Can BTC avoid “Red September”?
There’s never a dull moment on the blockchain. Here’s what you need to know this week:
Bitcoin dipped under $110K. Also, more crypto ETFs could be on the horizon, and the results of Chainalysis’s annual global crypto survey.
Four questions for crypto markets in September. How will crypto fare during a historically challenging month for markets?
Ethereum’s onchain activity just hit a four-year high. Plus, more key stats from around the cryptoverse.
MARKET BYTES
Crypto markets cool to start the month
After surging to new peaks in August, crypto markets cooled to start September, with the total crypto market cap falling from a high of more than $4.1 trillion in mid-August to around $3.78 trillion on Thursday.
Bitcoin dipped just above $107,000 to start the week — the lowest price since early July — before levelling off near $110,000 on Thursday. Ether has outperformed BTC recently, with ETH prices boosted by firms like BitMine Immersion and SharpLink Gaming acquiring billions of dollars of the second-biggest cryptocurrency in recent months.
September is historically a slow month for crypto, but analysts note that this year a widely predicted mid-month interest-rate cut from the Federal Reserve could help spur markets back into action.
Here’s more on crypto ETFs, the countries leading crypto adoption globally, and the week’s biggest headlines…
Bitcoin ETFs regained their lead over ETH funds in new inflows
Throughout August, BTC exchange-traded funds (ETFs) shed around $751 million as Ethereum ETFs gained $3.87 billion — a dynamic largely fueled by the rise of Ethereum treasury companies like BitMine.
But on Tuesday, for the first time in weeks, BTC ETFs were in the green, with around $332.7 million in inflows, while ether ETFs reported net outflows totaling around $135 million, according to SoSoValue data.
Balancing act…“The shift of ETF inflows from ETH to BTC suggests institutional investors may be rebalancing portfolios to capitalize on bitcoin's perceived stability amid macroeconomic uncertainties,” Nick Ruck, director at LVRG Research, told The Block.
More crypto ETFs could be on the horizon
The SEC has applications for more than 90 new crypto ETF products, including funds that would hold tokens including XRP, Solana, Dogecoin, and much more. “These issuers are gonna launch a lot of products and try to find something that sticks,” said Bloomberg analyst James Seyffart, adding that the next 12-to-18 months could see “hundreds of crypto-related ETP launches.”
What ETF is next? Several XRP ETF applicants amended their SEC filings in the last week, which some analysts say could be a sign that a launch is coming soon.
What countries and regions are leading global crypto adoption?
Every year, the blockchain analytics firm Chainalysis publishes a major survey of crypto usage around the world. In this year’s report, the firm found that crypto adoption was sharply up across a wide range of economies.
In North America and Western Europe, which account for $2.2 trillion and $2.6 trillion of crypto activity respectively, regulatory clarity has intersected with a surge in institutional interest (from Wall Street and beyond), and this has helped drive increased adoption of stablecoins, ETFs, and other crypto-powered payments and investment tools.
Latin America, Sub-Saharan Africa, and Eastern European nations like Ukraine have emerged as some of crypto’s “fastest growing hubs,” with blockchain technology increasingly key for day-to-day payments and remittances.
Meanwhile the Asia and the Pacific Islands region (APAC) was home to the biggest gains in adoption over the last year, with a nearly 70% increase in total value received. “Total crypto transaction volume in APAC grew from $1.4 trillion to $2.36 trillion, driven by robust engagement across major markets like India, Vietnam, and Pakistan,” the report noted.
Ramping up… The U.S. remains the world’s largest “fiat onramp,” accounting for $4.2 trillion of value — four times more than the next highest country, South Korea.
CRYPTO Q’S
Four big questions facing crypto in September
After a summer hot streak that saw BTC and ETH chart new all-time highs, the two largest cryptocurrencies dropped to two-month lows to start September. Now, investors are wondering what’s in store for crypto as fall approaches.
Taking into account potential interest rate cuts on the horizon, September’s historically bearish track record, and a growing number of public companies adding crypto to balance sheets, here are some of the biggest questions facing crypto this month.
What could a Fed rate cut mean for crypto markets?
Investors are expecting the Federal Reserve to cut interest rates at its next meeting on Sept. 17, with interest-rate traders assigning a 97% chance of a 0.25% rate cut, according to CME FedWatch.
Generally, the Fed cuts interest rates (which helps make borrowing costs cheaper) in response to signs of an economic slowdown, like a slowing labor market. But in the near-term, interest rate cuts can add liquidity to markets, and are often a boon for assets like stocks and crypto.
