Market rebounds on hopes of a rate cut, fresh capital inflow

Hola folks!

Welcome back to the cryptosphere. The past week has been good for the crypto market as investors heaved a sigh of relief after the Fed Chair’s statement that the “time has come” for easing monetary policy. The US economic indicators no longer signal a recession and this too cheered crypto investors.??

Read the crypto market updates below to understand the economic factors that impacted the global crypto market in the past week.

The financial landscape is on the brink of a significant shift as the US central bank rates are almost certain to drop in September, following Jerome Powell's declaration that "the time has come" for easing monetary policy. Markets have reacted strongly, rebounding over the past 19 days from their August 5 dip, with the Dow and S&P 500 now less than 1% below their all-time highs. The Nasdaq trails by 5%, and Bitcoin by 12%, as investors eagerly await the mid-September FOMC meeting, which could trigger a further rally if the expected 25 or 50 basis point rate cut is confirmed.

In the crypto space, Ethereum's supply in profit has fallen to 85.66%, its lowest since November 2023, despite being up 15% year-to-date. This suggests that many who entered the market later in 2024 may now be underwater, adding a layer of uncertainty as we approach Q4. However, Ethereum’s drastically reduced transaction fees, now at $1.47—the lowest since November 2020—could signal a shift in network activity, possibly due to the rise of competing Layer 1 networks like Solana. While this points to increased scalability, it also raises questions about Ethereum’s ability to maintain its dominance.

The crypto dominance is undeniable as crypto companies account for nearly 50% of corporate election spending in the 2024 US election. The increasing crypto dominance is underlined by a historic surge in the stablecoin market cap, which has reached a historic $170 billion+, signaling what experts believe to be new capital entering the crypto space even as the market braces for what could be a pivotal moment in monetary policy.

The AI-based assets added heat to the market as they surged by as much as 70% over the past week, fueled by anticipation of Nvidia's Q2 earnings report.?

Meanwhile, the Ethereum Foundation's recent $96.9 million ETH transfer sparked debate over transparency, though it was clarified as routine treasury management.?

Toncoin has faced a steep decline following the arrest of Telegram CEO Pavel Durov in France, which has rallied high-profile support from figures like Elon Musk and Vitalik Buterin.?

• ETH $2,735 ??4.46%
• FET $1.33 ??61.57%?
• TON $5.63 ??17.50%

(All data here is as of 2.46 p.m., 26 August 2024)

Before we conclude, here’s a quick look at some important news from around the crypto world.

• Toncoin (TON)? is down over 14.5% on Aug. 25 after French media reported that Pavel Durov, the CEO of Telegram, was arrested at Le Bourget Airport as part of a warrant issued by OFIM, an office of the French National Police that is tasked with preventing violence against minors. Read more here.?
• Sony, the Japanese electronics giant famous for developing the Betamax and Walkman in the 1970s, is now starting its own blockchain. Sony Block Solutions Labs, a joint project between Sony Group and Singapore-based Startale Labs, said it’s coming out with a new layer-2 network atop the Ethereum blockchain called Soneium. Read more here.

That’s it for now. Thanks for sticking around.

See you later, folks!