Bitcoin

El Salvador’s Bitcoin Experiment

In 2021, El Salvador became the first country in the world to make Bitcoin legal tender. This bold move by President Nayib Bukele aimed to transform the country’s economy and put it on the map. Since then, the small Central American nation has been a global focus, with many wondering if this experiment with cryptocurrency would pay off.

President Bukele has now called this experiment a “resounding success,” saying it has brought “nothing but benefits” to El Salvador. But what does that really mean for the country and its people? In this article, we’ll explore the outcomes of this unique approach to using Bitcoin and how it has impacted El Salvador.

Bitcoin as Legal Tender in El Salvador

When El Salvador made Bitcoin legal tender, it was a groundbreaking decision. Bitcoin, a type of cryptocurrency, was now officially accepted as money alongside the US dollar, which had been the country’s official currency since 2001. This meant that Salvadorans could use Bitcoin to pay for goods and services everywhere—from buying a burger at McDonald’s to booking a room at a local hotel.

President Bukele believed that making Bitcoin legal tender would bring several advantages. He thought it would help citizens who don’t have access to traditional banking services and make transactions faster and cheaper. He also saw it as a way to attract tourists and investors to the country, boosting the economy.

How Bitcoin Adoption Has Played Out

Three years after this bold move, President Bukele reflected on the Bitcoin experiment. He claimed that “the positive outcomes outweigh the negative,” even though the path has not been smooth. According to him, many Salvadorans have embraced Bitcoin, using it for various transactions. However, Bukele admitted that Bitcoin hasn’t been adopted as widely as he hoped.

Recent studies show that only 12% of Salvadorans used Bitcoin in the last year, down from 21% in 2022. This decline suggests that while some people are using the cryptocurrency, it has not become a mainstream choice for most Salvadorans. President Bukele remains optimistic, though, stating that those who have used Bitcoin have benefited, especially from its rise in value.

Challenges Facing Bitcoin in El Salvador

Despite President Bukele’s positive outlook, the adoption of Bitcoin in El Salvador has faced significant challenges. One of the biggest hurdles is the lack of trust and understanding of the technology among the general population. Bitcoin is still new to many people, and its value can be very unpredictable. This volatility has made some Salvadorans wary of using it for their daily transactions.

Another major challenge is the technical and infrastructure issues that have come with using Bitcoin. Although the government rolled out a national digital wallet called “Chivo” to make Bitcoin transactions easier, there have been many reports of bugs, system failures, and even cases of fraud. These issues have led some users to abandon the cryptocurrency altogether, further slowing its adoption.

Bitcoin’s Impact on El Salvador’s Economy

One of the main goals of adopting Bitcoin was to improve El Salvador’s economy. However, surveys show that fewer than 1% of Salvadorans believe Bitcoin has actually improved the country’s economic situation. This statistic highlights the gap between the government’s vision and the reality experienced by many citizens.

While some people have used Bitcoin to buy everyday items like clothes, food, and electricity, many others have stuck with the US dollar. The lack of widespread trust in Bitcoin, along with the ongoing technical challenges, has limited its impact on the economy. Instead of becoming a key player in daily financial activities, Bitcoin remains more of a novelty for most Salvadorans.

The Benefits Bukele Sees in Bitcoin

Despite the challenges, President Bukele remains a strong advocate for Bitcoin. He argues that the problems are “relatively minor” compared to the benefits the cryptocurrency has brought to the country. According to Bukele, Bitcoin has given El Salvador international branding that it never had before. The country has attracted significant global attention, which has led to an increase in tourism and investment.

Tourism has reportedly grown since the introduction of Bitcoin, with many people visiting El Salvador to see how the first country to adopt Bitcoin as legal tender is faring. Investors interested in the future of cryptocurrency have also taken an interest in the country, bringing in new business opportunities.

Why Bitcoin Adoption Remains Voluntary

One important point President Bukele emphasized is that Bitcoin adoption in El Salvador is entirely voluntary. He stated that no one is forced to use Bitcoin; it’s simply an option for those who are interested. This approach has allowed people to explore the use of Bitcoin without feeling pressured, which Bukele believes is crucial for its long-term success.

While many Salvadorans have not embraced Bitcoin, those who have are likely doing so because they see potential benefits, such as the possibility of Bitcoin’s value increasing over time. Bukele hopes that, as more people understand and trust the technology, adoption will grow.

The Future of Bitcoin in El Salvador

As El Salvador continues its experiment with Bitcoin, the future remains uncertain. President Bukele’s vision of a country where Bitcoin is widely used hasn’t yet come to fruition, but the experiment is still in its early stages. The decline in adoption rates suggests that the government will need to address the technical and educational challenges to make Bitcoin a more viable option for everyday use.

For now, Bitcoin has not drastically changed El Salvador’s economy, but it has certainly put the country on the global map. Whether it will become a lasting part of the nation’s financial system or fade into the background remains to be seen. What is clear is that El Salvador’s experiment with Bitcoin will continue to be watched closely by the rest of the world, as other countries consider whether to follow its lead.

Bitcoin Funds Drop as Investors Bet on Price Decline

In September, investors are increasingly betting that the price of Bitcoin will go down. Last week, many people quickly pulled their money out of Bitcoin exchange-traded funds (ETFs). These funds are managed by well-known companies like Fidelity, ARK Invest, and others on Wall Street, who offer ways to invest in Bitcoin.

Investors Pull $320 Million Out of Bitcoin Funds

According to a report by CoinShares, a company that manages assets, a total of $320 million was taken out of Bitcoin funds last week. This happened as more people started betting that Bitcoin’s price would drop. These bets are made using “short Bitcoin investment products,” which are tools that allow investors to profit if the price of Bitcoin goes down. In fact, $4.4 million was put into these short Bitcoin products, the highest amount since March.

