It was a big week for the crypto market. Here are the highlights:
Fed Cuts Rates by 50 BPS
The Fed decided to go with a 50 BPS rate cut instead of a 25 BPS cut, surprising many. Most investors seem to view this as bullish, although there may be some short-term volatility. The cut signifies the Fed's move toward an easy money cycle, where capital becomes cheaper and the government will need to start printing more money to service the debt. This, coupled with the rise in global liquidity, bodes well for risk assets like crypto.
Some investors are concerned, however, as historically, when the Fed has cut rates, the markets have crashed, as seen in 2000 and 2007. However, one could argue that the crash has already occurred, given the mini crash in early August due to the Japanese Yen carry trade situation—a black swan event that no one saw coming. Time will tell how this plays out, but we saw in March 2020 that when markets crashed, the Fed stepped in with rate cuts and record-breaking money printing to save the markets.
Donald Trump Pays with Bitcoin
Donald Trump stopped by PubKey, a pro-Bitcoin bar in NYC, where he made a purchase and paid with Bitcoin. This is significant, as it marks a former president and current presidential candidate using crypto for payments.
In addition, the state of Louisiana became the first in the nation to accept Bitcoin via the Lightning Network. The Louisiana Treasurer proudly announced the payment and highlighted the state's ability to accept both Bitcoin and USD stablecoins.
SEC Actions and Hearing
There was a lot of dialogue and activity around the SEC and crypto this week.
Congressmen Tom Emmer and Patrick McHenry sent a letter to SEC Chair Gary Gensler requesting clarity on crypto airdrops.
The House Financial Services Committee, with all its Republican members and some crypto-friendly Democrats, held a hearing entitled, "Dazed and Confused: Breaking Down the SEC’s Politicized Approach to Digital Assets." The major highlight came from former SEC Commissioner and current senior lawyer at Robinhood Markets, Daniel Gallagher. He rebuked the SEC, stating: "We have to look over our shoulder left and right because of this regulatory uncertainty," and added: "Ultimately, it will be up to Congress to rectify the commission's failure to act to register both tokens and platforms, and to provide clarity for those which do not require registration."
Next week, all five SEC commissioners—including Chair Gary Gensler—will face a full hearing before the House Financial Services Committee. Gary Gensler will also appear by himself in another hearing. Expect a lot of fireworks.
It's important to note that crypto legislation could be pushed through the Senate by the end of 2024. House Financial Services Committee Chair Patrick McHenry said on Tuesday that he believes his FIT21 bill could gain momentum during the lame-duck session. Senator Cynthia Lummis (R-Wyo.) also said she believes legislation can be pushed through during this period.
Stablecoin Launches
The stablecoin market is heating up as adoption continues to grow and new launches are on the horizon.
Blockchain-based stablecoins, pegged to fiat currencies like the U.S. dollar, are reaching a level of systemic importance, according to analysts at the research and brokerage firm Bernstein. "Stablecoin businesses remain highly profitable, with float income from U.S. Treasuries retained by issuers; for example, Tether made a net profit of $5.2 billion in the first half of 2024," they said. Monthly active users are hitting new highs of around 22 million, and total stablecoin wallets with non-zero balances currently stand at 120 million.
BitGo, a cryptocurrency custodian backed by banking giant Goldman Sachs, is entering the stablecoin industry by launching a new stablecoin pegged to the U.S. dollar, called USDS.
Revolut, a London-based fintech company that offers cryptocurrency trading, intends to issue its own stablecoin, according to four sources familiar with the plan.
Circle, the issuer of USDC, has made significant progress and expansions recently. Here are some highlights:
They are collaborating with Sony Block Solutions Labs to bring bridged USDC to Soneium via their Bridged USDC Standard.
USDC is now available in Brazil and Mexico via local bank transfers and real-time payment systems in Brazil (PIX) and Mexico (SPEI).
Native USDC and the Cross-Chain Transfer Protocol (CCTP) are expanding onto the SUI network.
Circle moved its global headquarters to NYC, building out a flagship space on one of the top floors of 1 World Trade Center. Many believe this is a strategic move as they prepare for an IPO.
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📰 Latest Crypto News:
MicroStrategy has bought more Bitcoin! They acquired 7,420 BTC.
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📈Crypto Market Metrics
Here are some key data points from Santiment
Top 10 Coins Trending via Social Media
Developer Activity
The top 10 coins with the most developer activity over the past 30 days
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📺 Recent Interviews
Brian from Santiment breaks down the Crypto metrics around Fed Rate Cuts impact on Bitcoin and Altcoins. He also provides Ethereum and SUI analysis.
Amanda Tuminelli of the DeFi Education Fund discusses the first ever Congress DeFi hearing and the SEC’s continued attack against crypto.
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-Tony