Bitcoin Price: US$ 59,169.54 (+3.08%)
Ethereum Price: US$ 2,538.01 (+4.63%)
Since the Dencun upgrade in March 2024, which lowered transaction fees and spurred competing layer-2 solutions, Ethereum’s layer-1 network revenue has plummeted by 99%, leading to a reduction in demand for Ethereum’s base layer and a subsequent drop in ETH’s price below $3,000. Meanwhile, Bitcoin is anticipated to be nearing a “tactical bottom” due to potential rate cuts by the Federal Reserve, which could create a more favourable environment for Bitcoin. Despite recent price drops, Bitcoin remains up 31% for the year, with future performance expected to be influenced more by monetary policy than recession risks. Additionally, cryptocurrency ETFs have dominated 2024’s largest ETF launches, with spot Bitcoin ETFs leading in inflows, such as BlackRock’s iShares Bitcoin Trust, which has attracted nearly $21 billion. The market for these ETFs is expanding rapidly, with total net assets exceeding $60 billion and anticipated growth in both single-asset and diversified crypto indexes.
Bitcoin is projected to reach $110,000 by 2025, supported by bullish technical patterns such as the cup-and-handle and inverse head and shoulders formations, though analysts warn of a potential dip below $40,000 before this milestone. Despite these optimistic forecasts, Bitcoin may first face a significant correction, with some experts predicting a market bottom around $57,000. In parallel, Qatar has introduced a new regulatory framework for digital assets that includes tokenisation processes, legal recognition of smart contracts, and custody arrangements to enhance its financial sector and digital transformation efforts. This framework is designed to ensure security, transparency, and adherence to international standards, while supporting up to 100% foreign ownership and repatriation of profits within the Qatar Financial Centre. Meanwhile, crypto investment products saw $305 million in outflows last week, driven by strong US economic data and anticipated interest rate cuts. Bitcoin-based products experienced the largest withdrawals, whereas short Bitcoin products and blockchain equities, particularly those related to Bitcoin mining, saw contrasting inflows.
NFT sales fell to a yearly low of $374 million in August 2024, representing a substantial decline from March’s peak of $1.6 billion and continuing a downward trend since April. Although average sale values and transaction volumes have increased, speculative capital seems to be shifting from NFTs to memecoins. In other news, Metaplanet, a prominent Japanese Bitcoin investor, has teamed up with Ripple’s associate SBI Group to enhance Bitcoin trading and custody services, focusing on tax-efficient storage and leveraged trading. This partnership aims to strengthen Metaplanet’s corporate Bitcoin strategy, capitalising on SBI’s extensive regulatory and financial expertise.Furthermore, OKX has obtained a major payment institution license in Singapore, enabling it to facilitate crypto trading and cross-border transfers beyond previous volume limitations. The exchange has also appointed former MAS regulator Gracie Lin as its new CEO, further solidifying Singapore’s position as a leading global hub for digital assets with its crypto-friendly regulatory environment.
Central banks have been buying gold at record levels in 2024, with purchases reaching 483 tonnes in the first half of the year, surpassing the previous record set in the same period of 2023. Despite this gold accumulation surge, Bitcoin has outperformed gold with a 37% appreciation in 2024 compared to gold’s 23% increase. Although gold’s price hit an all-time high of $2,525 per ounce in August, Bitcoin’s performance remains stronger, despite some volatility and a recent decline from its March peak. Meanwhile, the Cardano blockchain has successfully implemented its Chang hard fork, enhancing its governance model and smart contracts toward greater decentralisation, although ADA’s price has continued to struggle post-upgrade. In a separate news, Bitcoin miners saw their lowest revenue in 11 months in August 2024, with a 10.5% drop from July and a 57% decline from March’s peak, due to higher mining difficulty and reduced transaction volumes. This decline in mining revenue contrasts with the trend of increased accumulation by Bitcoin whales, as the number of wallets holding 100 BTC or more has reached a 17-month high, indicating that larger holders are buying while smaller traders are selling off their holdings.
Source: https://cointelegraph.com
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