BlackRock Stands Out with Positive Inflows

While most funds saw people taking their money out, BlackRock, the largest asset manager in the world, did not follow this trend. Instead, it saw more than $219 million flow into its iShares Bitcoin ETF during the same period. This made BlackRock the only major fund manager to gain more money, showing that some investors still believe in Bitcoin’s potential.

Why Are Investors Pulling Out?

CoinShares, which also lost $4 million from its Bitcoin funds last week, believes that this shift in investor behavior is due to strong economic data from the U.S. The report suggests that the better-than-expected economic performance has reduced the chances of the Federal Reserve cutting interest rates by 50 basis points. This is important because interest rates can have a big impact on investments like Bitcoin.

How Interest Rates Affect Bitcoin and Other Cryptocurrencies

Interest rates are crucial for Bitcoin and other cryptocurrencies. When interest rates are high, it makes riskier investments like Bitcoin less attractive because investors can earn safer returns by holding cash in high-interest accounts. This is why Bitcoin and other digital assets, which are considered “risk-on” investments, become less appealing in a high-interest environment.

The Federal Reserve’s Role in Crypto Markets

Investors have been waiting for the Federal Reserve to lower interest rates since last year when the central bank raised them to the highest level in two decades. Many believe that a change in policy is coming soon. In August, Jerome Powell, the Chair of the Federal Reserve, hinted that interest rates might be lowered soon, which could impact the cryptocurrency market.

U.S. Economic Data and Its Impact on Markets

On Friday, the U.S. Commerce Department reported that the personal consumption expenditures price index—a key measure of inflation—increased by 0.2% over the last month and by 2.5% over the past year. This data was in line with what analysts expected. However, markets interpreted this information as a sign that the Federal Reserve is more likely to cut interest rates by a quarter percentage point rather than the more significant half-point cut.

Ethereum and Other Cryptocurrencies Also Affected

The trend of pulling money out of crypto funds was not limited to Bitcoin. CoinShares’ report also noted that investors in Europe were cashing out of cryptocurrency funds, including those that give exposure to Ethereum, the second-largest cryptocurrency by market cap. In total, $5.7 million was taken out of Ethereum investment products. This comes after the U.S. Securities and Exchange Commission approved Ethereum ETFs in May, which was expected to boost interest in the cryptocurrency.

Bitcoin’s Price Struggles

As of now, the price of Bitcoin stands at $58,622 per coin. This is after a 7% drop over the past seven days, according to data from CoinGecko. Bitcoin is currently 20% below its all-time high of $73,737, which it reached in March following the approval of Bitcoin ETFs in the U.S. market.

What Does This Mean for the Future?

The recent trend of pulling money out of Bitcoin and other crypto funds suggests that investors are nervous about the future of these digital assets. With strong economic data making an interest rate cut less likely, and with Bitcoin’s price continuing to struggle, many are wondering whether this is just a temporary dip or a sign of more significant problems ahead.

Bitcoin funds saw significant outflows last week as more investors bet on a price decline. Strong U.S. economic data has made it less likely that the Federal Reserve will cut interest rates significantly, which is causing some to shy away from riskier investments like Bitcoin. While BlackRock’s Bitcoin ETF bucked the trend with positive inflows, the overall sentiment in the market appears to be negative, with investors also pulling out of Ethereum and other cryptocurrency funds. As the market waits for further signals from the Federal Reserve, the future of Bitcoin and other digital assets remains uncertain.

Whales Hoarding Bitcoin: Big Wallets Hit 17-Month High

Bitcoin whales are on the move, buying more Bitcoin as smaller traders sell their holdings. A recent report shows that the number of Bitcoin wallets holding 100 or more BTC has reached a 17-month high. This is happening while retail traders are feeling the pressure from falling prices and selling off their Bitcoin. Let’s take a closer look at what’s going on.

Bitcoin Whales Are Buying Big

In the last month, the number of Bitcoin wallets with at least 100 BTC has surged. According to Blockchain analytics platform Santiment, 283 new wallets crossed the 100 Bitcoin mark in August. This brings the total number of these large wallets to 16,120, which is the highest number we’ve seen in the last 17 months.

Bitcoin whales, who are individuals or entities holding large amounts of Bitcoin, seem to be taking advantage of the current market conditions. As prices have dropped, these whales have been busy buying more Bitcoin. In fact, they’ve added over 133,000 BTC to their wallets in the past 30 days, which is worth more than $7.6 billion.

Why Are Smaller Traders Selling?

While whales are buying, smaller traders are selling. Adam Back, the CEO of Blockstream, noticed that since Bitcoin’s price fell from over $62,000 to around $58,000 at the end of August, whales have been on a buying spree. According to Back, these whales are buying about 450 BTC every minute.

Santiment suggests that smaller traders, sometimes called “sharks” when they hold at least 10 BTC, are feeling the pressure as prices drop. Many of them bought Bitcoin at higher prices, and now that the price is below their entry point, they’re selling to cut their losses. Crypto analyst Axel Adler Jr mentioned in a post on X (formerly known as Twitter) that if the current trend continues, we might see even more people selling their Bitcoin at a loss.

The Role of Market Sentiment

The Crypto Fear and Greed Index, which measures the sentiment of the crypto market, shows that many traders are feeling scared right now. In August, the index spent more days in the “Fear” zone than in the “Greed” zone, with an average rating of 37. This fear is likely driving some of the selling, as traders worry about further price drops.

Despite this, some experts believe that the increase in whale activity could be a good sign for the market. Vivek Sen, the founder of Bitgrow Lab, suggests that the fact that whales are buying might mean they see value in Bitcoin at these lower prices. This could be a positive sign for the market in the long run.

