Crypto adoption takes center stage in US polls

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The crypto market witnessed considerable volatility, driven by presidential candidate Trump’s proposal to designate Bitcoin as a strategic asset for the United States. The unprecedented support for the crypto is fueling the market, sending Bitcoin prices above the $69k mark.

Another major development in the week that went by was the commencement of Ether ETF trading in the US. Closer home, the city of Raipur has started putting real estate records on the blockchain, marking a major milestone in the adoption of blockchain technology in India. 

The past week saw several major crypto developments across the globe. Dig in to know more about the changes in the global crypto landscape and how they can impact crypto prices.

It was a monumental week for crypto as the largest crypto assets, BTC and ETH, witnessed major long-term positive developments. For BTC, it was the major Republican push for adoption during the Bitcoin Conference in Nashville, where former President Trump announced his resolve to strengthen the crypto industry in the US if re-elected in November. Fellow party Senator Lummis suggested acquiring 1 million BTC over 5 years as a strategic reserve asset for the US Treasury. 

Ethereum too passed a major milestone last week, as all approved spot ETH ETFs began trading last week, with a hefty $1bn plus in trading volume for the first two days. However, the impact of the two events has been widely different, in terms of impact on prices. 

The Bitcoin Conference saw some bold long-term price predictions along with major declarations like Cantor Fitzgerald starting a $2bn BTC lending business; but the price impact was mostly on the back of a possible US government allocation, sending BTC prices above $69k again. 

Meanwhile, the spot ETH ETFs had a similar impact on ETH prices as BTC spot ETFs did after their launch; as the Grayscale Trust conversion resulted in massive outflows, overpowering the strong inflows seen with the new launches. ETH prices have remained weak and were down 5% during the week, trading around the $3.3k level. 

Overall, the broader crypto markets are witnessing a strong trend of capital churn back into BTC, resulting in a sell-off in the altcoin space and bringing total market capitalization just below the $2.6trn mark. 

Two other major macro developments need to be highlighted, which hurt crypto as an asset class. First was the stronger-than-expected GDP growth in the US, which suggests that the Fed might keep interest rates higher for longer to cool down the economy and inflation. Second, was a shock reduction in interest rates by the Chinese Central Bank as the world's second-largest economy struggles to grow. This further strengthened the US dollar as the global reserve asset for investors, which resulted in BTC (and other commodity) prices softening in comparison. These two macro indicators will continue to impact crypto prices in the short term.

In the broader altcoin universe, there was a general rotation of capital back into the "safer" asset BTC which outperformed most tokens in price returns, as they traded lower. However, there were some outliers strongly trading the green on the back of token-specific triggers. 

Solana's SOL continues its strong upward trend on the back of increasing network activity and surpassed BNB to become the 4th largest crypto asset by market cap. Solana's biggest DEX aggregator Jupiter announced re-staking and JUP jumped almost 15% higher during the week. AAVE was another positive outlier as its governance forum started discussions around opening the fee tap for token holders. With the clear classification as a commodity and the possible launch of spot ETFs, Bitcoin's hard forks Bitcoin Cash's BCH, and Bitcoin SV's BSV tokens jumped over 15%. 

On the flip side several tokens fell sharply in price, leading the pack was Avalanche's AVAX, falling 10%, as it saw a high-level exit from its foundation, Ava Labs. Compound's COMP token took a heavy beating after a Governance attack on the protocol resulted in a $24mm gain for a COMP whale.

AI plus crypto-themed tokens also came under some selling pressure, after they saw profit booking from investors rotating into blue-chip tokens, which resulted in a fall in prices of NEAR, FET, TAO, and RNDR. 

High volatility meme coin universe also came under selling pressure and FLOKI, WIF, BONK, DOGE, and SHIB all traded in the red. Celestia's TIA came under strong selling pressure and fell by 20% in price last week, as the High FDV Low Float token comes unlock pressure and also witnessed the launch of its newest competitor Avail's token, further heating the Data Availability space.

• BTC $69,586 ⏫ 3.50%

• SOL $191.65 ⏫ 7.70%

• AVAX $28.67 ⏬ 10.05%

• TIA $5.76 ⏬ 20.77%

(All data here is as of 2.50 p.m., 29 July 2024)

Before we conclude, here’s a quick look at some important news from around the crypto world.

• US regulators have given final approval for spot exchange-traded funds that hold Ethereum’s ether (ETH), giving Americans access to a second major cryptocurrency via the easy-to-trade vehicles. Read more here. 

• Raipur, the capital of Chhattisgarh, has started bringing its real estate records onto the blockchain with the help of Airchains, which builds blockchain-based bespoke privacy models through its use of zero-knowledge fully homomorphic encryption (zk-FHE). The Raipur Municipal Corporation administers the area issuing more than 8,000 building permits, work orders, and colony development permissions annually. Read more here.

That’s it for now. Thanks for sticking around.

See you later, folks! 👋

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