Good morning. Here’s what’s happening:

Prices: Amid Bitcoin debates and concerns about halving, bitcoin and Ethereum start flat in East Asia. Cobo data indicates a recovery of market confidence, and Bybit links the memecoin surge with reinvestment and warns mining impacts if Bitcoin does not stabilize above $30,000 after halving.

Insights Bitcoin’s reduced congestion affected altcoin rallies, and BRC-20’s demand led to higher fees and increased miner revenue even without any new users. This could change bitcoin’s relationship with Ether and its market dynamics.

Crypto-Next Storylines

Good morning Asia

Bitcoin and Ether are both flat to start the East Asia trading session, with bitcoin down 0.6% at $27,037 and ether up by 0.4% at $1,824.

Cobo’s Asset Under Custody data, which is a custodian for institutions, shows that the cryptocurrency market confidence hit its lowest level in February 2022. This was followed by a rapid recovery in March. Cobo’s AUC is already back at the level of November 2022. This indicates that funds are returning into the market. The firm shared this information with CoinDesk.

In a CoinDesk note, Charmyn Ho said that the recent surge in memecoins coincided with a drop in interest in crypto, as measured by Twitter and YouTube Analytics. This suggests that investors are reinvesting profits from the strong performance of crypto year-to date.

Ho wrote that the ranges could still offer room for further depreciation, and that they represent attractive accumulation zones to long-term holders.

The bitcoin story is still dominated by macroeconomics. There’s a debate about whether bitcoin is a hedge or a store value. This will not be resolved any time soon.

Next, there is the halving. This is expected to happen sometime around early 2024. But Cobo CEO Mao Shixing disagrees.

In a note, he said that “from an economic perspective, the halving of bitcoin does not currently play a significant part, but it’s a good story logic.”

He noted that one thing to consider is what impact this might have on the miners.

The S19 is still the most popular choice among miners. He told CoinDesk that if the price does not stabilize at $30,000 after the next halving scheduled for next summer, then these machines will have to stop operating.

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Biggest Losers

Bitcoin’s Unconfirmed Transactions Pile is Reducing, but It’s Still Record Highs

Binance’s temporary disabling withdrawals two times last week due to congestion on the Bitcoin Blockchain has now eased. The number of non-confirmed transaction is down to 260,000 compared to a high of over 450,000 last week.

The rally of bitcoin knockoffs bitcoin cash (BCH) and bitcoin SV has been dampened by this easing. Last week, both rallied as investors poured money into alternative currencies due to the congestion of Bitcoin. Bitcoin maintains its 1MB block size. Bitcoin Cash and Bitcoin SV, on the other hand, have increased their block sizes from 1 MB to 32 MB. These two protocols have significantly lower transaction costs than Bitcoin.

We can now look at the final total of fees paid during Bitcoin’s Ordinals rally . This was noted by Glassnode. The figures are staggering.

This surge in block demand due to BRC-20 tokens led to high fees. The average fee per block exceeded the Block Subsidy only for the fifth time in Bitcoin history. Glassnode writes that this has resulted to a total of $17.8M in daily fees, a record high. This also brought an extra $100M for the miners.

This has led to a record-breaking number of transactions, reaching a new high of 682 000, which represents a 39% increase from the peak of 2017.

Does this bring in new users or not? Not really. The number of addresses has decreased despite the increase in transactions, which indicates that BRC-20 users are reusing their Bitcoin addresses.

Many people are wondering if the introduction of BRC-20 tokens and non-volatile tokens (NFTs) on Bitcoin will change the relationship between Bitcoin and ether.

CoinDesk reported that the 30-day rolling coefficient between bitcoin and the ether price has fallen to 77%. This is the lowest correlation since 2021. It indicates a possible decoupling on a long-term basis of the two biggest cryptocurrencies.

This weakening of the correlation could increase trading activity on major exchanges in bitcoin-ether pair, giving traders new opportunities to capture the relative values between the two without using the dollar.

Is this a mere inconvenience or a real change for Bitcoin?

Important events.

CoinDesk TV

If you haven’t seen it yet, here is the latest episode of CoinDesk TV .

The European Union’s finance ministers signed off on landmark new crypto rules on Tuesday. Laura Douglas, Clifford Chance LLP’s senior associate, joined “First Mover,” to discuss its significance. Separately the crypto markets were quiet as both bitcoin (BTC), and ether prices (ETH) traded below their 20-day average. 3IQ CEO Fred Pye discussed his outlook on the crypto markets. LandVault CEO Samuel Huber also discussed the partnerships that are forming in the metaverse during crypto winter.

Bitcoin’s Realized Price is on the Cusp Of Flashing A Major Bullish Sign : Bitcoin’s realized price appears to be on the cusp of flashing a major bullish signal . This indicates a long-lasting bullish period.

Bitcoin and Ethereum Correlation is Weakest since 2021, Indicating a Regime Change on Crypto Market : Since Ethereum switched from PoW to PoS the economics behind supply and demand will continue to diverge.

More than a Million Wallets Hold Bitcoin The major increase in wallets was after the collapse of FTX, a crypto exchange between November and January.

Peter Thiel backs Bitcoin startup River in $35M round : Kingsway Capital led the Series B funding of the Bitcoin financial service provider.

Optimism Scaling Solution for Ethereum Sets June Date For Biggest Upgrade Ever, ‘Bedrock The upgrade is a hard fork that was proposed earlier this summer and approved by the Optimism Community in April. It’s supposed to bring a new level of modularity and simplicity, and Ethereum equivalence.