August 8:?U.S. Initial Jobless Claims?
With this mornings big decline in crypto markets, we'll first need to see how traditional markets open up around the world today to see if they slide into correction territory further, sparking another wave of sell-offs in crypto. For the week, the key event to monitor will be the update on U.S. initial jobless claims, as July's job report was what first kicked off recession worries.????
Last week, the crypto market witnessed notable fluctuations. Key events included governmental actions and economic data releases impacting Bitcoin price and broader market sentiment. Some of the key events that occurred:
- Bitcoin 2024: Donald Trump declared that the U.S. will retain Bitcoins worth approximately $14.5 billion, currently held by the government, to establish a strategic national Bitcoin reserve. Trump emphasized that this stockpile is intended to be a key component of U.S. strategic reserves.
- U.S. Government Wallet Transfers: Recent large-scale transfers of Bitcoin by the U.S. government, totaling $2 billion, added to market volatility, fueling discussions and concerns over potential sell-offs.
- Jobs Report and Economic Outlook: The data releases indicated a significant cooling of the U.S. labor market, as unemployment unexpectedly rose, sparking concerns over a global economic slowdown. This negatively impacted risk?assets.
- Additionally, the Bank of Japan's decision to raise interest rates exacerbated these concerns, leading to a short-term implosion in the yen carry trade.
Over the weekend, we added some additional concerns to the aforementioned events from last week:
- War in the Middle East potentially on the verge of eruption
- Rumors of Jump Trading selling off their holdings as they exit the crypto market.?
- "Trump Trade" unwinding as the odds for a Trump victory have declined significantly in just the past two weeks, which markets are taking as a bearish outcome for future prices??
The combination of all of these worries culminated in the sharp sell-off we saw this morning.
While it is too early to say if the bottom is in for this current drop, we can see from the chart above that we have fallen back to the bottom of the flag that we highlighted was a likely possibility in last week's edition. Of particular worry is the speed with which we reached the lower level of this channel, which means we may see additional selling going forward.
However, we can see the sizeable bounce that occurred once our 2nd support level in the $52k region was touched and we also witnessed what could be a capitulation candle, which can be seen in the long wick that was left behind once price rebounded back upwards.
It's too early to tell if we have reached the bottom of this current drop, but the support that exists between $50-52k and the long-term pivot level of $48k will be significant going forward and if they are to hold, then we could see rebounds in many of the altcoins that have taken particularly heavy losses over the weekend.
We will be scouring the markets and reporting on potential recommendations for altcoins that can currently be found at attractive discounts. Stay tuned.?
- SEC?backs down on claiming SOL, ADA, MATIC, and other tokens are securities in Binance suit Commentary: The United States Securities and Exchange Commission (SEC) is no longer asking a court to decide and deem the tokens named in its lawsuit against crypto exchange Binance as securities. In its suit against Binance, the SEC claimed several tokens were securities. The list includes BNB, Binance USD, Solana, Cardano, Polygon, Cosmos, The Sandbox, Decentraland, Axie Infinity, and Coti (COTI). These tokens are just part of a bigger list of tokens that the SEC believes to be securities. In June 2023, the SEC claimed at least 68 tokens were securities, affecting more than $100 billion worth of cryptocurrencies in the market.
- Sen. Lummis?draft bill allows US states to hold Bitcoin Commentary: The bill is called the “Boosting Innovation, Technology, and Competitiveness through Optimized Investment Nationwide Act of 2024” or shorthand, the “BITCOIN Act of 2024,” according to a draft version. The bill creates a "Bitcoin Purchase Program" that will buy no more than 200,000 Bitcoin a year over five years, amounting to 1 million BTC.
- MicroStrategy?raises holdings to 226,500 bitcoin, introduces BTC yield metric Commentary: MicroStrategy said Thursday that since the beginning of the second quarter, it had acquired 12,222 bitcoin for $805.2 million and introduced a new key performance indicator for its bitcoin strategy. Its total bitcoin holdings, 226,500 BTC, came at a cost of $8.3 billion, or $36,821 per bitcoin, as of July 31. The company said its "BTC yield" stands at 12.2% in the year-to-date period, and it will target 4% to 8% annually over each of the next three years. BTC yield is the percentage change over time in the ratio of MicroStrategy's bitcoin holdings to its diluted shares outstanding.
- Telegram?launches an in-app browser and mini-app store in the new update Commentary: The crypto-friendly communications platform Telegram has launched a browser and mini app store along with other updates. Users can switch between websites and platform messaging with the browser, which includes decentralized websites called TON Sites. Telegram users can also send Stars, units of the mini-app payment system, to their friends, in addition to improvements to the platform's app store such as search options, previews of the app from developers, and sharing mini-apps into a user's content called Stories.
- Coinbase?posts $1.45 billion in Q2 revenue as profits decline Commentary: Coinbase reported that it generated $1.45 billion in revenue during the second quarter of this year. Net income dropped to $36 million compared to nearly $1.2 billion in Q1. Consumer transaction revenues declined to $665 million, a 29% drop compared to Q1, while stablecoin revenues rose to over $240 million, up from $197.3 million in the previous quarter.
- Tether?generates a record $5.2 billion profit in the first half of the year Commentary: Leading stablecoin firm Tether released its latest quarterly attestation Wednesday, reporting a record net profit of $5.2 billion for the first half of 2024. The company eached a net operating profit of $1.3 billion in the second quarter, largely due to its yield-bearing investments and reserves. Tether has been reinvesting its profits in several efforts including decentralized AI, Bitcoin mining, and a peer-to-peer messaging platform called Keet. It has seen growing profits every year since at least 2022.
