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Hello, this is the Blockchain Queen! Today's market was truly a rollercoaster that kept us on the edge of our seats, wasn't it? From macroeconomics to individual coin issues, a flood of interesting news came out. From now on, I will analyze this complex market situation for you in an easy and fun way, but always based on facts and figures, as usual!
Recently, the US stock market showed an upward trend, driven by expectations of earnings from artificial intelligence (AI) related companies and news of Iran's withdrawal of attacks. Amazon surpassed a market capitalization of $3 trillion for the first time in history, and Wells Fargo predicted that Nvidia could rise to $315. However, our cryptocurrency market is showing a different trend from traditional stock markets and remains unstable.
In particular, the direction of the 'Clarity Act,' a US cryptocurrency market structure bill, has emerged as a major variable in the market. The White House has remained silent on the ethical compromise, and its exclusion from the Senate voting schedule has made its passage uncertain. The Blockchain Association is urging its passage, arguing that the bill strengthens capabilities to crack down on financial crimes, but Bernstein's analysis suggests that if the bill fails, the SEC and CFTC will accelerate their own regulatory efforts. Regulatory uncertainty is one of the biggest factors that dampen investor sentiment, so this area needs to be continuously monitored.
Furthermore, analysis suggests that cooperation with the US to defend the value of the Japanese Yen could act as downward pressure on Bitcoin's price. This is because market intervention to curb Yen weakness has tended to coincide with sharp drops in Bitcoin. In addition, despite the US Federal Reserve's interest rate freeze, New York Fed President John Williams mentioned the possibility of interest rate hikes if inflation targets are not met, bringing a hawkish stance back to the market.
Regarding domestic news, the government announced that taxation on virtual asset capital gains will be implemented starting next year, with no deferral of taxation. The first reporting and payment will take place from 2028, and overseas transaction data will be secured through the OECD's Crypto-Asset Reporting Framework (CARF) agreement. This is a positive sign for increasing market transparency, but at the same time, it will be a new consideration for investors in terms of tax burden.
Recently, Bitcoin surpassed $64,000 but then fell back below $63,000, testing the $60,000 support line in a precarious situation. In particular, there was a warning that the probability of the $60,000 level collapsing is high in August, and machine learning analysis also predicted a drop to $59,981. However, Markus Thielen, founder of 10X Research, believes that if the monthly candle closes above $63,000, the bear market bottom will be confirmed.
The flow of institutional investors into Bitcoin spot ETFs is also unusual. After a three-week streak of net inflows, $498.5 million was net outflowed in a single day, indicating that institutional buying pressure has again weakened. BlackRock's IBIT ETF even recorded a -45% return over one year. However, an interesting point is Santiment's analysis that after the Coldcard hacking incident, whales holding 10 to 10,000 BTC actually accumulated 19,610 BTC. This can be interpreted as a strong signal that while retail investors are selling due to anxiety, whales see it as an opportunity to buy at a low price.
The recent Coldcard hardware wallet hacking incident has once again raised awareness about Bitcoin security. With predictions of potential damages up to $114 million, former Binance CEO Changpeng Zhao warned, "No wallet is 100% safe." Such security issues can negatively impact market confidence, so investors should always pay special attention to asset security.
Meanwhile, there was news that MicroStrategy (MSTR) sold 1,637 BTC. Michael Saylor stated that he has never sold Bitcoin held personally, and this sale was used to pay preferred stock dividends and repurchase company shares. While this appears to be part of a corporate capital management strategy, it could act as temporary selling pressure on the market.
Despite positive news such as 33.6% of Ethereum's total supply being staked and BlackRock launching a tokenized money market fund, Ethereum has hovered around the $1,860 mark. However, it recorded twice the growth rate of Bitcoin in July, and it remains to be seen if the rally will continue in August. BlackRock, the world's largest asset manager, launching a tokenized money market fund based on the Ethereum network is a very positive signal, as it lays an important foundation for institutional funds to flow into the Ethereum ecosystem.
Despite Ripple (XRP) recording the largest capital inflow among altcoins with cumulative inflows of $1.51 billion into US spot ETFs, it has plummeted 42% this year and is on the verge of breaking the $1 support line. The decline in Real World Asset (RWA) transfer volume by 96.88% in a month and a 90% drop in XRP Ledger's daily settlement volume indicate sluggish network activity, which seems to negatively impact the price. However, Ripple's continuous efforts to enter the institutional financial market, such as investing in Zilo and Liquido to introduce regulatory compliant infrastructure to the XRP Ledger and targeting the Korean and Japanese markets through RLUSD, are positive from a long-term perspective. Particularly, if regulatory clarity is secured in the US, there could be an opportunity for a rebound by breaking above $1.15.
Solana (SOL) has seen its DeFi deposits hit an all-time high, yet its price has plunged 63% and is stuck around the $73 mark. Although the computational limit per block has been increased, some point out that the 'hot account bottleneck' remains. Cardano (ADA) recorded the highest weekly growth rate, driven by large-scale whale accumulation, with analysis suggesting it could repeat the 1,490% rally seen just before the 2021 bull run, mimicking its price structure. While such on-chain growth and network upgrade news are certainly good signals, it may take time for them to translate into price increases.
Shiba Inu (SHIB) saw a brief rally with a 1,395% surge in burn rate but then faltered again due to selling pressure. Analysis also suggests that demand from individual investors has cooled. Pi Network (PI) is in a precarious situation, with the $0.0700 mark at risk, and the danger of hitting an all-time low is escalating. This illustrates a facet of the market where attention is concentrated on certain large altcoins and Bitcoin.
Traditional financial institutions continue to enter the blockchain market, with BlackRock launching an Ethereum-based tokenized money market fund and Aviva Investors launching a tokenized MMF on the XRP Ledger. This is a positive signal that blockchain technology is gradually being integrated into traditional financial systems. These movements accelerate the mainstream adoption of the cryptocurrency market and have the potential to attract more liquidity.
However, not all news is positive. Stablecoin USDC issuer Circle acquired over 1,000 blockchain patents from IBM, but there are critical views that this could be detrimental to the industry. Circle's stock price also plummeted after Morgan Stanley downgraded its price target by 64%. Concerns that patent acquisition could be used as a tool to hinder innovation are areas that must be carefully watched for the healthy development of the blockchain ecosystem.
PayPal (PYPL) establishing a dedicated cryptocurrency business unit and emphasizing stablecoins as the future is very encouraging news. This shows the willingness of a major payment company to acknowledge the potential of blockchain technology and actively participate in the market. Robinhood is also continuing its business expansion by obtaining approval for cryptocurrency services in the UK.
Finally, discussions about the role of blockchain in the era of AI and quantum computing are also active. Jim Cramer announced plans to sell all his Bitcoin holdings due to quantum computing concerns, but Tom Lee argues that cryptocurrencies could be a safeguard to protect humans in an AI-driven transaction economy. Such technological debates will be an important topic that shapes the future direction of blockchain technology.
Today was truly another dynamic day. The market is always full of unpredictable variables, but we must always make wise investment decisions based on cold analysis and facts, as always. I will return with more good news in the next column!
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