Is the crypto bear market finally over?
There’s never a dull moment onchain. Here’s what you need to know this week:
Bitcoin just had its biggest weekly rally since 2023. BTC surged from $64,000 to above $81,000, but what actually triggered the move?
Is the bear market finally over? 5 top market watchers weigh in. The answers range from "this is what bottoms look like" to "welcome to volatility season."
Tokenized stocks are booming. Why the market cap for onchain securities could grow to $5.5 trillion by 2030.
MARKET BYTES
BTC surges back in biggest weekly rally since 2023
When bitcoin originally launched into the battered global economy of 2009, it came with a clear narrative: as an alternative to fiat currencies that were losing value due to government borrowing and spending.
Last Wednesday, after months in the doldrums, crypto roared back on that original story. Faced with stubborn long-term bond yields that had risen to multidecade highs (more on what bond yields are and why they matter below) and a U.S. national debt that had spiked beyond $40 trillion, Treasury Secretary Scott Bessent announced a plan to ramp up the government’s ability to buy back bonds from $2 billion to $4 billion.
Crypto (and gold) reacted immediately, with billions of dollars in short BTC positions liquidated as prices spiked. Bitcoin raced from around $64,000 to more than $81,000 as of early Tuesday. ETH rallied from around $1,900 to over $2,500 in the same period. Institutional crypto appetite has also rebounded with nearly $2 billion in net inflows last week — and crypto-related stocks have also seen gains. Even legendary hedge fund manager Ray Dalio suggested that investors should hold some bitcoin in their portfolios.
“For the first time this year there is now a risk my end year forecast (of $100k) is too low,” noted Geoffrey Kendrick, global head of digital-assets research at Standard Chartered.
Here’s more news you should know about…
Spiking bond yields helped power crypto’s rebound
Last week, major long-term bond yields around the world surged to multidecade highs over a mix of fears, with some traders worried about inflation and spiraling government spending, others fearing the potential for the AI boom to overheat markets, and pretty much everyone concerned about the ongoing Iran conflict and oil prices.
Mortgage rates are influenced by bond yields and rising yields could eventually make it harder for governments to borrow money at a time when spending continues to soar. So why did crypto prices spike after Treasury Secretary Bessent intervened in an attempt to lower yields? The answer is something known as “the debasement trade.”
The typical thinking behind this trade is that "hard" assets like crypto and gold often rally when investors seek a hedge against a devaluing dollar and soaring national debt. When Bessent took the rare step of doubling the government's bond buyback program to $4 billion, those concerns only grew.
Flashing signal… “The size of the Treasury purchases announced so far by Bessent are trivial in comparison to the size of the overall market, but the [signaling] effect was very powerful,” Stephen Coltman, head of macro at 21Shares, told CNBC.
Tokenized stocks could grow into $5.5 trillion market One of the the biggest storylines on Wall Street in the last year has been the rapid rise in the tokenization of almost every kind of asset — allowing markets to move more quickly, cheaply, and around the clock.
Earlier this month, more than 40 firms, including JPMorgan Chase, Goldman Sachs, Invesco, and Citadel Securities, successfully tested the tokenized trading of stocks, treasuries, and other assets during part of a real trading day. And according to a recent report from a16z crypto, the market cap of tokenized stocks is up more than 400% — to $1.7 billion at the end of June compared to $329 million a year earlier.
This week, Coinbase announced that eligible non-U.S. traders can now access tokenized stocks issued on the Base blockchain, beginning with Apple (AAPL), Nvidia (NVDA), Meta (META), and Alphabet (GOOGL) — with more on the way. “Investors can hold the tokens in self-custody wallets and trade them around the clock on supported onchain venues, including decentralized exchange Aerodrome,” reports CoinDesk. “Because they are blockchain-based tokens, they can also plug into decentralized finance applications, potentially allowing investors to borrow against their stocks or use them in other onchain markets.”
Token effort… How big could the tokenized stock market become? According to a report from Citi, the market cap for tokenized securities could grow to $5.5 trillion by 2030. “You’re seeing the full weight of American financial power and the global reserve currency moving onchain at scale,” the report says. “When DTCC and the NYSE embed tokenization into capital markets, this marks a tipping point.”
EXPERT TAKES
Is a new bull market here? 5 top market watchers weigh in
Bitcoin and Ethereum just had their biggest week in years. As crypto investor sentiment reaches its highest levels in a year, market watchers are obsessing over one question: Is the bear market over? Here’s what five experts had to say.
