Focus To Shift To Monetary Policy And Ethereum 2.0...

Crypto Outlook - June 2020...

Welcome to the June Crypto Outlook with Contentworks, an agency specialising in content marketing for financial services, crypto and blockchain.

Bitcoin was the best-performing “major” cryptocurrency in March as its price soared by more than 22%. It was followed by Ethereum, Ripple, and Litecoin, which rose by 9.8%, 1.70%, and 0.50% respectively. In total, the market capitalization of all cryptocurrencies tracked by CoinMarketCap rose from about $250 billion to more than $262 billion.

Bitcoin vs Ripple, Ethereum, and Litecoin

Bitcoin vs Ripple, Ethereum, and Litecoin

Halving was the biggest news of the month as the number of blocks awarded to Bitcoin miners was cut into half. The price rallied a few days before halving, boosted by positive sentiment from billionaire Paul Tudor Jones, who is famous for predicting the 2008/9 financial crisis. In a CNBC interview, he said that he had invested a substantial amount of money in BTC, mostly because of the current monetary policy by the Fed.

After halving, BTC has remained slightly below the psychological level of $10,000 partly because of indecision between bulls and bears.

Focus shifts to monetary policy

In June, the focus in the cryptocurrencies industry will be on monetary policy. As the coronavirus spread, central bankers started to print unlimited amounts of money to support the market. In the United States, the Fed is printing billions of dollars every week in form of its “open-ended quantitative easing” program.

The balance sheet, which was less than $9 trillion before the 2008/9 financial crisis, has ballooned to more than $7 trillion. And analysts expect the trend to continue like that in the next few months. The same trend is happening in Japan, Europe, United Kingdom, and even Australia.

At the same time, talk of negative interest rates is continuing in the market. In the UK, the BOE governor has not ruled out implementing these rates. In the United States, Jerome Powell has ruled out negative rates. But the futures market believes the bank will implement them in December.

This monetary policy is positive for Bitcoin and other cryptocurrencies. That’s because with yields so low, investors will likely allocate their money in risk assets like crypto. Therefore, in June, crypto enthusiasts will be focusing on central banks and how they navigate the pandemic.

ETH 2.0 to move Ethereum

After halving, the next big thing in the cryptocurrencies industry will be ETH 2.0 or Ethereum 2.0. This is a major update that will be rolled out in the ETH platform in phases. The first phase, christened as Phase 0, will happen in June or July while Phase 1 and Phase 2 will be launched in 2021 and 2022 respectively.

In the first phase, the so-called Beacon Chain will be implemented. It will be important for the platform because it will store and manage the registry validators and implement the important Proof of Stake mechanism. This will help improve the security and speed of transactions.

While the impact of ETH 2.0 will not be felt immediately, analysts expect the price of ETH to rally ahead of the upgrades.

Top Crypto Events In June

The number of physical events in the cryptocurrencies industry has fallen because of the virus. In their place, several event organisers have shifted their focus to virtual events. One of the biggest events will be Virtual Vision Finance, organised by Ultimate Fintech of iFXEXPO fame. The event will have several high-profile speakers including, Fan Xu, of Saxo Bank, Marc Levin of CFG Group, and Charlotte Day from Contentworks Agency. Other key events will be Blockdown and World Bitcoin Conclave.

Final Thoughts

Bitcoin price has found some resistance below the $10,000 level and its volatility as measured by the Average True Range and Bollinger Bands has been falling. This implies that a breakout, in either direction, will probably happen in June.

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