September 2024 Digital Asset Market Commentary – CKC.Fund

Key Takeaways:

??? Successive interest rate cuts show promise for risk-on assets

?? Total digital asset market cap increases slightly

?? Caroline Ellison of Alameda Research/FTX sentenced to prison

?? Tokenized RWAs expected to be a $10 trillion market by 2030

?? Growing stablecoin adoption/usage in Africa and Australia

?? Another Digital Asset ETF gets U.S. approval

? Complex AI models show a higher tendency to give wrong answers

?? Celo sees record stablecoin volumes on its blockchain

Market Performance:

Over the month, ETH’s market cap is down slightly. BTC and other altcoins have increased their market cap by 9% and 12%, respectively. Collective stablecoin volume increased slightly while the overall market also increased — ostensibly signaling bullish sentiment in the digital asset sector.

Macroeconomics:

A trifecta of interest rate cuts from several central banks is lowering borrowing costs and is predicted to be bullish for digital assets and other “risk on” assets. With inflation approaching central bank targets of 2%, there is speculation that another cut is on the horizon, further catalyzing a risk-friendly investment ecosystem.

During the September Fed Meeting in the U.S., interest rates were cut by 50 basis points. This is intended to bolster economic growth and stabilize a lagging labor market.

BTC/ETH/Digital Asset News:

The last week of September saw a notable uptick into digital asset product investment with over $1.2 billion in inflows in the U.S. alone. Some speculate that this was in response to positive reactions to U.S. monetary policy.

Stablecoin volumes have seen a notable uptick on various blockchain protocols, with Celo showing record volumes in September.

Memecoins, AI + Other Technology Trends in Crypto:

A recent AI study showed that the bigger and more advanced the AI model, the more likely it is to lie. While the adage that bigger AI models tend to be better at answering complex questions, it also seems they are less reluctant to say they don’t know the answer. Burgeoning AI project ASI voted to add cloud computing and blockchain platform Cudos to its expanding network.

Innovation/Development News:

?One Wall Street behemoth recently tokenized $20 million in commercial paper on Ethereum. A recent study projects the real-world asset (RWA) tokenization market will grow from $118 billion to $10 trillion by 2030. Driven by regulatory clarity and institutional appetite, RWA tokenization can bring liquidity to private equity, real estate, and other suitable assets.

International News:

A major stablecoin issuer is bringing stablecoin exposure to institutional investors in Australia and the Asia-Pacific (APAC) region. This echoes a similar initiative in Japan that will see this issuer further penetrate these burgeoning markets.?

The Middle East (ME) is now accounting for 7.5% of global crypto volume. This is largely driven by institutional and professional investors, with the United Arab Emirates (UAE) becoming a major hub in the region.?

Stablecoins now account for 43% of sub-Saharan crypto transactions. This is driven by unmet USD demand and the devaluation of local currencies.?

Regulatory & Legal News:

September was a busy month for digital asset enforcement actions and associated legislation. Former Alameda Research CEO Caroline Ellison was sentenced to a two-year prison sentence for her involvement in the FTX debacle. The SEC approved the trading of options for BlackRock’s spot BTC ETF while denying the motion for a hybrid BTC and Carbon Credits ETF.

Stay in Touch

Navigating the ever-changing landscape of digital assets can be a challenge. That's why we’ve created this newsletter to help bring clarity to the complexity. In addition to a monthly summary of the most important crypto news, we layer in insightful commentary from insiders and experts who understand the cryptocurrency market.

If you’re interested in enhancing your understanding of this rapidly evolving space, we kindly suggest you follow us on LinkedIn. Stay one step ahead in the world of digital assets with us. You are also welcome to reach out to us at [email protected] if you would like to know more. The CKC.Fund Team [email protected]

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