Weathering Crypto Downturns
Rebound Following The Steepest Selloff In Two Years
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This week, we explore the ongoing developments in the cryptocurrency market, focusing on the resilience demonstrated by assets like TON and the ETF market amid recent volatility. We also examine the U.S. government’s strategic handling of Silk Road Bitcoin assets and its partnership with Coinbase Prime.
Network Fees — Sum of total fees spent to use a particular blockchain. This tracks the willingness to spend and demand to use Bitcoin or Ether
- Bitcoin fees reached a yearly low for the third consecutive week, as markets continue to stabilize following last week’s downturns.
Exchanges Netflows — The net amount of inflows minus outflows of a specific crypto-asset going in/out of centralized exchanges
- Bitcoin recorded modest net flows of $418 million, including those from the U.S. government to Coinbase Prime.
Weathering Crypto Downturns
This week, the cryptocurrency markets saw a rebound following their steepest selloff in two years. After last week’s selloff, Bitcoin revisited the $60K mark, bouncing back by more than 20%, with its price briefly exceeding $61,000 on Tuesday, following a dip to nearly $49,000 the previous week. Some analysts foresee heightened volatility in the coming weeks, driven by the latest inflation data — showing the lowest reading since March 2021 — and potential updates from the Jackson Hole Economic Symposium, the annual U.S. monetary policy conference.
54% 30-day volatility rate — Bitcoin experienced its highest market volatility since March 2023.
- Despite the dip in prices, Bitcoin ETF investment products saw inflows of approximately $13 million during last week.
- During the most severe days of the selloff, outflows from crypto ETFs represented less than half a percent of the total assets under management.
- According to Bloomberg ETF analyst Eric Balchunas, this was a significant indication of investor confidence.
- Spot Ethereum ETFs recorded greater inflows, with BlackRock’s ETF attracting $188 million and Fidelity’s adding $44.3 million.
TON has risen 6% in the past 7 days, while BTC and ETH have declined by 4.5% and 1%, respectively.
- The Open Network (TON), Telegram’s blockchain, has shown greater resilience than most cryptocurrencies during last week’s price decline.
- This reflects investor confidence in the emerging project, which has been widely praised for its enormous growth potential.
- Most recently, the blockchain announced the launch of its own venture fund, committing $40 million to invest in consumer apps.
U.S. government addresses Moves $600M of Silk Road Bitcoin to Coinbase Prime
- While deposits to an exchange usually suggest an intent to sell, this transfer may have been done for custody reasons instead.
- Last month, the U.S. Marshals Service, a branch of the Department of Justice (DOJ), revealed a partnership with Coinbase Prime to manage and trade large-cap digital assets.
- The last confirmed sale of Silk Road assets by the government was in March 2023, when 9,861 coins were sold for $216 million. U.S. government-linked wallets currently hold about $12 billion in BTC.
In conclusion, this week showcased the resilience of various sectors within the current market. Additionally, we explored the U.S. government’s management of Silk Road Bitcoin assets and its strategic partnership with Coinbase Prime. Together, these discussions emphasize the ongoing evolution and complexity of the cryptocurrency landscape.
