Below is a compilation of selected news about the cryptocurrency market over the past week and forecasts for the overall market movements in the coming week.
- Bitcoin (BTC) price has dropped nearly 17 percent in the last week and is trading at around $20000.
- The price of Ethereum (ETH) is also down 14% and is currently at around $1500.
- Binance Coin (BNB) also lost momentum by nearly 6%, currently trading at around $280
Remarks by Fed Chairman Jerome Powell
Last Friday, August 26, the Fed chairman gave a speech in Wyoming. In his speech, he hinted at the possibility of an unusual hike in the federal funds rate in September. On this information, he signaled earlier in the FOMC meeting on May 7. Powell, however, is unsure of that increase. Instead, he said it will depend on the total amount of incoming data and the evolving outlook.
Bitcoin’s price has recovered to nearly $25K over the past month but has quickly dropped to $21-22K in about a week, especially in the days leading up to Powell’s Friday speech. And over the next two days, the price of Bitcoin fell further and even fell below $20K. The stock market also fell sharply.
No crypto bill passed
The regulations on cryptocurrencies are both unclear and certain. The reason is the absence of cryptocurrency bills passed before the US midterm elections. In addition, the market as a whole is looking forward to the election results of the House and Senate. Proposed bills such as the bipartisan Lummis-Gillibrand “Responsible Financial Innovation Act” were also sidelined.
Meanwhile, the cryptocurrency industry is awaiting the results of OFAC’s sanction on smart contracts in the Tornado Cash scandal. The industry as a whole is also questioning whether Securities and Exchange Commission (SEC) Chairman Gary Gensler’s assertion that most digital assets under the SEC’s jurisdiction will be of long-term importance is true or false.
Gensler recently argued in a WSJ journal that cryptocurrencies should be treated like any other capital market, even if its technology base is still fairly new. Gensler received criticism last week from the likes of Mark Cuban and Republican Rep. Tom Emmer. They have accused the SEC’s oversight practices of being bad and that it is unwilling to relinquish jurisdiction, even if it is not.
Catawba Publishes Draft of Decentralized Autonomous Organizations (DAOs)
This Indian nation published a draft with the content Decentralized Autonomous Organization. This draft can be recognized and managed by the Catawba Digital Economic Zone (CDEZ). CDEZ is gathering comments from the public, which is anticipated to end by Sept. 10. In addition, this unit has set up the Discord channel as a public forum.
The draft regulation sets out provisions for the recognition of two types of legal entities:
- “Decentralized Autonomous Non-Profit Association” (“DAO UNA”)
- “Limited Liability Decentralized Autonomous Organization” (“DAO LLC” or “LAO”).
With the regulatory framework in effect in the North American region and the collaboration of innovation-friendly regulators (in states like Wyoming), we can see DAOs potentially under CDEZ control in the future.
Crypto news in the coming weeks
- Tether will publish monthly reports instead of quarterly as before. It is known that this unit has hired a leading accounting firm, BDO Italia to assist them in doing this.
- The Ethereum blockchain is expected to launch The Merge on 09/15.
Top 10 Cryptocurrencies
Overview of the information of the 10 coins with the largest total market capitalization, according to Brave New Coin. Overall, the figures dropped significantly across the board (excluding stablecoins). Solana (SOL) and Bitcoin (BTC) were hit the hardest: down ~25% and ~17% respectively from the previous week. Their decline came after a speech Friday by Fed Chairman Jerome Powell.
BTC Price Chart
This week, Glassnode took a look at various indicators on the Bitcoin blockchain to see if there could be some fundamentals that could take the market up. Glassnode found no such principle.
Example:
- Bitcoin’s 30-day monthly average of new addresses is lower than the 365-day average (low market demand).
- Miner fee revenue is declining (currently at around 2% of the total transaction value).
- Total transactions valued at less than US$1 million have declined since Q1 2021, while complete transactions valued over US$1 million are on par with the same period. This indicates a relative decline in retail activity and the lack of new regulatory institutions.
- The cash flow in and out of exchanges also decreased.
- Consider the 90-day realized net profit/loss: the current loss is equivalent to the past high (in 2018 and the first part of 2019).