Bitcoin’s Performance in August

August was a tough month for Bitcoin. The price of BTC fell by 8.6%, ending the month at a fresh two-week low. This drop was worse than the average monthly performance, as Bitcoin typically gains about 1.75% in August. The data from CoinGlass also shows that September has historically been a challenging month for Bitcoin, with an average loss of 4.5%.

As September begins, traders are wondering if the so-called “September Effect” will impact Bitcoin this year. The September Effect is a term used in the stock market to describe the tendency for stocks to perform poorly in September. Bitcoin has shown a similar pattern, with September often being one of the worst months for BTC.

Will the September Effect Strike Again?

Since 2013, Bitcoin has only had three positive Septembers, with gains in 2015, 2016, and 2021. In most other years, the cryptocurrency has seen significant losses during this month. The worst September for Bitcoin was in 2014, when the price dropped by more than 19%.

Given this history, some traders are worried that Bitcoin might face another tough month. On-chain analyst Ali Martinez has pointed out that Bitcoin needs to break above $66,000 soon to avoid entering a prolonged bear market. If the price stays below this level, we could see further declines.

What Would Investors Do (Not investment advice)?

With so much uncertainty in the market, what should investors do? It’s important for investors to stay informed and follow their strategies carefully. The increase in whale activity suggests that some big players believe Bitcoin is undervalued at current prices. However, the historical data for September indicates that we could see more volatility in the coming weeks.

For those who are holding Bitcoin, it might be a good idea to keep an eye on the key price levels mentioned by analysts, such as the $66,000 mark. If Bitcoin can break above this level, it could signal a recovery. On the other hand, if the price continues to drop, we might see more selling from smaller traders, which could push the price even lower.

Bitcoin whales are hoarding more BTC as smaller traders sell off their holdings. This has led to a significant increase in the number of large Bitcoin wallets, reaching a 17-month high. While the market sentiment is currently fearful, and September has historically been a tough month for Bitcoin, the actions of whales suggest that they see value in the current market. Investors should remain cautious, stay informed, and be prepared for potential volatility in the coming weeks.

Disclaimer: None of this is investment advice in any shape or form.

What Are Bitcoin Diamond Hands?

In the world of cryptocurrency, “diamond hands” refers to investors who hold onto their Bitcoin no matter what happens in the market. These investors are strong and don’t sell their Bitcoin, even during major market crashes. Recently, data has shown that 32% of the total Bitcoin supply has not been moved in over five years. This means that a large number of Bitcoin investors have been holding their coins for a very long time, which is a sign of their strong belief in the cryptocurrency.

Understanding Dormant Bitcoin Supply

The Bitcoin supply that has not been moved for five or more years is often called the “dormant supply.” This supply is made up of coins that have been left untouched in wallets for at least five years. In simpler terms, these are the Bitcoins that have not been spent or transferred by their owners for a long time. This can happen for several reasons, such as the owner simply choosing not to sell or the keys to the wallet being lost, making it impossible to move the coins.

Bitcoin Long-Term Holders: The Resilient Investors

Investors who have held their Bitcoin for more than 155 days are known as long-term holders (LTHs). When these LTHs hold their coins for over five years, they are often referred to as the “diamond hands” of the Bitcoin market. These investors are considered the most resilient because the longer they hold their Bitcoin, the less likely they are to sell. This is important because it shows that a significant part of the Bitcoin supply is being held by people who believe in the long-term value of the cryptocurrency.

Why Bitcoin Supply Remains Dormant

There are several reasons why a large portion of Bitcoin’s supply remains dormant. One reason is that many long-term holders are committed to their investment and believe that the value of Bitcoin will continue to rise. Another reason is that some of the dormant supply may be lost forever. This could happen if the keys to access the Bitcoin wallet are forgotten or lost, making it impossible to move the coins. As Bitcoin ages, it becomes more likely that some of the supply is lost, but the remaining portion is held by investors with strong conviction.

The Impact of Dormant Bitcoin on the Market

The fact that 32% of the total Bitcoin supply has not been moved in over five years has significant implications for the market. When a large portion of the supply is held by long-term holders, it reduces the number of Bitcoins available for trading. This can affect the price of Bitcoin because the fewer Bitcoins that are available, the more valuable each one becomes. Additionally, the strong belief of these long-term holders can have a stabilizing effect on the market because they are less likely to sell during periods of high volatility.

Bitcoin HODLers and Market Trends

HODLers, or those who “Hold On for Dear Life,” are known for their commitment to holding onto their Bitcoin despite market fluctuations. The recent data shows that even though some long-term holders sold their Bitcoin earlier this year to take advantage of price rallies, the overall percentage of dormant Bitcoin has remained relatively stable. This suggests that most of these investors are still holding onto their coins, even after experiencing major market events like the COVID-19 crash, the 2021 bull market, and the 2022 bear market.

The Future of Dormant Bitcoin Supply

Looking forward, it’s unlikely that the majority of these diamond hands will sell their Bitcoin unless there are very special circumstances. The resilience of these investors is a strong indicator of their confidence in Bitcoin’s future. As the cryptocurrency market continues to evolve, the actions of these long-term holders will play a crucial role in determining the future value of Bitcoin.

Bitcoin Price and Market Behavior

Recently, Bitcoin’s price dropped by almost 4%, bringing it down to $59,100. However, this price movement does not seem to have shaken the confidence of long-term holders. The fact that 32% of the supply has remained dormant for over five years shows that these investors are not easily swayed by short-term market fluctuations. This stability is essential for the health of the overall cryptocurrency market.

