Cryptocurrency market update - What's happening on the crypto market?

The crypto markets are always in flux but this month has been particularly eventful. There were a number of positive steps taken by Australia toward adoption, but prices continued to bounce up and down as investors try to figure out where the best opportunities lie. So what’s been happening in the crypto world this month? Let’s take a look.

Cryptocurrency news

Australia continues to adopt cryptocurrency

Australia is proving to be a leader in the adoption of cryptocurrency and blockchain technology. The Treasury department has recently announced a Token Mapping exercise, the RBA announced plans to launch a limited-scale Central Bank Digital Currency (CBDC) pilot and Australia ranked #1 on a global index for our interest in crypto.

While cryptocurrency and blockchain are still relatively new technologies, it’s clear Australia is taking a proactive approach to investigating the opportunities that these technologies present. The Token Mapping exercise should help to create a clearer picture of the blockchain ecosystem in Australia, while the proposed CBDC will explore the use cases and potential economic benefits of CBDCs. These initiatives will likely help position Australia at the forefront of the global crypto economy.

Global financial markets take a hit, along with crypto

The US Federal Reserve has been gradually raising interest rates over the past few months which has had a ripple effect on stock markets around the world – and crypto.

Higher interest rates make borrowing money more expensive, which can lead to lower profits for companies that have taken out loans to finance their operations. This can cause stock prices to fall, as investors become concerned about the future prospects of these companies.

Recently however, there has been evidence that this same phenomenon is also impacting the crypto markets. Researchers have found that when the Fed raises rates and causes stock markets to fall, so does the price of Bitcoin. This suggests that there is a strong correlation between the two markets and that the Fed’s actions can have a significant impact on the crypto markets just as they do on traditional markets. As the Fed continues to raise rates, it will be interesting to see how this affects the prices of Bitcoin and whether this correlation continues.

More regulation presenting challenges and opportunities

In recent years, there has been a growing push for more regulation of the cryptocurrency market. While some see this as a necessary step to protect investors, others worry that it will stifle innovation.

There is no denying that more regulation will change the landscape of the market, but it is difficult to say how exactly these changes will play out. One thing is certain: both challenges and opportunities will present themselves.

For example, a sanction was placed against crypto-mixing service, Tornado Cash, in the US recently. The service was banned as a matter of national security as hackers had allegedly used the service to launder stolen funds. On one hand, these sanctions will make it harder for bad actors around the globe to operate. However, on the other hand, the new sanctions mean anyone who comes into contact with that money could be penalised, which could make it incredibly challenging for validators on staking networks who may get paid with funds associated with Tornado Cash.

Institutional investment continues

Earlier this month, Blackrock, the world’s largest asset manager, announced it will join competitor Grayscale in adding a bitcoin trust offering for US institutional clients. Blackrock’s decision is a significant endorsement of cryptocurrency and could pave the way for more mainstream adoption. While there are still many hurdles to overcome, including regulatory uncertainty and volatility, the entry of such a major player into the space is a bullish sign for the future of cryptocurrency.

Coin movements in the last 30 days*

Biggest gainers
1. Chilliz CHZ (67.61%)
2. Nexo NEXO (33.10%)
3. Ankr ANKR (22.01%)

Biggest losers
1. Helium HNT (-35.56%)
2. Bitcoin Gold BTG (-30.72%)
3. Uniswap UNI (-29.38%)

*Figures correct as of 30/08/22

Crypto trends

Ethereum – the merge….

The long-awaited Ethereum merge is scheduled for September. The upgrade will see the network move from proof-of-work to proof-of-stake, which many in the community have been eagerly awaiting. Rumours of the impending merge had Ethereum’s price seeing some momentum early in the month. However, as the date draws nearer, some are beginning to worry that the merge may not go as smoothly as planned.

There are a lot of moving parts to the Ethereum network, and any disruption could cause serious problems. Nevertheless, the community remains optimistic and is looking forward to seeing the upgrade finally take place.

Brands jump in on NFTs

NFTs (Non-Fungible Tokens) have exploded in popularity in the last year, with projects like CryptoPunks making it to the list of the most expensive NFTs ever sold. And it’s not only artists who have embraced technology; brands have as well!

Nike has amassed nearly US$1.3 billion in transaction volume from secondary trading of its NFTs, in addition to US$93 million in primary sales and US$92 million in royalties, according to data compiled on Dune Analytics.

So despite the current volatility in the crypto markets, it’s clear that governments and institutions are continuing to support and adopt blockchain technology. This provides a strong foundation for the long-term growth of cryptocurrencies. Additionally, there are strategies investors can implement during bear times that will allow them to stay in the market for the long haul. In all markets, there is always another day.

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