The Daily: Ethereum’s critical inflection point, Strategy’s $110 million bitcoin buy, and more

The following article is adapted from The Block’s newsletter, The Daily, which comes out on weekday afternoons.

I hope you had a good weekend, folks. Bitcoin is back above the $105,000 level, but analysts warn the market remains on a "fragile" footing — with volatility likely to return mid-week as both U.S. CPI and PPI figures hit the calendar.

In today's newsletter, Bernstein says Ethereum is hitting a critical inflection point, Strategy buys another $110 million in bitcoin, Turnkey raises a $30 million Series B led by Bain Capital Crypto, and more.

Meanwhile, BlackRock's spot Bitcoin ETF becomes the fastest to hit $70 billion in AUM, crushing gold-based ETF GLD's previous record.

Let's get started.

Ethereum is hitting a critical inflection point

Analysts at research and brokerage firm Bernstein said Ethereum is reaching a critical inflection point as crypto pivots from speculation to blockchain-driven real-world financial innovation.

• While this crypto market cycle has been dominated by the narrative of institutionalization of Bitcoin, Bernstein said stablecoins and tokenization are driving forward other public blockchains such as Ethereum.
• "Bitcoin is great, we love it and still believe $200,000 is our high-conviction but conservative price forecast this cycle," the analysts led by Gautam Chhugani wrote in a Monday note to clients.
• "However, we believe, the mainstream interest is broadening beyond the 'store of value' Bitcoin use case toward the early stages of the financial innovation unleashed by the blockchain," they said.
• Ethereum's uniqueness is derived from its position as a decentralized computer, Chhugani explained, with stablecoin and tokenization use cases being native to the Ethereum blockchain, which enjoys a leading market share in these sectors.
• Major payment incumbents, such as Visa, Mastercard, and Stripe, are already developing their stablecoin strategies, while Robinhood and Kraken are pushing for real-world asset tokenization, Bernstein noted.
• The analysts argue that if companies and institutional investors are innovating on the blockchain, it makes those networks and their native assets, like ETH, valuable.
• "Not all crypto tokens are valuable, but foundational blockchain native assets such as Ethereum are now crossing the chasm from useless retail speculation to useful financial innovation."
• Meanwhile, Ethereum-based products led global crypto fund flows for the second consecutive week, although the pace continues to slow as investors await clarity from the Fed, according to CoinShares.

Strategy buys 1,045 BTC for $110 million

Strategy bought another 1,045 BTC for $110.2 million between June 2 and June 8, according to an 8-K filing with the SEC on Monday.

• The company funded the latest purchases solely using proceeds from sales of its STRK and STRF perpetual preferred stocks rather than its Class A common stock, MSTR.
• Strategy now holds a total of 582,000 BTC — worth over $62 billion — bought at an average price of $70,086 per bitcoin for a total cost of around $41 billion.
• That's the equivalent of roughly 2.8% of bitcoin's total 21 million supply and implies approximately $21 billion in paper gains. Meanwhile, The Blockchain Group unveiled a new $342 million share issuance plan to acquire more bitcoin.

Former Coinbase employees raise $30 million Series B for Turnkey

Turnkey, a crypto key management and wallet infrastructure startup co-founded by ex-Coinbase employees, has raised $30 million in a Series B funding round led by Bain Capital Crypto.

• Sequoia Capital, Lightspeed Faction, Galaxy Ventures, Wintermute Ventures, and Variant also participated in the round, bringing Turnkey's total funding to over $50 million.
• The startup claims to power more than 50 million embedded wallets and serves clients like Magic Eden, Alchemy, and Bridge across DeFi, payments, and AI tools and applications.
• Turnkey plans to use the fresh funding to scale its team and expand its modular infrastructure, with a focus on open-source contributions.

OpenSea rides OS2 wave to highest monthly users since 2023

NFT marketplace OpenSea hit its highest monthly user count since mid-2023 in May, fueled by the full launch of its upgraded OS2 platform.

• Despite the user surge, monthly trading volume remains far below its all-time highs, with May generating just $81 million compared to $5 billion in January 2022.
• OS2 now supports trading across 19 chains and features a new rewards system called Voyages that incentivizes onchain activity with XP.
• The hype surrounding those experience points and a potential airdrop for OpenSea's upcoming SEA token is also driving engagement, though a token launch date has yet to be announced.

Bitcoin network transaction activity reaches lowest level since 2023

Bitcoin network activity has reached its lowest level since October 2023, with seven-day average transactions dropping to around 317,000, despite BTC's price hovering near all-time highs.

• Some miners have begun accepting ultra-low fee transactions as demand for block space softens, with one 0.1 sat/vB transaction at a $0.01 fee recently processed after sitting in the mempool for a month — significantly below the typical relay floor of 1 sat/vB.
• Meanwhile, a group of 31 Bitcoin Core developers pushed back against filtering out low-fee or non-standard transactions, sparking debate over censorship resistance and decentralization within the Bitcoin community.

In the next 24 hours

• It's quiet on the economic calendar front.
• ECB President Christine Lagarde will speak at 11:15 p.m. on Tuesday.
• EigenLayer is set for a token unlock.

Never miss a beat with The Block's daily digest of the most influential events happening across the digital asset ecosystem.

Disclaimer: This article was produced with the assistance of OpenAI’s ChatGPT 3.5/4 and reviewed and edited by our editorial team.

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