Bitcoin diamond hands have proven their resilience by holding onto their coins for over five years. With 32% of the Bitcoin supply remaining dormant, these long-term holders continue to have a significant impact on the market. Whether through their strong conviction or lost access to wallets, these investors have shown that they are in it for the long haul. As a result, the future of Bitcoin is closely tied to the actions and beliefs of these diamond hands.

Crypto investors are facing a tough time, even as Bitcoin ETFs enjoy massive success. While Bitcoin is performing well, the broader crypto market is not. Investors are starting to feel disillusioned, questioning the future of crypto as demand for this young asset class seems to be fading.

Crypto Market Decline Despite Bull Market

In a typical bull market, we expect all crypto assets to rise. Bitcoin usually leads the way, followed by Ethereum (ETH) and other smaller coins. However, this time is different. Bitcoin has managed to reach new highs, thanks to the success of Bitcoin ETFs, but the rest of the crypto market is struggling.

In the last month, search interest in crypto has been low, and network activity has slowed down. Even worse, futures funding rates briefly went negative. Ether ETFs, which started trading recently, have already seen net outflows. Bitcoin ETFs, despite their success, have also experienced some net outflows.

Michael Rinko, an analyst at Delphi Digital, points out that although headlines make it seem like the crypto market is doing well, sentiment among investors is very low. “We didn’t get that everything rally that the market has been conditioned to expect from cycles past,” Rinko said. He highlighted that since April, Bitcoin is down 12%, while ETH and Solana have fallen by 29% and 27%, respectively.

The Struggle of Smaller Crypto Assets

The situation for smaller crypto assets is even worse. Binance Coin (BNB) has lost 10%, and Ripple’s XRP is down by 8%. Meanwhile, traditional assets like the S&P 500 have risen by 6%, and gold has gained 12% in the same period. This stark difference highlights the struggles within the crypto market.

According to Citi’s David Glass, crypto has broadly underperformed, especially on a volatility-adjusted basis. He also notes that outside of stablecoins, most crypto demand metrics have weakened. Stablecoins have been the one bright spot, with market caps continuing to grow even during the early August market correction.

The Importance of Bitcoin ETFs

Bitcoin ETFs have played a crucial role in Bitcoin’s recent success. These ETFs are among the most successful launches in history. BlackRock’s iShares Bitcoin Trust (IBIT) now manages $23 billion in assets. Despite this success, the broader crypto market is not benefiting as much. Many crypto-native investors don’t hold Bitcoin, so they don’t see the wealth effect when Bitcoin prices rise. Instead, they are waiting for a similar boost in ETH prices, which could have a more significant impact on the market.

Rinko points out that while Bitcoin’s success is impressive, it is somewhat isolated. The lack of interest in smaller networks and new projects is disappointing for many in the crypto community. Without new projects and innovations, the excitement that once drove the crypto market is fading.

Disillusionment in the Crypto Industry

The disillusionment among crypto investors is reaching new heights. The excitement that once surrounded the industry is disappearing, and many are questioning the future of crypto. In the past, bull markets were a time for new projects and innovations. Investors would fund these projects, hoping to discover the next big thing. But this time, that hasn’t happened.

Rinko explains that the narratives that once drove the crypto market are no longer inspiring investors. “DeFi is dead, NFTs are even more dead,” he says. Even meme coins, which once captured the imagination of many, now feel nihilistic. Without a new, exciting technology story, many investors are losing faith in the industry.

The Role of Stablecoins in the Current Market

While most of the crypto market is struggling, stablecoins are experiencing growth. The total market cap for stablecoins recently hit a 2022 high, showing that money is starting to flow back into crypto. This could be a sign of better times ahead, especially if the Federal Reserve begins cutting interest rates.

Lower interest rates could make crypto yields more competitive, encouraging more investors to return to the market. Rinko believes that the upcoming rate cuts could be a turning point for the crypto industry. “Higher rates mean stables face a higher hurdle rate for capital,” he explains. But with rate cuts on the horizon, crypto might once again become an attractive option for investors.

The Future of Bitcoin and Crypto

Bitcoin’s success, driven by ETFs, is undeniable. However, the broader crypto market is still facing significant challenges. The lack of new projects and innovations, combined with the struggles of smaller assets, has left many investors disillusioned.

But all hope is not lost. Stablecoins are showing signs of strength, and the potential for rate cuts could bring new life to the market. Additionally, Bitcoin whale holdings, which typically increase as Bitcoin prices rise, could also play a role in driving demand.

The crypto market may be down, but it’s not out. Investors are watching closely, hoping for a rebound. Whether it’s the success of Bitcoin ETFs, the growth of stablecoins, or the potential impact of lower interest rates, there are still opportunities for recovery. The key will be whether the market can recapture the excitement and innovation that once drove it forward.

Bitcoin’s Price May Stay Low in September Due to Mt. Gox and U.S. Government

Bitcoin’s slow price movement might continue into September. Two big factors could add nearly $15 billion worth of extra selling pressure: the U.S. government and the defunct crypto exchange, Mt. Gox. This additional pressure could push Bitcoin’s price down even further.

The Threat of Additional Bitcoin on the Market

Over $14.8 billion worth of Bitcoin could soon hit the market. The U.S. government holds more than 203,000 Bitcoin, which is valued at $12.1 billion. Meanwhile, Mt. Gox is set to distribute another 46,000 Bitcoin, worth about $2.7 billion. This could flood the market with extra Bitcoin, causing prices to drop.

Will Mt. Gox Repayments Impact the Market?

Mt. Gox is expected to release $2.7 billion worth of Bitcoin before the end of 2024. This distribution will happen on the Kraken exchange, but experts believe it won’t cause a major market disruption. According to a report from Kaiko, Kraken has handled large amounts of Bitcoin before, with only minor increases in slippage. This suggests that any selling pressure from Mt. Gox’s Bitcoin repayments is unlikely to affect the broader market.

