Newsletter Volume 40
Article 1 — The Market This Week
Welcome to the weekly crypto market update. In this report, we will provide you with the latest news and analysis on the cryptocurrency markets, including Bitcoin, Ethereum, and other major altcoins. We will discuss the current market trends, price movements, and other factors affecting the crypto market. Stay tuned to stay up-to-date on the latest developments in the exciting world of cryptocurrencies.
Bitcoin price predictions of reaching six figures by the end of 2024 persist despite recent losses in its value. Publicly-listed Bitcoin mining companies, such as Riot Platforms, might need Bitcoin’s price to exceed $100,000 to maintain profitability. These mining stocks have outperformed Bitcoin itself, surging around 100% in a few months while Bitcoin experienced reduced volatility. However, the upcoming halving, which decreases BTC block rewards by 50%, could pose challenges for these companies’ revenues. Riot Platforms, set to triple its mining capacity in 2024, might also encounter difficulties due to potential dilution of shares if it issues new equity shares for funding. This could lead to a disconnect between sustained fundamentals and the company’s share price.
On the other hand, Coinbase, a major U.S. cryptocurrency exchange, released its Q2 results indicating mixed outcomes. Despite a $97 million net loss and a 32% decline in adjusted EBITDA to $194 million compared to the previous quarter, there were positive aspects such as a 13% reduction in operating expenses and a 3% increase in cash reserves to $5.5 billion. The company faced a 7% drop in subscription and service revenue from Q1, partly due to a 28% decrease in USD Coin (USDC) market cap. Coinbase holds a stake in Circle, the issuer of USDC, and benefits from the stablecoin’s interest rate and customer fiat balances. However, its interest income fell 16% to $201 million in Q2. Notably, Coinbase has shown reduced reliance on trading fees, with subscription and service revenues matching trading revenues in H1 2023, suggesting a shift towards being a service broker focusing on recurring revenues.
Warren Buffett and Bill Ackman, two renowned investors, have divergent opinions on the bond market. While Buffett is purchasing short-term Treasury bills, Ackman is betting against long-term Treasury bonds. This conflicting approach could stem from potential variations in short and long-term interest rates. If the Federal Reserve increases short-term rates to counter inflation, long-term rates might decrease, benefiting Buffett’s strategy but hurting Ackman’s. Alternatively, their differing perspectives could reflect their views on inflation risk. Buffett sees short-term Treasury bills as a secure option amidst market instability and downplays inflation threats, whereas Ackman sees long-term Treasury bonds as overvalued due to significant inflation risks.
KEY METRICS
Total Crypto Market Cap: $1.21 T
Bitcoin Market Cap: $572.19 B
Ethereum Market Cap: $222.07 B
ETH/BTC Ratio: 0.06
Ethereum Gas Price: 19 gwei
DeFi TVL: $74.71 B
Fear and Greed Index: 51 (Neutral)
Federal Reserve Balance Sheet: $8.20 T
Article 2 — Weekly Spotlight on IC15
The global cryptocurrency market remained stagnant due to anticipation of US macroeconomic data. The IC15 Index closed flat at 38,419 on August 4th, with notable gainers including Shiba Inu, Dogecoin, Tron, and Solana, up by 0–5%. On the other hand, Litecoin, Chainlink, Polygon, and Cardano were the main losers, down by 0–4%. Israel’s Tel Aviv Stock Exchange partnered with Fireblocks to provide crypto services for increased regulation and opportunities. LATAM crypto service provider Ripio introduced a stablecoin named UXD pegged to the US dollar, aiming to protect Latin Americans from inflation. The Bank of Russia revealed the official logo for its digital currency (CBDC) and announced commission fee rates for the digital ruble, starting in 2025. A metaverse startup named Futureverse initiated a $50 million venture capital fund to support early-stage Web3 and metaverse startups.
While the IC15 Index concluded the day at 38,269 by 4 pm on Monday. Some cryptocurrencies within the index, such as Shiba Inu, Uniswap, XRP, and Dogecoin, experienced declines ranging from 0 to 5%. On the other hand, Avalanche, Chainlink, Polygon, and Ethereum saw gains in the range of 0 to 4%. Miami Mayor Francis Suarez announced plans to accept cryptocurrency for his 2024 campaign, indicating his supportive stance on crypto. Oman’s Capital Market Authority is seeking public feedback on regulations related to virtual assets, including digital currencies, with a focus on compliance, licensing, governance, and risk management, following FATF guidelines outlined in a consultation document. Hong Kong lawmaker Johnny Ng is working on establishing digital asset connections with a Shanghai-based exchange to enhance collaboration between the web3 industries in both cities. Global X has applied for a spot bitcoin ETF with additional investor protections, and Coinbase is set to be the partner for surveillance-sharing.
