Bitcoin and the broader cryptocurrency market experienced a second consecutive day of sell-offs on Thursday, as worries around inflation and potential interest rate hikes resurfaced. The concerns stemmed from the U.S. House of Representatives passing a debt ceiling deal on Wednesday night, which now moves to the Senate for approval. As a result, Bitcoin declined 1% to $26,800 and has seen a loss of over 6% in the past month.
Interestingly, new data from the eurozone indicated a more significant-than-anticipated drop in inflation to 6.1% in May, down from 7% in April. However, European Central Bank President Christine Lagarde suggested that further interest rate hikes are necessary in order to maintain inflation targets. Despite the ongoing slump in cryptocurrency markets, some exchanges appear to be thriving in these trying times.
One notable example is Kraken, which saw customer deposits in Canada surge by 25% in the weeks following Binance‘s planned withdrawal from the country in early May. Furthermore, Kraken experienced a fivefold increase in downloads of its two mobile apps specifically for Canadian clients within a week of OKX announcing its own departure in March. Both companies made these decisions in response to Canada’s tightened regulatory framework for digital asset trading, resulting in the exodus of numerous major players in the crypto exchange market—namely Binance, OKX, Paxos, Blockchain.com, and Deribit. The most recent exit announcement came from Bybit earlier this week.
Meanwhile, as the crypto market fluctuates, the bankruptcy claims exchange OPNX—co-founded by principals from the failed crypto hedge fund Three Arrows Capital (3AC)—issued a new governance coin called “Open Exchange token” (OX). This token is designed to reduce trading fees on the platform. In response, the value of the exchange’s original native token, FLEX, increased by 16% after it was revealed that FLEX could be converted for OX at a ratio of 1:100. OX is an ERC-20 token with a maximum supply of 9.86 billion. According to Etherscan, approximately 100 people have either minted or purchased the asset as of press time. It remains to be seen how this new token will impact the OPNX exchange, which was founded by 3AC’s Kyle Davies and Su Zhu, as well as executives from the failed crypto lender CoinFLEX.
Ultimately, the current market fluctuations and regulatory developments pose questions about the long-term future of the cryptocurrency market. Despite pockets of success, such as Kraken’s growth in Canada, the ongoing downturn and increased scrutiny from regulatory authorities have left many crypto enthusiasts wondering what lies ahead