Mt. Gox Creditors and Market Behavior

Mt. Gox creditors have been waiting for over 10 years to receive their Bitcoin, which has increased in value by 8,500%. Despite this huge price rise, most Mt. Gox creditors haven’t sold their Bitcoin yet. For example, at the end of July, Mt. Gox distributed nearly $4 billion worth of Bitcoin, which was about 41.5% of what is owed to users. However, most creditors chose to hold onto their Bitcoin rather than sell it.

Glassnode, a crypto analytics firm, reported that many creditors decided to receive their payments in Bitcoin instead of fiat currency. This was a new option under Japanese bankruptcy law. As a result, it’s likely that only a small portion of these distributed coins will be sold on the market. Furthermore, the spot cumulative volume delta (CVD), which measures the net difference between buying and selling on centralized exchanges, hasn’t shown a big increase in selling on Kraken after the Mt. Gox distribution.

Bitcoin’s Price Struggles Below $60,000

Bitcoin’s price has remained below the important $60,000 level after falling more than 10.7% in August. To finish the month in positive territory, Bitcoin would need to close above $64,300. However, analysts warn that the lack of liquidity, a common issue during the summer, could continue into September. This might make it difficult for Bitcoin to break through the $63,900 resistance level.

Since 2013, Bitcoin’s average returns in September have been negative, at around -4.78%. This trend doesn’t offer much hope for a strong price recovery next month.

Bitcoin’s Recent Decline During U.S. Trading Hours

Recently, Bitcoin has been trending lower during U.S. trading hours. On the east coast, the price dropped back to $58,000 just before noon. Currently, Bitcoin is at $58,200, down nearly 4.4% over the past 24 hours. While this is better than the broader market, where the CoinDesk 20 Index fell by 5.6%, it’s still a significant drop.

Other cryptocurrencies, including Ether (ETH), Chainlink (LINK), and Cardano (ADA), have also seen declines. Solana (SOL) had the worst day, with its price dropping by 9%. Over the past month, Bitcoin has fallen by more than 12%, undoing the gains made in July. Ether and Solana have both dropped by 25% in August.

“Buy Asia, Sell the U.S.”

A familiar pattern has emerged: Bitcoin tends to rise during Asian trading hours but falls during U.S. trading hours. As crypto analyst Miles Deutscher pointed out, “Asia bids, America dumps.” Over the past two weeks, Bitcoin has gained over 5% during Asian trading hours but has shown negative returns during U.S. trading hours.

Possible Trend Changes Ahead

Despite positive factors like growing institutional adoption, a potentially friendlier regulatory environment, and upcoming Federal Reserve rate cuts, Bitcoin’s price is still down more than 20% from its all-time high of $73,500, reached over five months ago.

Bulls may find it hard to imagine what could turn around the current price action. However, things might get interesting when the U.S. returns from the Labor Day holiday. A new wave of economic reports could change the overall market picture.

Economic Data and Market Expectations

Next week, all eyes will be on the Nonfarm Payrolls Report for August, which will be released on Friday, September 6. The jobs report for July was weak and was likely a key reason why the Federal Reserve promised a rate cut in September. Right now, the market expects only a small 25 basis point cut in mid-September. However, if the August jobs report is also weak, investors might start expecting a larger 50 basis point cut. This could give a strong positive boost to risk markets, including Bitcoin.

On the other hand, if the September jobs report is strong, it might reduce the market’s hopes for easier monetary policy. Either way, we can expect some volatility ahead. There’s about a 50% chance that this volatility could be positive, which is about all that bulls can hope for at this point.

Nayib Bukele: The Story of El Salvador’s President

Before he became one of the world’s most popular leaders, Nayib Bukele was in the advertising business. Now, as the President of El Salvador, Bukele is known for branding himself as the “world’s coolest dictator” and a “philosopher king.” However, more than anything, he is a former publicist who understands the power of image, both his own and that of his country.

The Rise of Nayib Bukele

In June, at his presidential office in San Salvador, Bukele granted his first interview to a foreign journalist in three years. He was dressed in black, and as he spoke, colorful peacocks wandered outside. “A leader should be a philosopher before he is a king,” Bukele said, reclining in his chair.

Bukele has made a name for himself by transforming El Salvador. At just 43 years old, he has turned a country once known as the world’s murder capital into a nation safer than Canada, according to Salvadoran government data. His mano dura (iron fist) policy has led to an aggressive crackdown on gangs, resulting in the arrest of 81,000 people and a significant drop in homicides. Today, Salvadorans can freely move through areas once controlled by gangs, enjoying parks and nightlife.

El Salvador now promotes itself as the “land of surf, volcanoes, and coffee,” hosting events like the Miss Universe pageant and attracting tourists and cryptocurrency enthusiasts to coastal spots like Bitcoin Beach. Bukele’s transformation of the country helped him easily win re-election, and his approval ratings currently top 90%, according to a CID Gallup poll.

Bukele’s Controversial Rule

Despite his popularity, Bukele has faced criticism for his defiance of constitutional and legal limits. Since 2022, he has ruled under emergency powers that suspend key civil liberties, including due process. His security regime allows arrests without warrants, even for minors as young as 12, and mass trials for suspects. Today, one in every 57 Salvadorans is incarcerated, giving El Salvador the highest incarceration rate in the world, even higher than the United States.

Bukele’s government has also removed top judges and replaced them with loyalists, which allowed him to bypass a constitutional ban and successfully run for a second term. His administration has been accused of human rights abuses, including arbitrary detentions, forced disappearances, and torture. Yet, Bukele brushes off these criticisms, claiming they are a small price to pay for the safety of the nation’s 6 million people.

