Institutional Interest and Regulatory Shifts Shape Crypto Landscape in Q2

Summary:
In Q2, the digital assets market experienced mixed performance with cryptocurrencies lagging behind traditional assets, according to a report by Canaccord Genuity. Despite significant events like the Bitcoin halving and the SEC’s approval of spot ETFs, Bitcoin remained rangebound due to regulatory and macroeconomic challenges. However, institutional interest in crypto is maturing, with favorable supply-demand dynamics expected to benefit Bitcoin.
The SEC’s approval of Bitcoin and Ethereum spot ETFs is seen as a potential catalyst for price action, especially as retail investors might add crypto to tax-advantaged accounts. While BTC ETF inflows slowed from February highs, over 50% of major hedge funds are now engaging with spot BTC ETFs. Ethereum spot ETFs may start trading by July 8, potentially driving further interest in the broader digital assets ecosystem.
Digital assets have become a significant issue in the 2024 U.S. elections, with candidates advocating for the asset class. Although the SEC remains cautious about approving crypto IPOs, progress is being made on a stablecoin bill. Layer 2 solutions outperformed Ethereum Layer 1, with notable developments like Coinbase’s BASE and DeFi project EigenLayer.
Canaccord Genuity remains optimistic about the future of digital assets, citing the evolving regulatory landscape and growing institutional interest as potential positive factors.