US Economy Strong, Bank's $500K BTC Prediction, & ETH's Comeback

Hi Reader,

Thanks for reading The BlockByte Weekly, where we summarise the key updates in crypto over the last week and provide our perspective on what you need to know as an investor.​
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Weekly Snapshot

• BTC: $108,182 (~A$165,138) (+2.3%)
• Crypto Market Cap: $3.29T (+2.5%)
• Gold: $3,333/oz (+2.0%)
• S&P 500: 6,279 (+2.%)
• ASX 200: 8,603 (+0.9%)
• 10-Year Treasury Yield: 4.3% (+2.4%)

Executive Summary

This week, the overall digital asset market rose by 2.5% on the back of strong US jobs growth and a decline in inflation from 4.2% to 4.1%. Whilst Trump pushes for interest rate cuts which typically boost the economy, we believe that asset prices are going to continue to be driven by government spending and rising deficits which are highlighted by macroanalyst Lyn Alden. Despite the rising debts weakening the US dollar, we believe these conditions are positive for growth in digital asset prices moving forward.

This week also saw continued inflows into the digital asset ecosystem, we take a look back and see that over the last year, assets under management for Bitcoin ETFs has grown from US $50 billion to over $145 billion. In addition, major institutional adoption shows that over 140 publicly listed companies now hold Bitcoin on their balance sheet, worth in excess of US $91 billion.

Lastly, Ethereum and Solana may be signalling a reversal in altcoin fortunes. The two major tokens have been major underpformers so far this year, with both tokens roughly 50% below their all-time highs. A potentially positive catalyst for Solana was the launch of the first staking enabled Solana ETF this week which attracted $33 million in trading volume in its first day. For Ethereum, a new company BitMine launched an Ethereum treasury company, starting with US $250 million of Ethereum on its balance sheet.

Whilst we don't expect a surge of Ethereum treasury companies, we do think Ethereum could be poised for a strong second half of the year, driven by growing stablecoin and de-fi activity, most of which takes place on the Ethereum network.

Key Stories This Week

U.S Economy Still Strong & What Underpins Our Bullish Outlook

Before we jump into the data, it's worth noting why we focus on the US economy rather than Australia, given most of our client base is Australia-based.

The US economy has a GDP (value of of all goods and services minus costs to produce) of roughly US $28.8 trillion. Australia's GDP is ~ US $1.9 trillion annually. At roughly 15 times larger, the US has a significantly outsized impact on global asset prices.

Over the last week, the overall cryptocurrency market rose by 2.5% on the back of stronger than expected U.S. non-farm jobs growth for June of 147,000, surpassing forecasts of 110,000.

'Non-farm' jobs exclude jobs in agriculture, government jobs, private household work (e.g., nannies) and NGOs because they are often seasonal, not aligned with economic drivers (governments can spend in any economic conditions and NGOs rely on donations rather than revenues).

Additionally, the unemployment rate fell to 4.1% whilst inflation has remained steady at 2.4% signalling a robust US economy, positive for asset prices across digital assets and stocks.

US Unemployment Fell To 4.1% In June

Trump is continuing to push for interest rate cuts from the Federal Reserve which would lower the borrowing costs for domestic businesses and typically create an economic boost. However, it's our belief that interest rates are less of a factor for asset prices in the current economy.

As Lyn Alden brilliantly explains in her video below, we're in a period of 'fiscal dominance'. This is where government spending and debt have an outsized impact on inflation in an economy compared to central banks' interest rate policy.

For those that haven't yet watched it and want to learn more about what's driving asset prices, we think this is one of the best videos so far this year. It underpins our long-term bullish thesis for bitcoin and digital assets:

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​Major Bank Predicts US $200,000 Bitcoin in 2025, then US $500,000 in 2028

This week, Standard Chartered Head of Digital Asset Research, Geoff Kendrick, said their official year-end price target for Bitcoin is US $200,000, citing strong institutional and government demand along with positive political and regulatory developments.

“My official forecasts for Bitcoin are $120,000 end Q2, $200,000 end 2025 and $500,000 end 2028".

Inflows into Bitcoin ETFs as well as corporate adoption have been nothing short of stunning so far this year. Assets under management for the major funds have risen from US $50 billion to over US $145 billion in the last 12 months alone.

In addition, institutions like Strategy and MetaPlanet have continued enormous Bitcoin buying sprees. 141 publicly listed companies now own 849,570 Bitcoin on their balance sheets, worth US $91.9 billion.

We don't see this trend reversing any time in the short-term as companies look to bolster their balance sheets and protect their long-term capital in light of ongoing currency debasement, rising debts and falling US dollar strength.

Will Solana & Ethereum Turnaround A Lacklustre 2025?

Perhaps the biggest disappointment so far this year has been the underperformance of many non-BTC cryptocurrencies. Tokens such as Ethereum and Solana find themselves nearly 50% below their prior all-time highs.

This week, we saw the launch of Solana's first ETF with staking enabled, giving investors the opportunity to also earn a yield. The Rex-Osprey ETF (SSK) saw US $33 million in trading volume on its first day, and US $12 million in total inflows. Whilst this places the ETF in the top 1% of successful ETF launches, compared to BlackRock's Bitcoin ETF launch (IBIT) which did over US $1 billion in the first 24 hours, with over $400 million in inflows.

Ethereum also had some major announcements across the week, with Bitmine Immersion’s shares skyrocketing over 3,000% after raising US $250 million to acquire ether (ETH), positioning itself as copycat to some of the Bitcoin treasury companies.

After declining in value for the last 3 years against Bitcoin, Ethereum may be starting to make a comeback, in the last 3 months it has outperformed Bitcoin (+26.7%), rising by 52.6% comparatively. We'll be keeping a close eye on the markets to see if more companies begin adopting an Ethereum treasury strategy.

Whilst we don't think many companies will adopt Ethereum for their treasuries, we do think that Eth the token will do well in the second half of this year, driven by a growing ecosystem of stablecoins and de-fi activity, which is still largely built on top of the Ethereum network.

Until next week,
James

James Brannan
Managing Director
BlockByte
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(+61) 412 393 634
​james@blockbyte.com.au​
​https://blockbyte.com.au/​

BlockByte does not provide financial advice. We provide a personalised brokerage service with tailored support, research and secure custody for investing in digital assets. Reach out to our team to discuss how we can help.

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