The Bukele Miracle and Its Impact

Many people in El Salvador see Bukele as a visionary leader who has brought security and stability to a once-dangerous country. His methods have made him a role model for other leaders in Latin America, who are eager to replicate what they call “el milagro Bukele”—the Bukele miracle. However, there are concerns about the long-term sustainability of his policies.

While most Salvadorans are satisfied with the current state of the country’s democracy, 61% say they fear speaking out about its problems, according to a survey by Latinobarometro. Critics argue that Bukele is a social-media-savvy strongman who knows how to manipulate public opinion. They also worry that his focus on security may shift as economic challenges, such as poverty and foreign investment, become more pressing.

Bukele’s Journey to the Presidency

Nayib Bukele was born in San Salvador and grew up as one of ten children in a wealthy family. His father, Armando Bukele Kattán, was a successful businessman and imam of Palestinian descent. Bukele attended a private school and was shielded from the civil war that ravaged El Salvador in the 1980s.

Bukele briefly attended college to become a lawyer but dropped out to run a nightclub, a Yamaha dealership, and a political-advertising firm. In 2012, he decided to run for mayor of Nuevo Cuscatlán, a small town near the capital. His campaign promised to turn the town into a modern model of development, and he quickly became popular for his innovative ideas and social media presence.

In 2015, Bukele ran for mayor of San Salvador and won. He continued to promote large public projects, like building a flashy market and installing lights on every corner of the city to fight crime. His social media strategy made him more popular than the sitting President, and he built an image of modern irreverence, often wearing casual clothes and a backward baseball cap.

Bukele’s Break from Tradition

By 2017, Bukele had outgrown the left-wing FMLN party that had once supported him. After a series of clashes with party leaders, he was expelled and quickly launched his own party, Nuevas Ideas. He ran for the presidency in 2019 as an anti-establishment populist, using social media to campaign and connect with voters. At just 37 years old, Bukele won the presidency with 53% of the vote.

Once in office, Bukele quickly modernized the presidential palace and began ambitious projects to renovate the capital and attract foreign investment. He made headlines worldwide in 2021 by making El Salvador the first country to use Bitcoin as legal tender, hoping to boost the economy and draw attention away from the country’s violent past. While the move hasn’t had the widespread adoption Bukele hoped for, it has succeeded in putting El Salvador on the global map.

The Struggles and Successes of Bukele’s Policies

In March 2022, the fragile truce between Bukele and the gangs collapsed, leading to a surge in violence. Bukele responded by implementing a new mano dura policy, declaring a “state of exception” that restricted freedoms and allowed for mass arrests. The military and police swept through gang-controlled areas, arresting more than 1,000 people per day.

This approach, while controversial, has been effective in reducing violence. Homicides in El Salvador have dropped by over 70% since 2023, according to government data. However, the crackdown has also filled the country’s jails to overflowing, leading Bukele to build a new mega-prison, the Centro de Contenimiento del Terrorismo (CECOT), which can hold 40,000 inmates.

The conditions in these prisons have been harsh, with prisoners stripped to their underwear and given minimal food. Despite accusations of human rights violations, Bukele argues that the harsh conditions are necessary to keep the country safe.

Bukele’s Growing Influence

Despite the criticisms, Bukele’s tough approach has won him admirers in other countries. Leaders in Honduras, Ecuador, and Argentina are looking to implement similar policies. Even in the United States, Bukele has found supporters, particularly among right-wing politicians. Bukele has invited prominent U.S. figures to visit El Salvador, and his growing influence in the region has not gone unnoticed by the Biden Administration.

However, the long-term success of Bukele’s policies remains uncertain. While he has brought peace and security to El Salvador, the economic challenges facing the country are significant. Public debt has soared, and the economy remains weak. Bukele’s decision to invest in cryptocurrency has not been well received by foreign investors, and there are concerns about the lack of transparency in his government’s spending.

The Future of El Salvador Under Bukele

As Nayib Bukele begins his second term as President of El Salvador, the world is watching closely. His policies have made the country safer, but at what cost? Critics argue that Bukele’s focus on security has come at the expense of democracy and human rights. Others worry that his economic policies, particularly his embrace of Bitcoin, may lead to financial instability.

For now, Bukele’s popularity remains strong, especially among those who lived through the terror of gang violence. But the future is uncertain. Whether Bukele’s model of leadership will continue to succeed in El Salvador and beyond is a question that only time will answer.

As El Salvador continues its transformation under Bukele’s leadership, the world will be watching to see if the Bukele miracle can be sustained, or if it will ultimately prove to be a costly experiment in authoritarianism.

Crypto Market Crash: $335 Million Lost in 24 Hours

The cryptocurrency market faced a massive crash between August 27 and 28, resulting in crypto traders losing over $335 million in just 24 hours. Thousands of traders were hit hard, especially those with long positions who were expecting prices to rise. In this article, we’ll explore what happened during this market crash, analyze the impact on Bitcoin (BTC) and Ethereum (ETH), and discuss what this means for future trading strategies.

What Happened in the Crypto Market Crash?

On August 27 and 28, the cryptocurrency market saw a sudden and sharp decline in prices. This crash caused widespread liquidations, where traders were forced to close their positions because their investments lost too much value. According to data from CoinGlass, 92,360 crypto traders were liquidated during this period, losing a total of $335 million. The majority of these losses came from long-position traders, who had bet that prices would go up. Instead, they saw their investments fall drastically, leading to massive losses.

How Much Did Traders Lose?

Out of the $335 million lost, a staggering 85% came from traders who held long positions. These traders lost over $278 million as the market turned against them. The largest single loss happened on Binance, one of the biggest cryptocurrency exchanges in the world. Here, a trader lost $13 million on the ETH/BTC trading pair as Ethereum’s price dropped significantly.

