Good Morning, Asia. Here’s what’s making news in the markets:

Welcome to Asia Morning Briefing, a daily summary of top stories during U.S. hours and an overview of market moves and analysis. For a detailed overview of U.S. markets, see CoinDesk’s Crypto Daybook Americas.

As Asia opens the trading week,

is changing hands at around $ 105,000, stuck in this range due to market uncertainty about whether the Israel-Iran conflict will escalate into a broader regional war, according to a recent note from trading firm QCP.

QCP wrote in a Friday note published on Telegram that risk reversals have “flipped decisively,” with front-end BTC puts now commanding premiums of up to 5 volatility points over equivalent calls, a clear indicator of heightened investor anxiety and increased hedging against downside risks.

The firm said that despite this defensive shift in positioning, BTC has demonstrated notable resilience. Even amid recent volatility, which saw over $1 billion in long positions liquidated across major crypto assets, on-chain data shows that institutional buying continues to provide meaningful support.

QCP emphasizes that markets remain “stuck in a bind,” awaiting clarity on geopolitical outcomes, and warns that the digital asset complex will likely remain tightly linked to headline-driven sentiment shifts for the foreseeable future.

With all that in mind, however, Glassnode data provides some reassurance to investors concerned about longer-term directionality.

Although recent volatility underscores short-term anxiety, bitcoin’s current cycle gain of 656%, while lower than previous bull markets, is notably impressive given its significantly larger market capitalization today.

Previous cycles returned 1076% (2015–2018) and 1007% (2018–2022), suggesting investor demand is still pacing closely with BTC’s maturation, even as near-term macro jitters dominate market sentiment.

Galaxy Research Says OP_Return Debate Wasn’t That Important

The OP_Return debate was less important than what a “loud but small group of critics” wanted everyone to think, Galaxy Research’s Alex Thorn wrote in a recent note.

Thorn described critics’ reactions as “wild accusations of the ‘death of Bitcoin'” and argued that such hyperbole was misplaced given historically low mempool congestion.

On-chain data shows that the mempool is virtually empty compared to a year ago, and the notion that a congested blockchain is suffocating BTC, as was the prevailing narrative in 2023, now appears significantly overstated.

In the note, Thorn further highlighted the irony of labeling arbitrary data as “spam,” reminding observers that Bitcoin’s creator, Satoshi Nakamoto, famously included arbitrary text, the “chancellor on brink of second bailout” headline, in the Bitcoin’s blockchain’s very first block.

Instead, Thorn argued, Bitcoin’s community attention would be better focused on potential upgrades like CheckTemplateVerify (CTV), a proposed opcode enabling strict spending conditions (“covenants”).

“We continue to believe [CTV] is a conservative but powerful opcode that would greatly enhance the ability to build better, safer methods of custody,” he wrote, noting that around 20% of Bitcoin’s hashrate already signaled support for the upgrade.

Bitcoin upgrades require extensive consensus-building, reflecting its open-source ethos, and Thorn emphasized that cautious, deliberate evolution remains critical for broader adoption and scalability.

ByBit Launches Byreal, a Solana-Native Decentralized Exchange

Bybit is entering the decentralized exchange space with Byreal, an on-chain trading platform built on Solana, Ben Zhou, Bybit’s CEO announced via X over the weekend.

Byreal’s testnet is scheduled to launch on June 30, with the mainnet rollout expected later this year. Zhou said that Byreal is designed to combine centralized exchange features such as high liquidity and fast execution with the transparency and composability of DeFi. The platform will also include a fair launchpad system and curated yield vaults linked to Solana-native assets like bbSOL.

Market Movements:

• BTC: Bitcoin held near $105,000 after more than $1 billion in leveraged positions were liquidated, led by a $200 million long on Binance, as rising Israel-Iran tensions triggered a sharp selloff, a flight from altcoins, and a brief but intense bout of volatility.
• ETH: Ethereum rose 2% to around $2,550 after finding strong support at $2,510, showing resilience amid Israel-Iran tensions and broader market volatility, with continued institutional inflows supporting the uptrend.
• Nikkei 225: Asia-Pacific markets rose Monday, led by Japan’s Nikkei 225 gaining 0.87 percent, as investors weighed escalating Israel-Iran tensions, while oil and gold prices surged on safe haven demand.
• Gold: Gold climbed to $3,447 in early Asian trading Monday, hitting a one-month high as Middle East tensions and rising expectations of a September Fed rate cut outweighed strong U.S. consumer sentiment data.

Elsewhere in Crypto:

Recent trends in the Bitcoin ETFs market reveal a significant shift in investor sentiment, with funds flowing into BTC exchange-traded funds while gold-backed funds experience notable outflows. 

Bitcoin ETFs Emerge As Preferred Safe Haven

According to a Bloomberg report, US Bitcoin ETFs have attracted over $9 billion in inflows in the past five weeks, primarily driven by BlackRock Inc.’s iShares Bitcoin Trust ETF (IBIT). In contrast, gold-backed funds have seen outflows exceeding $2.8 billion during the same time frame.

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This divergence in investor behavior comes as easing trade tensions have diminished demand for traditional safe havens like gold. Meanwhile, Bitcoin is increasingly being recognized as a viable alternative store of value amid growing concerns about US fiscal stability. 

Furthermore, the market’s leading cryptocurrency reached a record high of $111,980, buoyed by favorable regulatory developments and rising macroeconomic uncertainty. 

Although gold remains up more than 25% this year, it has retreated from its recent peaks, currently trading approximately $190 below its all-time high.

BTC’s Advantages Over Gold

Analysts suggest that this rotation towards Bitcoin ETFs indicates a growing acceptance of the cryptocurrency as a legitimate hedge within investment portfolios. 

Christopher Wood, global equity strategist at Jefferies, expressed optimism for both gold and Bitcoin, noting their effectiveness as hedges against currency debasement in the G7 nations.

However, skeptics argue that Bitcoin’s notorious volatility still undermines its position as a true safe haven. Historical instances of macroeconomic shocks have shown Bitcoin falling sharply alongside other risk assets. Yet, some experts believe that Bitcoin’s decentralized nature gives it an advantage over gold in times of financial system risks. 

Geoff Kendrick, global head of digital assets research at Standard Chartered, highlighted Bitcoin’s dual role as a hedge against both private sector risks, such as the collapse of Silicon Valley Bank in 2023, and government-related concerns, including the stability of the US Treasury.

Kendrick pointed out that recent threats to Federal Reserve (Fed) independence, alongside tariff escalations and broader concerns about US policy credibility, further bolster Bitcoin’s appeal.

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In addition to these factors, Bitcoin appears to be shedding its previous reputation as merely a tech-adjacent risk asset. Dilin Wu, a research strategist at Pepperstone, noted that Bitcoin’s intraday correlation with major indices like the Nasdaq, as well as with the dollar and gold, has significantly decreased. 

The backdrop of growing fiscal strain has intensified the discourse surrounding these assets. Moody’s recently downgraded the US from its last triple-A credit rating, citing concerns over ballooning deficits and national debt. 

This downgrade aligns the US with other ratings agencies, including Fitch and S&P Global, which already rate the country below the top tier.

Despite the recent surge in Bitcoin’s popularity, gold continues to outperform on a year-to-date basis, boasting gains of about 25% compared to Bitcoin’s rise of approximately 15%.

Featured image from DALL-E, chart from TradingView.com