- Bitcoin miner?Riot Platforms?miss estimates with wider Q2 loss Commentary: Bitcoin miner Riot Platforms missed estimates after posting its first quarterly loss since 2022, as the miners continue to feel the impact of April’s halving event. Riot posted a Q2 net loss of $84.4 million, or $0.32 per share, double the $0.16 per share loss forecasted by investment research firm Zacks. It's the first time the firm has reported a quarterly loss since Q4 2022.
- USDC trading volume?soars 48% in July, driven by MiCA, market growth Commentary: Circle’s stablecoin trading volume spiked in July thanks to a surge in market inflows and new European rules for digital assets. With the implementation of the European Union’s Markets in Crypto-Assets (MiCA) regulatory framework, Circle became the first stablecoin issuer to be approved by regulators in the region on July 1. During the same period, Tether grew slower but still posted a record 11 consecutive monthly market capitalization increases to $114 billion. Tether's market cap increased by 1.6% in July.
- Trust Wallet?partners with TON for further blockchain adoption Commentary: Trust Wallet, a self-custody Web3 wallet provider, has partnered with The Open Network (TON) to increase the adoption of blockchain technology. Through the collaboration, Trust Wallet will be able to tap Telegram’s user base to focus more heavily on gaming finance (GameFi) and decentralized applications (DApps). The integration promises to improve how users interact with TON’s blockchain technology and plans to enable TonKeeper wallet imports into Trust Wallet “in the coming weeks.”
- Compound?reaches truce with crypto whale Humpy after a controversial vote to move $24 million in tokens Commentary: Compound Finance resolved a governance conflict with the pseudonymous crypto whale Humpy. The controversy began after Proposal 289 was approved in a vote to allocate $24 million from Compound’s treasury to a yield-bearing protocol. The proposal faced criticism and accusations of manipulation, attributed to a small group buying large amounts of COMP tokens to influence the outcome. A new offer proposes a new staking product aimed at aligning with the interests of all parties - especially catering to Humpy’s needs as a delegate and COMP holder.
- DEX market share?surges to record high, outpacing centralized exchanges Commentary: The market share of decentralized exchanges (DEXs) compared to centralized exchanges (CEXs) has hit an all-time high. The monthly trade volume of DEXs relative to CEXs is already at its highest ever, at 14.22%. The previous record high occurred in May 2023 at 13.7%. Uniswap brought in the most monthly trading volume at $48.52 billion, with Raydium entering second with $27.78 billion in July.
- Artists sue SEC?over whether NFTs are securities, use Taylor Swift tickets as an example Commentary: Law professor Brian Frye and “Song a Day Mann” songwriter Jonathan Mann filed a complaint against the U.S. Securities and Exchange Commission on Monday. Lawyers for Frye and Mann accused the SEC of waging a "campaign to assert jurisdiction over sales of digital art," citing two recent cases of the agency honing in on NFTs. Both have NFT projects in the works and are seeking a declaratory judgment from the court. The SEC brought its first NFT charges against the YouTube channel and podcast studio Impact Theory almost a year ago. The agency said Impact Theory "encouraged potential investors to view the purchase of a Founders Key as an investment into the business, stating that investors would profit from their purchases if Impact Theory were successful in its efforts."
- Chainlink?integration adds transparency to 21Shares Ether ETF Commentary: 21Shares has integrated Chainlink’s proof-of-reserve (PoR) system to create more transparency for its Core Ethereum exchange-traded fund (ETF). 21Shares, one of the world’s largest issuers of crypto exchange-traded products (ETPs), aims to build greater trust in its physically-backed Ether ETF by integrating proof of reserves. The PoR system will offer real-time reserve data and a reserve history, available as a publicly verifiable feed that pulls data directly from the Coinbase exchange. “21Shares is playing an important role in supporting the adoption of digital assets, and the Chainlink platform is helping financial institutions realize the vision of seamless tokenization on a global scale.”
- Aave's fee switch?proposal sparks major rally in AAVE token Commentary: Marc Zeller, the founder of one of the top independent organizations providing services for Aave DAO, published a temperature check for a new Aave governance proposal that would lead to a “fee switch.” The proposal's “buy & distribute” program, which would use the protocol’s fee revenue to acquire or “buy back” AAVE on the secondary market, garnered significant attention. Despite this bullish price performance, Aave’s underlying protocol metrics, such as its outstanding debts or Total Value Locked (TVL), were not significantly affected.
- Trump?says he'll fire SEC Chair Gensler and create strategic Bitcoin reserve if elected: Bitcoin 2024 Commentary: Donald Trump, in a keynote address to the Bitcoin 2024 conference in Nashville, promised to fire SEC chair Gary Gensler and stop the US from selling its bitcoin holdings, creating a “strategic bitcoin reserve,” if elected in November. Trump also promised to end “Operation Chokepoint 2.0” and other anti-crypto policies to support the domestic digital asset industry.
- Hong Kong?legislator eyes Bitcoin for fiscal reserves Commentary: Hong Kong Legislative Council Member Johnny Ng has announced plans to collaborate with various stakeholders to assess the feasibility and potential benefits of incorporating Bitcoin into the special administrative region’s financial reserves. He highlighted the importance of considering Bitcoin in strategic fiscal reserves, suggesting that its inclusion could benefit Hong Kong’s economic framework under the right regulatory conditions.
- August 14?- U.S. Consumer Price Index for July
- August 30?- BTC CME August (BTCQ24) Options Expiry
- September 18?- U.S. FOMC Interest Rate Decision
- September 27?- BTC CME August (BTCU24) Options Expiry
- November 7?- U.S. FOMC Interest Rate Decision
