Market Momentum in May

The cryptocurrency market experienced a significant upward trend in May, closing the month with an 8.6% increase in total market capitalization. This surge was largely driven by favorable regulatory actions, according to Binance Research. Key developments included the U.S. Securities and Exchange Commission (SEC) approving eight spot Ethereum (ETH) exchange-traded funds (ETFs) and the U.S. House of Representatives passing the Financial Innovation and Technology for the 21st Century (FIT21) Act. ETH’s price surged by 21.2% in a single day leading up to the ETF approvals, which spurred a broader market resurgence.

Impact on Ethereum and Bitcoin ETFs

Following the approval of spot ETH ETFs, Grayscale’s Ethereum Trust (ETHE) saw a continued narrowing of its discount to net asset value, which now stands at 1.4%, its lowest in nearly three years. The market will be closely monitoring the flows from ETHE and the newly approved spot ETH ETFs to gauge their impact on the broader market.

Bitcoin (BTC) also benefited from these regulatory developments, with spot BTC ETFs witnessing 14 consecutive days of net inflows in May, contributing to the overall positive market performance.

Solana Network Developments

In another significant development, Solana stakers passed a proposal to distribute 100% of priority fees to network validators, moving away from the previous model where 50% of the fees were burned. Additionally, Solana’s daily network transaction fees came closer than ever before to those generated by Ethereum, while the Phantom wallet climbed to third place in the utility category on the Apple app store.

Growth in Tokenized Treasuries

Tokenized U.S. treasuries reached a new high in May, recording around $1.5 billion in value on-chain, marking an 80% growth year-to-date (YTD). BlackRock’s USD Institutional Digital Liquidity Fund has been a key driver of this growth and is now the largest fund in the space.

Resurgence of Prediction Markets

Prediction markets have also seen a resurgence this year, with total value locked (TVL) increasing by 68.6% since January. May saw net deposits exceed $60 million for the first time, driven in part by the upcoming U.S. presidential election. Platforms like Polymarket have benefited significantly from this heightened activity, and further growth is expected as the election approaches.

For further details, the full report can be accessed on the Binance Research website.

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