On Tuesday, the IC15 Index rose by 114 points to reach 38,383 at 4 pm. Among the Index constituents, Chainlink, Solana, Bitcoin, and BNB experienced gains in the range of 0–3%, while most other coins, such as Shiba Inu, Dogecoin, and Avalanche, faced losses within the same range. The UAE’s Ministry of Climate Change and Environment (MCCE) partnered with the Industrial Innovation Group and Venom Foundation, a blockchain company, to create a secure carbon credit system using blockchain technology, enabling the tracking and trading of carbon credits. The Monetary Authority of Singapore (MAS) pledged 150 million Singapore Dollars (approximately $112 million) to support fintech solutions, including those in the Web3 space. Blockchain.com, a crypto company, obtained a Major Payment Institution license from MAS, allowing it to operate its services in Singapore.
The UK government has announced that the Bank of England and the Financial Conduct Authority (FCA) will jointly supervise stablecoins. In the US, the Federal Reserve has initiated the Novel Activities Supervision Program to manage cryptocurrency-related risks for banks, aiming to ensure customer safety. Binance, the world’s largest cryptocurrency exchange, has obtained licenses for Bitcoin and Digital Asset services from El Salvador’s central bank and crypto regulator. Additionally, Japanese fintech startup Soramitsu is researching the development of a cross-border payment system for Asian countries using central bank digital currencies.
The Bank of England has established an Academic Advisory Group (AAG) to provide guidance on the development of a central bank digital currency (CBDC) in preparation for the upcoming design phase. In Russia, the central bank plans to initiate a real-world pilot study of its CBDC, the digital ruble, involving 13 banks starting on August 15th. Microsoft has teamed up with blockchain platform Aptos Labs to combine Artificial Intelligence (AI) and Blockchain technology, aiming to promote the adoption of Web3 and introduce innovative financial solutions. A research report by Bernstein predicts that the stablecoin market will experience significant growth, potentially reaching $3 trillion in the next five years, up from its current valuation of $125 billion.
Article 3 — The Battle of Bulls and Bears
Bitcoin’s price, represented as BTC, initially dropped to $28,670 but later recovered above $29,000 on August 8th. This movement followed US equities on August 7th. A trader named Jelle noticed a potential falling wedge breakout on daily charts with a target of $32,000 if key resistance was broken. Michaël van de Poppe, CEO of trading firm Eight, considered the previous day’s dip a standard correction and mentioned the upcoming US Consumer Price Index (CPI) release as a potential market influencer. Intraday trading showed mixed activity between market makers and takers on exchanges.
Bitcoin’s price faced resistance but consolidated around a key level on August 9th. After dipping to lows under $28,700, it surged to $30,210, the highest in August. This shift affected traders’ sentiment, with some becoming more bullish. Notably, trader Jelle pointed out a higher low at just under $28,000, suggesting a positive market structure. Traders are cautiously optimistic about Bitcoin’s price movement and are monitoring its consolidation for potential breakouts.
After relisting Ripple’s XRP token for deposits and trading, the Gemini crypto exchange experienced unusual price behavior. Users noticed erratic price movements for XRP, with its displayed price on the exchange occasionally surpassing $1 and even reaching as high as $50. This phenomenon was widely shared on Twitter by members of the crypto community, who referred to it as a “price glitch” or anomaly. The cause behind these irregular price fluctuations remains unclear.
Ether’s price has been steady between $1,800 and $1,900 since July 21, causing uncertainty among investors despite positive events like PayPal’s Ethereum-based stablecoin launch and growing interest in Ether-based ETFs. PayPal’s move could boost Ethereum’s mainstream adoption, yet concerns about centralization and asset control persist.
Article 4 — Weekly Spotlight
Bitcoin price predictions of reaching six figures persist despite recent losses. Publicly-listed Bitcoin mining companies, like Riot Platforms, might need Bitcoin’s price to exceed $100,000 for profitability.
Coinbase’s Q2 results show a net loss but reduced expenses and increased cash reserves. The exchange is shifting towards recurring revenues and reduced reliance on trading fees.
Warren Buffett and Bill Ackman have opposing views on bonds, influenced by interest rate variations and inflation risks.
The global crypto market remained stagnant due to US macroeconomic data anticipation. Some coins gained, like Shiba Inu and Solana, while others like Litecoin and Chainlink faced losses.
Various global developments occurred, such as Miami Mayor accepting crypto for his campaign, Oman’s crypto regulations, and Russia’s digital ruble pilot study.
Bitcoin and Ether prices exhibited volatility, with Bitcoin recovering above $29,000 and Ether steady around $1,800 to $1,900.
Gemini exchange experienced irregular XRP price behavior after relisting.
This update provides insights into market trends, investor sentiments, regulatory changes, and key cryptocurrency price movements.