According to David Duong, Global Head of Investment Research at Coinbase, a rate cut could mark a key turning point for BTC, which declined by around 7% in August, and the altcoin market, which is down around 6% from its August peak.
As Duong notes, one impact of higher interest rates is capital accumulating in money market funds, which offer predictable yields when rates are high.
But the reverse is also true: Falling rates could lead to an exodus of cash from money market funds and into markets for assets like crypto and stocks. “Once those Fed rate cuts start to happen [retail investors] are going to say, ‘Well, money market funds are not gonna pay me what I want to get paid here,” said Duong.
That dynamic could benefit tokens beyond BTC and ETH, with some traders deciding to “rotate into something riskier” like altcoins.
Can bitcoin buck the historical “Red September” trend?
September is often one of the worst months of the year for bitcoin — and financial markets in general. The S&P 500 has averaged negative returns in September since 1928. And bitcoin has declined by an average of 4% each September since 2013.
Analysts point to a few reasons why the trend persists, like portfolio rebalancing, and an increase in trading activity after months of thin liquidity during the summer.
But some, like Samer Rida, Product Group Manager at Bitso, say that the trend has also become somewhat of a self-fulfilling prophecy. “Once traders believe in a ‘Red September,’ they hedge or derisk ahead of time, and that self-fulfilling behavior reinforces the trend,” he said.
Rida might have a point. After oscillating between “neutral” and “greed” for much of August, the Crypto Fear & Greed Index (which measures market sentiment) reached “fear” levels just before the start of September, marking its most bearish reading since June.
Of course, an interest-rate cut could help this September play out in a different way.
Are crypto treasury firms expanding into other tokens beyond ETH and BTC?
Crypto treasury firms, which are public companies that accumulate crypto on their balance sheets in the hopes of boosting share prices, have been one of the hottest stock market trends of the year.
Emulating Michael Saylor’s BTC accumulation firm Strategy, a new wave of firms has begun buying billions of dollars worth of ETH.
Their popularity has helped Ethereum outperform BTC since the spring, and the trend has started to include other tokens too. NYSE-listed CleanCore Solutions announced a plan on Tuesday to spend $175 million on DOGE, becoming the first-ever Dogecoin treasury company. Meanwhile, Pantera Capital said last month it aims to raise $1.25 billion for a SOL treasury firm, which would add to the approximately $900 million worth of SOL currently held by SOL treasury firms.
Do Ethereum treasury firms show any signs of slowing down?
Not really! This week, Yunfeng Financial, a Hong Kong-based company linked with Alibaba founder Jack Ma, announced its first crypto treasury move with a $44 million ETH purchase. Meanwhile, BitMine Immersion, the biggest ETH treasury firm, reported on Tuesday that its Ethereum holdings are now worth more than $8 billion after its most recent batch of purchases.
Overall, crypto treasury firms hold nearly $100 billion worth of crypto, with around 40% of those holdings added since May, when BitMine and another firm, SharpLink Gaming, announced their initial plans to start purchasing Ethereum.
Speaking to CNBC, BitMine CEO Tom Lee suggested that a potential Federal Reserve rate cut and growing institutional interest could push ETH to the $10,000 to $15,000 range. “Wall Street needs to find a stable and legally compliant blockchain to work on,” he said. “The majority of stablecoin creation is taking place on Ethereum. It is the place where Wall Street is essentially financializing the system.”
NUMBERS TO KNOW
$320 billion
Ethereum’s onchain transaction volume in August, the highest level since May 2021. Boosted by the growth in corporate crypto treasuries and ether ETF inflows, ETH also saw its price jump about 20% in August.
$500 million
Amount that JPMorgan is committing to Numerai, a crowdsourced crypto hedge fund that saw a 25% return last year. The fund uses a “wisdom of the crowds” model in which quantitative traders compete for NMR token rewards by supplying successful trading strategies.
100%
Odds, according to Polymarket CEO Shayne Coplan, that the crypto-powered predictions market will launch for U.S. users, after the Commodity Futures Trading Commission (CFTC) gave the firm a green light.
1
Ranking of the new Pudgy Penguins mobile game “Pudgy Party” in the “Racing” category of Apple’s IOS app store on its release day last week. The original Pudgy Penguins NFT collection remains one of the most valuable in the space, with a floor price of 9.99 ETH (worth more than $44,000) on Tuesday.
QUIZ OVER TOKENS
When was Dogecoin originally created?
A
2011
B
2013
C
2015
D
2017
Zoek het antwoord hieronder.
Antwoord op trivia-vraag
B
2013
