Ether (ETH) at an important crossroads
In the past, gains in ether (ETH) often preceded a broader rally across altcoins, though whether that pattern still holds true is unclear. An answer may emerge in the coming months, if ether manages to break out of its downward trend. In this edition of Market News, we take a closer look at that and also take you on a brief tour of Asia, where crypto is both embraced and feared.
Market update
Ether, the native token of the Ethereum network, has arrived at a critical juncture. Several technical indicators converge around €1,600: the descending trend line from the peak, the area that provided support in February but now acts as resistance, and the 50 to 70-day moving averages.
This is, in principle, a "bearish setup," where a continuation of the downtrend is most likely. That is exactly why it would be significant if ether broke out upwards despite this, offering an early sign that the downtrend may be over. Confirmation would come from a higher high above the €2,060 of late April, followed by a higher low above the €1,310 of June 6.
In the past, ether has often led the way in the altcoin market, with strength in the largest altcoin typically signaling increasing risk appetite. There are good reasons to expect that correlation among tokens in the altcoin market is decreasing, with prices increasingly driven by the revenue streams of individual projects. Still, this correlation hasn't entirely disappeared: an ether breakout could well be the starting signal for a broader rally.
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Asia: From stablecoin hype to complete ban
Anyone taking a crypto tour through Asia this week will quickly notice how differently countries are approaching the same technology. Where one country is developing exchange-traded products and payment networks, another is applying the policy brakes. Crypto has become a test: how much room do you give innovation without losing control over cash flows and taxation?
In Japan, the focus on normalization is particularly prominent. Finance Minister Satsuki Katayama promised last week that the country would continue discussions on the introduction of exchange-traded funds with crypto as an underlying asset. This would allow investors to gain exposure to Bitcoin and other cryptocurrencies through the stock market, without having to hold assets themselves. It is a characteristically Japanese approach: cautious, highly regulated, but still progressive.
South Korea, meanwhile, is stepping up efforts on stablecoins. Korean policymakers have seen that stablecoins have been received with great enthusiasm by neighboring Japan. The central bank is therefore pushing to quickly establish a legal framework for won-denominated stablecoins, with banks expected to play a major role. Policymakers see opportunities for payments but also have concerns about monetary policy and supervision. The message is: innovation is welcome, but must remain within the existing financial system.
Kazakhstan is taking a more explicit growth focused approach. President Kassym-Jomart Tokayev has signed a decree to accelerate the development of the crypto market. The country plans to shift trading to licensed platforms, introduce tax incentives, and use energy from its gas and oil resources to support bitcoin mining. Crypto is also appearing more frequently in daily payment transactions, with banks working alongside exchanges to enable payments using USDT.
However, the tour also takes you through regions with a tougher stance. In Malaysia, over 75,000 mining rigs have been seized since 2022. This followed around three thousand police raids, resulting in more than six hundred arrests. The crackdown has targeted illegal mining operations, which have caused widespread problems by stealing electricity and tampering with power meters. Trading in cryptocurrencies remains legal in Malaysia, however.
And then there is India. Cryptocurrencies have been a gray area there since 2018. At that time, courts struck down the central bank's proposal for an outright ban, ruling that such a decision rests with lawmakers. A draft bill circulated in 2021 was never formally considered. Since then, the central bank has remained the main dissenting voice, continuing to insist on a tougher approach. Last week, it reiterated its concerns about tax evasion, foreign exchanges, anonymous wallets, and methods used to circumvent capital controls.
As this tour of Asia shows, the region is simultaneously experimenting with, reining in, accelerating, and restricting crypto. Japan approaches it through the lens of capital markets, South Korea through banking, Kazakhstan as a growth opportunity, Malaysia as a power grid enforcer, and India as a regulator unwilling to lose control over financial flows. The technology may be the same everywhere, but each country projects its own concerns and ambitions onto it.
In other news
BNB Chain building a new network for AI agent trading. The new blockchain is expected to go live by early 2027, with transactions confirmed within 50 milliseconds. The goal is to offer a trading experience closer to that of a centralized exchange, without users having to entrust their assets to an intermediary. The technical design focuses on agentic trading and includes features to prevent unfair gains from transaction ordering (MEV). This comes at the expense of transparency however, as the design does not include a public mempool.
Chainlink gains ground as a secure bridge between blockchain networks. Since May, projects with a combined total of over $7.2 billion in assets have migrated to Chainlink, including Kelp, Lombard, Solv, and now Mantle. The shift follows a security vulnerability at rival LayerZero, which caused hundreds of millions of dollars in damage earlier this year. Since then, projects have taken a much closer look at the infrastructure used to move their tokens. In recent years, these so called ‘bridges’ have often proven to be the weakest link.
Circle the first stablecoin issuer authorized to establish a national trust bank. On Friday, the company received the green light from regulator OCC. The new entity is called Circle National Trust and is authorized to provide digital asset custody services. In time, it may also manage USDC's reserves under federal supervision. This will make the infrastructure supporting USDC less reliant on individual banking partners. For Circle, the move is also a boost for its reputation: no other stablecoin issuer has managed to embed itself so deeply in the American financial system.
Bitcoin 'may' find its way into Trump Accounts. On July 4, doors opened in the US to a new type of investment account for children: Trump Accounts. Parents who open an account for their child receive a $1,000 contribution from the government, while Dell founder Michael Dell has pledged an additional $250 in seed funding. The account balance is automatically invested, initially in a fund that tracks the S&P 500. Could Bitcoin be added too? “Something could happen,” Trump said during the accompanying press conference.
Satoshi Radio: In the latest episode of Satoshi Radio, Polymarket takes center stage. Traders sued the company over a disputed outcome. The platform also turns out to be fueling price manipulation in the bitcoin market. In addition, there's a look at 'spam' on the bitcoin network, and the polarizing question of whether and how it should be filtered. The episode also covers Strategy, which is selling bitcoins for the first time to pay out dividends. As always, the episode concludes with the market update.
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