Key Points
- Markets anticipate a Federal Open Market Committee interest rate cut, but geopolitical tensions create investor fear.
- Despite Bitcoin’s dip, whales are buying and adopting a HODLing strategy, seeing the current market as an opportunity to go long.
The financial market is eagerly awaiting the Federal Open Market Committee’s decision on interest rate cuts, set to happen on 18th September. However, increasing geopolitical tensions in areas such as the Middle East and Africa are causing a wave of fear among investors.
In light of the U.S inflation easing, traders had hoped that Bitcoin would trade at a premium. To their surprise, the cryptocurrency lost its $60,000 psychological support and traded at a 3.10% discount at the time of writing.
A Silver Lining Emerges
Despite the dip, a report from August 2024 found that Bitcoin whales have been purchasing the dip and adopting a HODLing strategy. The number of whales, after falling to a low of 1,638, has been gradually increasing.
This suggests that large investors see the current market condition as an opportunity to invest for the long term. However, interest in trading Bitcoin declined in early August as retail investors favored altcoins over the king coin. This sentiment changed after 25 August, as active addresses saw a sharp increase.
Potential for a Bullish Reversal
21Shares’ Head of U.S Business Federico Brokate revealed that ETF inflows could be a turning point for Bitcoin’s price trajectory. He stated that long-term buyers haven’t started participating in BTC spot ETFs yet. Once pension funds and asset managers start allocating more money to risk-on assets, Bitcoin’s $100k goal could be achievable.
Despite the potential for future memecoin ETFs, Brokate emphasized the need for clear utility and value propositions in ETF product development.
Challenges for the Crypto Market
While on-chain indicators and the macroeconomic outlook seem to favor cryptocurrencies, incidents of hacks, thefts, and ransomware attacks are emerging as significant challenges for the crypto market. Crypto hackers made a dramatic comeback in 2024, stealing over $1.58 billion in digital assets through July.
A survey revealed that 78% of respondents considered Binance and Coinbase to be the most secure cryptocurrency exchanges. Over 43% prioritize hardware wallets for safeguarding their digital assets.
The comprehensive report also explores emerging trends like the surge in staking and restaking on Ethereum, and the growing popularity of memecoins on Solana. It also discusses factors that might help the NFT market recover.
