My Dear Readers,
This week, from July 29 to August 3, the cryptocurrency market faced a downturn. Bitcoin (BTC) dropped 9.69% to $61,642. This decline was influenced by:
US Government Transfers: The US government transferred $2 billion worth of BTC to crypto wallets, coinciding with Mt. Gox’s movement of funds to repay creditors.
Mt. Gox and Genesis Trading Movements: Genesis Trading began repaying creditors, raising concerns about oversupply. Arkham Intelligence reported that Genesis-linked wallets moved 16.6K BTC ($1.1 billion) and 166.3K ETH ($521.1 million) in one hour.
Genesis plans to repay about $4 billion, while Mt. Gox aims to repay around $9 billion. These repayments, combined with fears of a US recession and BTC-spot ETF market trends contributed to the BTC sell-off.
US Labor Market Data Fuels Recession Fears
On August 2, the US Jobs Report heightened recession fears:
Unemployment Rate Increase: The US unemployment rate rose from 4.1% in June to 4.3% in July, suggesting a potential slowdown in private consumption.
Economic Impact: A weaker labor market reduced wage growth and consumer confidence, affecting spending. Since private consumption accounted for over 60% of the US economy, reduced spending had significant repercussions.
Ethereum (ETH) Falls Below $3,000
Ethereum (ETH) fell 9.61% during the same period:
Market Trends: ETH’s drop mirrored the broader market downturn, with recession fears impacting demand for riskier assets.
Oversupply Concerns: Genesis Trading’s repayment plans and the US ETH-spot ETF market’s inability to absorb oversupply contributed to ETH’s decline. The US ETH-spot ETF market saw total net outflows for the week ending August 2.
Grayscale Ethereum Trust (ETHE): $603 million in outflows.
iShares Ethereum Trust (ETHA): $270.8 million in inflows (excluding Friday’s data).
Fidelity Ethereum Fund (FETH): $77.7 million in inflows.
Grayscale ETH Mini Trust (ETH): $36.8 million in inflows.
Excluding Friday’s data for ETHA, the US ETH-spot ETF market had net outflows of $115.1 million.
XRP Volatility Amid SEC Settlement Hopes
XRP fell 7.12% to $0.5595 during the same period:
Settlement Speculations: Despite the market downturn, hopes for a settlement between the SEC and Ripple limited XRP’s losses. The SEC has scheduled a Closed Meeting for August 8, possibly discussing a Ripple settlement, which could boost XRP demand if a resolution is reached.
Other altcoins also mirrored this bearish trend. The cryptocurrency market experienced significant volatility this week, driven by broader economic concerns and market dynamics. Let's dive into the top crypto news that happened this week.
Top Crypto News of This Week
1️⃣ Powell Indicated Possible Rate Cut
Jerome Powell suggested a potential rate cut in September if inflation met criteria.
2️⃣ Bank of England Reduced Rates
The Bank of England cut interest rates to 5% for the first time in over four years.
3️⃣ Bank of Japan Increased Rates
The Bank of Japan raised its policy rate to around 0.25% during its meeting.
4️⃣ Trump Proposed Bitcoin Changes
Donald Trump vowed to fire Gensler, establish a Bitcoin reserve, and support crypto innovations.
5️⃣ Harris Campaign Reached Out to Crypto Leaders
Kamala Harris’s team engaged with crypto figures to shape future regulatory frameworks.
6️⃣ Senators Proposed Bitcoin Purchase Plan
Senator Cynthia Lummis introduced a plan to buy 1 million bitcoins over five years.
7️⃣ Vitalik Outlined Ethereum’s Future
Vitalik Buterin emphasized building apps and proposed innovative ideas at EDCON2024.
8️⃣ Musk Denied Crypto Promotion Intent
Elon Musk stated he had no intention to promote cryptocurrencies, clarifying any mentions were jokes.
9️⃣ Snowden Warned on Bitcoin Privacy
Edward Snowden highlighted Bitcoin’s traceability and urged improved privacy measures.
🔟 MicroStrategy Reported Loss, Increased BTC Holdings
MicroStrategy reported a $102.6 million loss but increased Bitcoin holdings to 226,500 BTC.
That's it for today! Thanks for reading. Stay tuned for our weekly updates. Have a great weekend!😀
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