- Price Point: Bitcoin hovers around $20,300, and some altcoins posted gains.
- Market Moves: A look at how crypto products performed in August. Ethereum-based products saw gains, while bitcoin products struggled, perhaps because of the attention on Ethereum ahead of the much-anticipated Merge.
- Chart of the Day: Bitcoin underperforms against the rest of the market in August.
“There's clearly a lack of conviction in the markets following a lot of hawkish central bank commentary in recent days,” Oanda analyst Craig Erlam wrote in a note Wednesday.
“The narrative that investors want to believe is that inflation has peaked and is falling in the U.S. and that a soft landing is plausible. That doesn't necessarily align with what we're hearing,” Erlam wrote.
The U.K., U.S. and European Union are all on track for 75 basis point (0.75 percentage point) interest-rate hikes next month, making it unsurprising that investors are taking a more cautious stance, according to Erlam.
A report from Morgan Stanley said the combined market capitalization of the two largest stablecoins, tether (USDT) and USD coin (USDC), has begun to fall again, a sign that quantitative tightening in the crypto financial system has resumed.
|Terra||LUNA||+3.1%||Smart Contract Platform|
|Cosmos||ATOM||+2.7%||Smart Contract Platform|
|Polygon||MATIC||+2.2%||Smart Contract Platform|
|Loopring||LRC||−1.1%||Smart Contract Platform|
In August, the top 10 cryptocurrencies by market value all mostly traded in the red. Solana’s SOL took the largest hit, down 21%. Bitcoin fell 12%, and ether lost 2%.
Bitcoin products struggle
In August, bitcoin products struggled, while Ethereum-based products saw gains. According to a report from CryptoCompare, bitcoin-based products fell 7.2% to $17.4 billion in August, while Ethereum-based products saw gains of 2.36% to $6.81 billion.
“We could be seeing interest move away from bitcoin in the short term, as Ethereum-based products hold the attention with the much-anticipated Merge on the horizon,” the report said, referring to a software update on the Ethereum blockchain that is expected to occur next month.
Ethereum trusts gained volume supremacy
Grayscale Investments' Bitcoin Trust (GBTC) lost its position as the most traded trust product, according to data from CryptoCompare. (Grayscale is owned by Digital Currency Group, which also owns CoinDesk.)
The average daily volume of the fund totaled $42.3 million in August, down 24.4% from July. Grayscale’s Ethereum Trust took the top spot with an average daily volume of $48.7 million, up 23.2% from July.
Chart of the Day
Bitcoin Underperforms the Rest of the Market in August
- Data tracked by Arcane Research shows that bitcoin has underperformed all indexes in August with a monthly loss of 13%.
- All altcoin indexes continue to move in tandem in August, with performances ranging from -12% to -10%.
- Morgan Stanley Says Stablecoin Market Cap Is Contracting Again: The bank said it sees little evidence of leverage rebuilding in the decentralized finance ecosystem.
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