryptographer Tal Rabin, and IOVlabs Blockchain Developer Advocate Solange Gueieros. Conversation will focus on blockchain development, particularly using the Solidity programming language, along with economics and smart contracts technology.
Finally, there are reports that the much-anticipated Bitcoin Miami Conference became a COVID-19 hotspot, with 12,000 people attending what is now being described as a super-spreader event.