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Crypto Market Shifts: USDC Surges, Bitcoin ETFs Decline in Q2 2024

USDC's trading volume soared after MiCA compliance. Bitcoin ETF inflows dropped, and BCH faced selling pressure as Mt. Gox repayments began.

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Crypto Market Shifts: USDC Surges, Bitcoin ETFs Decline in Q2 2024

The cryptocurrency market witnessed significant shifts in the second quarter of 2024, with notable changes in stablecoin trading volumes, Bitcoin stock market inflows, and regulatory compliance. TON's open interest reached a record high, indicating strong capital inflows, while USDC saw a surge in daily trading volume following Circle's MiCA compliance announcement.

TON's open interest peaked at $287 million in early July, reflecting robust capital inflows into the stock market today. Meanwhile, USDC experienced the strongest increase in daily trading volume, surpassing other stablecoins like SocGen's Forge. This growth can be attributed to Circle's announcement of compliance with the Markets in Crypto-Assets (MiCA) regulation, which boosted USDC's credibility and usage.

Spot BTC stock market inflows, however, declined significantly in the second quarter of 2024. Most ETFs faced outflows for the first time, indicating a shift in investor sentiment towards Bitcoin. Despite this, USDC's weekly trading volume surged to $23 billion in 2024, more than double the volume seen in 2023 and triple that of 2022.

Bitcoin Cash (BCH) faced strong selling pressure as Mt. Gox began repayments to creditors. This led to increased price slippage on several exchanges, highlighting the impact of large-scale redemption events on cryptocurrency markets. In response to regulatory pressures, major crypto exchanges such as Binance, Bitstamp, Kraken, and OKX have implemented restrictions and delisted non-compliant stablecoins for their European customers.

USDC's market share on centralized exchanges (CEXs) rose significantly after Binance re-listed it in March 2023. Its share increased from an average of 60% to more than 90% across all exchanges, solidifying its position as the dominant stablecoin. The share of BTC perpetuals denominated in USDC also rose to 3.6% from 0.3% in January, and for ETH-USDC trade volume, it rose to over 6.8% from 1%, indicating growing acceptance and usage of USDC in the crypto derivatives market.

TON reached a new record high above $8.20 in mid-June, driven by use cases related to the popular social messaging app Telegram and its success with its 1 billion users. However, Bitcoin's realized volatility fell in the second quarter of 2024 but has since climbed to around 42%, suggesting increased price fluctuations in the bitcoin price market.

The cryptocurrency market in the second quarter of 2024 was marked by significant shifts in stablecoin trading volumes, regulatory compliance, and investor sentiment towards Bitcoin. While USDC experienced strong growth and TON reached record highs, Bitcoin stock market inflows declined, and BCH faced selling pressure. As regulatory pressures mount, major exchanges have taken steps to ensure compliance, shaping the future of the cryptocurrency landscape.

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