May: ETH strengthened to 3380, DeFi funds saw a slight inflow, the total market capitalization of cryptocurrencies surpassed $3.6 trillion, a 24-hour increase of 8.8%, and BTC spot ETFs saw a net inflow of $1.3 billion in a single day, ending eight weeks of outflows.

New UK crypto advertising regulations take effect, prohibiting misleading advertising; Canadian SOL, AVAX, and DOT spot ETFs approved on June 22nd and about to be listed; G20 crypto regulatory consensus implemented, global KYC/AML standards unified.

The ZK-Rollup token valuation bubble burst, leading to a significant price correction. Blockchain development tool fees increased, raising development costs for small and medium-sized projects. Security vulnerabilities in smart contract libraries proliferated, and OpenZeppelin version updates lagged behind.

Due to the new regulations, three small custody service providers have shut down their businesses because they could not meet the asset segregation requirements. Leading custody institutions have raised their custody service fees to share compliance costs, and Australian pension funds are increasingly favoring leading compliant custody channels when allocating crypto assets.

Deutsche Bank's 2026 interim report forecasts a third consecutive quarterly loss for its crypto segment, exceeding previous institutional expectations. The bank has officially begun a layoff plan in its crypto division, eliminating approximately 15% of R&D and sales positions. The planned tokenized deposit project has been delayed due to the combined impact of the global crypto bear market and rising MiCA compliance costs in Europe.

The Sui public chain experienced a bug in its underlying consensus mechanism during the automatic epoch switching process. This prevented all nodes from properly packaging user transactions, causing a suspension of all mainnet transfers and DeFi operations for over four hours, with only verification nodes maintaining basic operations. After reviewing the incident, the development team stated that they had overlooked extreme scenario testing during the new version iteration testing phase. They subsequently tightened the standards for multiple rounds of internal testing before launch and postponed the next major version upgrade of Sui. Market skepticism regarding the stability of the new generation Move-based public chains intensified, and the combined pressure from SUI token unlocking and negative fundamentals led to a continued decline in its price.

According to The Block, an anonymous wallet created 332 inscriptions via the Ordinals protocol, burning nearly 9 MB of encrypted data onto the Bitcoin blockchain at a cost of 1.5 bitcoins, worth approximately $65,900 at current prices. The most expensive transaction among these 332 was worth several thousand dollars, but most transactions were close to $200. However, because the data remains encrypted and consists of a series of English, Greek, and mathematical symbols, no one has yet been able to read the inscribed data.

Hoo has been allowing withdrawals for 5 days, and the official user group is flooded with withdrawal order numbers, along with various inquiries, including "When can I withdraw USDT?" and "Has anyone successfully withdrawn a certain cryptocurrency?" Some people are also taking the opportunity to send out advertisements for buying USDT at low prices, while others claim to have been scammed after selling USDT from Hoo at a low price. Doubt, dissatisfaction, and panic are spreading among Hoo's user group. The root cause is that users cannot withdraw their crypto assets normally from Hoo. On the one hand, the withdrawal time is longer than usual, and more importantly, users cannot withdraw "hard currencies" with high market value in the crypto asset market, such as BTC, ETH, and USDT, from Hoo.

In late June, Nassim Taleb stated that he believed the current "crypto winter" could develop into an "ice age," meaning the cryptocurrency market downturn could last for a long time. Several years ago, Taleb had expressed positive views on Bitcoin, particularly its potential to help people circumvent capital controls. In the preface to his 2018 book, *The Bitcoin Standard*, he described Bitcoin as "the first organic money," an "insurance policy" against government control of currency.

The sell-off triggered by Bitcoin miners continues due to rising electricity costs and a weak cryptocurrency market. Core Scientific (CORZ), the world's largest publicly traded cryptocurrency mining company, released its first-half financial report, notably showing that it sold 7,202 bitcoins in June at an average price of $23,000, realizing $167 million. As of the end of June, Core Scientific held 1,959 bitcoins and $132 million in cash on its balance sheet. This means the company sold more than 78.6% of its total reserves in bitcoins.

Microstrategy's CEO stated that since the company entered the Bitcoin market in 2020, Bitcoin has still seen an 83% increase, and the company's stock price has risen by 80%. Compared to the Nasdaq and gold and silver markets during the same period, Bitcoin's performance remains far superior. In the long run, crypto assets are bound to outperform these traditional assets because the crypto market is still in its growth phase, not its mature phase. Just like the US and China, although the US economy is larger than China's, China's annual growth rate far exceeds that of the US. This illustrates the universal principle of emerging economies chasing mature economies.

The survey shows that 60% of people believe Bitcoin is more likely to fall to $10,000, 40% believe it will rebound, and 25% of them believe crypto assets are garbage. This is pretty good data. Just like when everyone was unanimously expecting Bitcoin to drop to $100,000, the market suddenly stopped. The more people who expect Bitcoin to crash, the greater the chance of it bottoming out later.

The highly anticipated Ethereum Merge upgrade, originally scheduled for June, was delayed until the second half of the year due to its challenging nature. Now, according to the latest statement from Ethereum developer Tim Beiko, the upgrade could be implemented as early as mid-September. Ethereum currently relies on the Proof-of-Work (PoW) consensus mechanism for mining. Once the Merge upgrade is complete, Ethereum will fully switch to the PoS mechanism, eliminating mining. At that time, users will verify transactions based on the amount of tokens they contribute or stake, thereby earning rewards.

Like traditional economic and financial markets, cryptocurrencies also experience cycles. Crypto market cycles typically last approximately 4 years, or about 1275 days. While methods for defining crypto market cycles vary, we can quantitatively define a cycle as a realized price below the market price (i.e., the current trading price of an asset), using Bitcoin's price as an example. (Note: We excluded the realized price cross below the market price in March 2021 due to the extreme market volatility at that time in response to the COVID-19 pandemic.)🍄‍🟫🍄‍🟫🍄‍🟫

Recently, a court in the British Virgin Islands ordered the liquidation of cryptocurrency hedge fund Three Arrows Capital, whose creditors claim they are owed more than $2.8 billion in unsecured debt. Court documents show that this figure is expected to rise significantly. To date, the liquidators overseeing the bankruptcy have taken control of assets worth at least $40 million.

On March 15th of this year, Aptos completed a $200 million strategic funding round, led by a16z, with participation from well-known crypto firms such as Tiger Global, FTX Ventures, and Coinbase Ventures. At the end of March, Binance Labs also announced a strategic investment in Aptos Labs, the development team behind Aptos, and will collaborate with Aptos on development, code review, infrastructure construction, and hackathons.