1. "This is generally what bottoms look like…They begin with a short squeeze, a giant green candle, start breaking above technical levels, and suddenly everyone with limit orders waiting for BTC to drop to $40,000 are now rethinking their strategy, telling themselves: “I better get on board before I miss the boat.” — Mati Greenspan, founder at Quantum Economics.
Citing growing support for the crypto industry from the White House, Congress, and U.S. regulators, Greenspan said that the current price action feels similar to past bitcoin breakouts. And while he said a pullback is “possible,” he said the odds of a significant pullback look “very slim right now.”
2. "The strength of the move… seems to hint at a radical trend change, from the boring accumulation to an 'up' market”--- Justin d'Anethan, head of research at Arctic Digital
After near-record low levels of volatility, Bitcoin’s aggressive upward move in price is a sign of a clear shift in the market’s direction. d’Anethan cited the “engulfing candles” on bitcoin’s daily, weekly, and monthly charts. Engulfing candles are green candles on an asset’s chart that entirely erase the prior week, day, or month’s red candle. Often, such chart patterns indicate market bottoms. Additionally, the U.S. Treasury stepping in to attempt to lower bond yields through buybacks is seen as bullish for risk assets, he added.
3. “Welcome to volatility season. Bitcoin's bounce may be a gift to sell." — Mike McGlone, Bloomberg Intelligence senior commodity strategist.
McGlone, a longtime bitcoin bear, expressed doubt that the biggest weekly gain since 2023 was indicative of a new trend. Instead, he says, asset classes of all kinds will struggle amid rising yields for 30-year U.S. Treasury bonds. Sustained high yields, McGlone says, “may signal game over for the historic rallies in cryptos, precious metals and, most importantly, the US stock market.”
4. "I'd presume a bull market only after we sustain $100,000 for a month and the Fed signals rate cuts, which are still uncertain," – Jeff Mei, COO of BTSE.
Bitcoin’s big move significantly boosted investor sentiment, bringing the Crypto Fear & Greed Index into “Extreme Greed” this week. Still, Mei believes it’s too soon to declare a new bull market. He argues that $100,000 remains a key psychological level for investors and that persistent inflation could force the Federal Reserve to raise rates this year, which could be a headwind for crypto.
5. "11 of 13 times BTCUSD reclaimed the 50w MA during completed bear markets, the bear-market low was in. — Galaxy Research
Bitcoin’s surge over the past week has brought it right up against price levels that, if breached, could confirm the next stages of the bull market, the fund manager’s report argues. Analysts often watch bitcoin’s moving averages, with the 50-week, 100-week, and 200-week averages seen as the most significant. While BTC has already passed through its moving averages on the daily chart, Galaxy says there’s one final test — the 50-week moving average on the weekly chart. Currency sitting at around $82,000, Galaxy’s analysts believe a weekly close above that price level would signal the end of the bear market.
NUMBERS
$44.3 billion
The daily trading volume on centralized exchanges as of August 25, based on a 7-day moving average. After sitting near 12-month lows, last week’s surge in BTC and ETH has more than doubled the daily volume on centralized exchanges, up from $18.1 billion at the end of July.
502 million
The approximate number of transactions logged on the testnet of Circle’s stablecoin-focused blockchain, Arc, as of last week. Set to launch publicly on Sept. 16, Arc will feature more than 100 launch partners, and nearly a dozen founding validators, including BlackRock, the DTCC, Visa, Mastercard, and MoneyGram.
$75,385
Average price that Strategy paid for its 840,447 BTC, worth around $65 billion, meaning that it is back in the green for the first time since July. The crypto treasury giant still hasn’t resumed buying bitcoin (which makes the current rally all the more impressive, according to some analysts).
69%
Odds that the Federal Reserve will keep interest rates at current levels at September’s meeting, according to prediction market traders as of Wednesday. For clues, all eyes will be on Fed Chair Kevin Warsh’s remarks at the Jackson Hole conference later this week.
TOKEN TRIVIA
What is the "debasement trade" ?
A
Selling crypto to buy government bonds
B
Buying "hard" assets like crypto and gold as a hedge against a devaluing dollar
C
Trading one stablecoin for another to earn yield
D
Borrowing dollars to short bitcoin
ค้นหาคำตอบด้านล่าง
เกร็ดเล็กเกร็ดน้อย
B
Buying "hard" assets like crypto and gold as a hedge against a devaluing dollar
Coinbase Bytes
Your weekly digest of crypto news
Learn how we collect your information by visiting our Privacy Policy