Bitcoin (BTC) and Ethereum (ETH) Price Analysis

Bitcoin and Ethereum, the two biggest cryptocurrencies, were at the center of this crash. At the time of writing, Bitcoin was trading at $59,750, while Ethereum was at $2,550. Both cryptocurrencies experienced more than 4% losses in the last 24 hours, although they have recovered slightly from their lowest points during the crash.

Bitcoin dropped as low as $58,060, while Ethereum fell to $2,409. These levels have caught the attention of analysts, with some suggesting that these could be the market bottoms. If true, this could mean that the market is getting ready for a new bull run, where prices will rise again.

Is It Time to Short Bitcoin and Ethereum?

The big question for traders now is whether it’s a good time to short Bitcoin and Ethereum or if they should start opening long positions again. Shorting is when traders bet that the price of an asset will go down, while going long means betting that prices will go up. After a crash like this, the market is often uncertain, making it difficult to predict the best move.

However, some analysts believe that the market is showing signs of a coming bull run. Favorable macroeconomic conditions, such as low interest rates and strong demand for digital assets, suggest that cryptocurrency prices might rise in the near future. If this happens, those who open long positions now could see significant gains.

What Caused the $335 Million Crypto Trader Losses?

The losses suffered by crypto traders during this crash can be attributed to several factors. First, the overall market sentiment had become overly bullish, with many traders expecting prices to continue rising. This led to a large number of long positions, which became vulnerable when the market unexpectedly turned downward.

Second, the high level of leverage used by many traders amplified their losses. Leverage allows traders to borrow money to increase their position size, but it also increases the risk of liquidation if the market moves against them. When prices started to fall, leveraged traders were quickly forced out of their positions, contributing to the $335 million in losses.

Market Signals for the Next Bull Run

Despite the recent crash, there are still strong signals that the cryptocurrency market could be gearing up for another bull run. One of the key factors driving this optimism is the increasing adoption of digital assets by institutional investors. As more large companies and financial institutions invest in cryptocurrencies, demand is likely to rise, pushing prices higher.

Additionally, the macroeconomic environment remains favorable for cryptocurrencies. With low interest rates and ongoing concerns about inflation, many investors are turning to digital assets as a hedge against economic uncertainty. This could create strong upward momentum for Bitcoin, Ethereum, and other cryptocurrencies in the coming months.

Understanding the Liquidation of Long-Position Crypto Traders

To fully understand the impact of the recent market crash, it’s important to look at how long-position traders were liquidated. When a trader takes a long position, they are betting that the price of an asset will rise. If the market moves in the opposite direction, the trader’s position can lose value quickly.

In this case, as prices fell, long-position traders saw their investments drop in value. Many of these traders had used leverage to increase their position size, which made their losses even larger. As the value of their positions decreased, they were forced to sell their assets at a loss to avoid further liquidation.

Binance’s $13 Million Loss on the ETH/BTC Pair

One of the most significant events during the market crash was the $13 million loss on the ETH/BTC trading pair on Binance. This loss was the largest single liquidation during the crash and highlights the risks of trading with leverage. The ETH/BTC pair is a popular trading option for those looking to take advantage of price movements between Ethereum and Bitcoin. However, the recent crash showed how quickly these trades can go wrong when the market turns against you.

Price Analysis of Bitcoin and Ethereum After the Crash

After the crash, Bitcoin and Ethereum both showed signs of stabilization, but their prices remain well below their recent highs. Bitcoin, which was trading near $60,000 before the crash, now hovers around $59,750. Similarly, Ethereum, which had been trading above $2,600, is now closer to $2,550.

While these prices are still lower than before, the fact that they have not dropped further suggests that the market may be finding a new equilibrium. If this is the case, traders could start seeing opportunities to buy at these lower levels, especially if they believe a new bull run is on the horizon.

Long or Short? Crypto Trading Strategies After the Crash

For traders looking to make the most of the current market conditions, the decision to go long or short on Bitcoin and Ethereum is crucial. After a significant crash, the market can be unpredictable, with prices often swinging wildly in both directions.

Some traders might choose to short Bitcoin and Ethereum, betting that prices will continue to fall in the short term. Others might see the recent crash as an opportunity to buy at lower prices, hoping to profit from the next bull run. Whichever strategy you choose, it’s essential to keep a close eye on market signals and be prepared to adjust your positions as the situation evolves.

Crypto Wealth Reshapes Global Citizenship

The New World of Cryptocurrency in 2024

In 2024, the cryptocurrency world looks very different from just a few years ago. Bitcoin, the most popular digital asset, hit a new record in March, reaching over USD 73,000. The approval of spot Bitcoin and Ethereum ETFs in the United States also brought in a wave of institutional capital, making crypto more mainstream.

Now, there’s a buzz about the potential launch of Solana ETFs, which could further connect digital assets with traditional finance. These changes are leading to wider crypto adoption, and as a result, more people are considering digital assets as a serious part of their wealth and global mobility plans.

A New Class of Crypto Millionaires

As cryptocurrencies become more accepted, a new group of wealthy individuals has emerged. According to New World Wealth, the number of crypto millionaires has skyrocketed by 95% in just one year. Now, 172,300 people hold over USD 1 million in digital assets. There are also 325 centi-millionaires (people with over USD 100 million) and 28 crypto billionaires, a 27% increase from last year.

This rapid growth has caught the attention of the investment migration industry. More and more crypto-wealthy individuals are looking for alternative residence and citizenship options. These digital nomads aren’t just looking to save on taxes; they want to live in places that embrace innovation and have friendly regulations for decentralized finance (DeFi).

