Crypto Market Recap: August 2024
August was a rough month for crypto, with **Bitcoin (BTC)**, **Ethereum (ETH)**, and **Solana (SOL)** all taking significant hits amid rising market volatility. The yen carry trade implosion created a risk-off environment, pushing BTC down to $49,000 and ETH to $2,100 on August 5th. While BTC has since recovered to around $58,000, ETH is still struggling around $2,500. The increased volatility is reflected in Bitcoin’s 30-day volatility increasing by 48% and Ethereum’s by 52%.
The Impact of Regulatory Actions
The regulatory landscape continues to be a major factor affecting the crypto market. The SEC issued a Wells Notice to OpenSea, claiming the NFT marketplace is an unregistered broker. This signals that the SEC is actively pursuing regulation of the crypto space, and it’s likely that similar actions will continue in the near future.
Blockchain Usage
Daily active users, fees generated, and DEX volumes all declined in August, suggesting that blockchain usage is taking a hit. The German and US governments transferring a combined 124,000 Bitcoin to exchanges for sale also had an impact on the market.
Notable Developments
Despite the overall downturn, there were some notable developments in the crypto space. Bitgo announced a partnership with Justin Sun, moving custody of Wrapped Bitcoin (WBTC) to three Asian countries, but this move was met with skepticism. MakerDAO responded by banning WBTC as collateral for creating DAI, and Coinbase announced its own wrapped version of Bitcoin, wbBTC.
Ethereum’s Struggles
Ethereum has been lagging behind other major Layer-1 projects. Since the beginning of the bull market in November 2023, ETH ranks 13th with a yearly return of 62%, significantly lower than Bitcoin’s 138% and Solana’s 624%. Several factors are contributing to ETH’s underperformance, including declining revenues and the impact of Layer-2 solutions.
Looking Ahead
The crypto market is expected to remain volatile. The ongoing regulatory actions and macroeconomic factors are likely to continue to influence market dynamics. While some platforms are facing challenges, others are innovating and expanding. The future of crypto will be shaped by these developments and how they play out in the coming months.
