Cryptocurrencies plunge amid recession fears and global tensions
On Monday, Bitcoin (COIN:BTCUSD) dropped from $57,531.60 to $49,050, partially recovering to $53,799. Over $350 million in long positions were liquidated in two days, the highest value in four months. Ether hit a low of $2,112.00, the largest daily drop since 2021, recovering to $2,416.23. Other cryptocurrencies like Dogecoin (COIN:DOGEUSD), Ripple (COIN:XRPUSD), TonCoin (COIN:TONCOINUSD), Near (COIN:NEARUSD), Avalanche (COIN:AVAXUSD), and Cardano (COIN:ADAUSD) faced significant losses, and the global stock market suffered as well.
Bitcoin’s dominance in the cryptocurrency market rose to nearly 60%, the highest this year, with its total market share increasing due to losses in other cryptocurrencies.
The decline was driven by U.S. economic data and recession fears, tensions in the Middle East, and asset sales by Jump Trading and Paradigm VC. Since July 24, Jump Trading sold $377 million in Wrapped Lido Staked ETH (COIN:WSTETHUSD). This massive sale exacerbated the decline, putting Ether at risk of falling below $2,200 and triggering more panic selling.
Shares of cryptocurrency companies also experienced significant drops, with Coinbase (NASDAQ:COIN) and MicroStrategy (NASDAQ:MSTR) seeing losses of -6.2% and -9.3%, respectively.
Trading volume in Bitcoin ETFs spikes after market drop
Trading volumes in Bitcoin ETFs surpassed $2 billion during the August 5 session, reflecting intense trading activity in response to market declines. The iShares Bitcoin Trust (NASDAQ) led with over $81 million in traded shares volume. This surge follows a drop in Bitcoin’s price to a low of $49,050.01, triggered by significant Ether sell-offs by large funds.
Economic concerns spur calls for Fed rate cuts
With global financial markets facing significant declines, attention is turning to the U.S. Federal Reserve, which has kept rates between 5.25% and 5.5%. Amid disappointing job reports and macroeconomic pressures, calls for an emergency rate cut are growing. Experts like Jeremy Siegel from the Wharton School suggest a 75 basis point cut now to avoid past policy mistakes and mitigate recession risks.
Carry trade reversals trigger financial market chaos
On Monday, investors rushed to reverse “carry trades,” a strategy involving borrowing in low-interest currencies to invest in higher-yielding assets in other currencies. This move came in response to a dramatic global sell-off of risk assets, driven by weak U.S. economic data and a more aggressive stance from the Bank of Japan, sparking speculation of unwinding profitable positions to cover losses in other investments.
Xapo Bank expands operations to the UK with unique account offering
Xapo Bank, a Bitcoin-focused institution, announced its expansion to the UK, becoming the first licensed bank in the region to offer combined fiat and Bitcoin interest-bearing accounts. The expansion was made possible after successfully transferring its banking license to the UK through the “passport” scheme, allowing direct operations in the British market.
Hackers buy Ether with stolen funds taking advantage of price drop
Hackers took advantage of the recent drop in Ether’s price, from $2,687.38 to $2,112 in less than 12 hours, to acquire 16,892 ETH with stolen funds from the Nomad bridge hack. Using 39.75 million Dai, the criminals bought Ether and moved the funds to Tornado Cash to obscure their origins. Other stolen funds, such as those from Pancake Bunny, are also being moved.
Robinhood maintains 24-hour trading despite suspension rumors
Despite rumors that Robinhood Markets (NASDAQ:HOOD) had suspended its 24-hour trading service due to market volatility, the company confirmed that the service continues to operate normally. Reports of suspension circulated on social media amid significant global market turmoil, comparable to crisis periods in 2020 and 2008. However, Robinhood denied these claims, keeping trading open during market volatility.
Aave gains $6 million during cryptocurrency market liquidations
The founder of the DeFi protocol Aave (COIN:AAVEUSD) revealed that the platform generated $6 million in revenue during the recent cryptocurrency market liquidation. The decline, driven by the Bank of Japan’s interest rate hike and the U.S. job report, caused AAVE’s market cap to drop by up to 28.62%. Despite the challenges, Aave maintained $21 billion in value and raised $802,000 from Ether position liquidations. The token is currently down -14.8%.
Justin Sun denies rumors and announces $1 billion fund
Justin Sun, founder of Tron and Huobi, denied that HTX leveraged positions were recently liquidated, stating that the exchange rarely uses leverage. He announced a $1 billion fund to combat uncertainty and provide liquidity, but no additional details were provided. Sun also dismissed rumors of large futures trades and criticized the lack of transparency in information disclosure.
Elon Musk renews legal dispute with OpenAI
Elon Musk has reopened a legal dispute with OpenAI, accusing co-founders Sam Altman and Greg Brockman of prioritizing profits over public good. Less than two months after dropping a previous lawsuit, Musk claims he was misled into founding the organization, which initially promised to focus on altruistic AI research. He now asserts that OpenAI has deviated from its original mission for self-enrichment, citing a lucrative partnership with Microsoft.
Argo Blockchain maintains stable production in July 2024
Argo Blockchain PLC announced that it mined 48 BTC in July 2024, maintaining an average daily production of 1.5 BTC, similar to the previous month. Mining revenue reached $3 million, with a 20% margin, slightly lower due to a reduced hash price. By the end of July, the company held 11 BTC. These results reflect Argo’s operational consistency, prioritizing renewable energy use in its activities.
New bill expands U.S. Secret Service authority in cryptocurrency crimes
A new Senate bill seeks to expand the U.S. Secret Service’s authority to investigate cryptocurrency-related crimes. Introduced by Senator Catherine Cortez Masto and Senator Chuck Grassley, the bill aims to combat crimes such as money laundering and financial fraud. The legislation proposes increased collaboration between agencies and additional resources to address growing cyber threats.
Gene Sperling leaves White House to support Kamala Harris campaign
Gene Sperling, a long-time economic advisor who has worked with the Biden administration since 2021, will leave the White House to join Kamala Harris’s 2024 presidential campaign. Before his role in the Biden administration, Sperling was a board member of Ripple Labs (COIN:XRPUSD) and served as an economic advisor under Presidents Bill Clinton and Barack Obama. The move is part of a series of personnel shifts aimed at strengthening Harris’s campaign.
The value of machine data and the future of Web3
Machine data, though valuable, is largely underutilized. Blockchain-based DePIN (Decentralized Physical Infrastructure) technology allows for the tokenization of this data, transforming physical assets into digital tokens that can be securely and transparently traded and used. This opens new opportunities for monetization and investment, improves AI with high-quality data, and enhances data security. Despite technical challenges, DePIN promises significant changes for more efficient and decentralized systems.