Countries that offer citizenship by investment programs are particularly attractive to these crypto investors. In return for making a significant investment, these programs allow them to obtain residence or even citizenship.

New Investment Opportunities in the Crypto World

The global crypto adoption index shows that different regions are embracing digital assets in unique ways. Singapore ranks #1 due to its strong infrastructure, innovative technology, and friendly regulatory environment. Hong Kong (SAR China) is close behind, thanks to its strong economy and favorable tax policies. The UAE is also a top destination, offering significant tax benefits and a growing economy.

Asia Pacific: A Leading Region for Crypto Investors

Asia Pacific is becoming a powerhouse for crypto-friendly investment migration. Singapore’s top spot on the crypto adoption index is backed by its recent regulations on stablecoins, making it a forward-thinking financial hub. Hong Kong also approved spot crypto ETFs in early 2024, showing its commitment to staying competitive in the digital asset space. These examples highlight the region’s proactive approach to blending digital assets with traditional finance.

The Middle East, especially the UAE, continues to draw crypto wealth with its zero capital gains tax and progressive regulations. Dubai, in particular, has a long history of being crypto-friendly. It approved the first cryptocurrency fund in the region in 2021. More recently, Dubai allowed residents to trade cryptocurrencies directly with their bank accounts, marking a significant step toward mainstream crypto adoption.

Europe: A Dynamic Landscape for Crypto Investment

Europe also offers attractive opportunities for crypto investors. Malta and Cyprus have strong programs designed specifically for people with digital assets. These countries have progressive regulatory frameworks and innovative approaches to managing digital currencies. Switzerland remains a key player with its “Crypto Valley” in Zug, known for its supportive stance on digital assets and a thriving blockchain ecosystem.

The Americas: Rising Crypto Potential

In the Americas, there is growing interest in cryptocurrency investment. The approval of spot Bitcoin ETFs in the USA has sparked increased attention from investors. Meanwhile, countries like Panama are positioning themselves as crypto-friendly havens, attracting digital asset entrepreneurs from around the region.

Caribbean nations, traditionally popular for investment migration, are also adapting to the crypto wave. Antigua and Barbuda, as well as St. Kitts and Nevis, have implemented forward-thinking laws to attract crypto investors.

India’s Crypto Challenges

On the other hand, India presents challenges for crypto investors. The country’s strict tax policies on digital assets, such as a 1% tax deducted at source (TDS) on transactions and a flat 30% tax on crypto gains, have pushed many wealthy individuals to look for alternative residence and citizenship options. This growing trend shows that India’s crypto-wealthy are seeking jurisdictions with more favorable conditions for their digital assets.

The Convergence of Crypto and Citizenship

As traditional finance and digital assets continue to merge, the connection between investment migration and cryptocurrencies becomes stronger. For the crypto millionaires of 2024, having digital wealth isn’t enough; they also seek global mobility and the freedom to live in jurisdictions that support their financial goals.

Nations around the world are now competing to attract this new wave of crypto wealth. They are evolving their investment migration programs to cater to the unique needs of the crypto elite. The most successful countries will be those that can offer a comprehensive ecosystem for crypto investors, including favorable regulations, strong infrastructure, and opportunities for alternative citizenship or residence.

As we move forward, the intersection of cryptocurrency and investment migration will play a crucial role in shaping the future of global wealth and mobility. In this new digital gold rush, those who can navigate the complexities of both traditional and digital finance will come out on top.

Bitcoin Inflows Surge After Powell’s Comments

Bitcoin (BTC) saw a massive increase in inflows, reaching $543 million after Jerome Powell’s comments at the Jackson Hole Symposium. His remarks hinted at a possible interest rate cut in September, leading to a significant shift in the cryptocurrency market. This surge in Bitcoin inflows mainly occurred on Friday, showing how sensitive Bitcoin is to changes in interest rate expectations.

According to data from CoinShares, digital asset investment products saw a total of $533 million in inflows last week. This marked the largest inflow in five weeks, largely driven by Bitcoin. As the leading cryptocurrency, Bitcoin continues to be a major player in the crypto market, reacting strongly to global economic events like Powell’s speech.

Ethereum Sees Outflows Despite New ETFs

While Bitcoin enjoyed a surge in inflows, Ethereum (ETH) had a different experience. Ethereum saw $36 million in outflows, despite the introduction of new Ethereum ETFs in the US, which recorded $60.7 million in inflows last week. The outflows from Ethereum were primarily due to Grayscale’s ETHE product, which faced $118 million in outflows. This led to a net loss for Ethereum, even though the new ETFs were performing well.

A month after the launch of these new Ethereum ETFs, they have attracted $3.1 billion in inflows. However, this positive trend was partially offset by $2.5 billion in outflows from Grayscale’s Ethereum Trust. Ethereum’s performance in the market shows that while new investment products can draw in fresh capital, older products like Grayscale’s can still see significant withdrawals.

Spot BTC ETFs Lead the Pack

In the world of Bitcoin ETFs, spot BTC exchange-traded funds (ETFs) in the US had a strong showing last week. They accumulated over $500 million in net inflows, with BlackRock’s IBIT leading the charge. BlackRock’s ETF attracted $310 million in cash, making it the top performer in this category. Fidelity’s FBTC came in second, pulling in about $88 million.

These figures highlight the growing popularity of Bitcoin ETFs, especially spot ETFs. Investors are increasingly turning to these products as a way to gain exposure to Bitcoin without directly holding the cryptocurrency. The success of these ETFs shows that institutional interest in Bitcoin remains strong, even as the market continues to evolve.

Solana and Other Altcoins Struggle

While Bitcoin saw a surge in inflows and Ethereum had mixed results, other cryptocurrencies like Solana (SOL) faced challenges. Solana funds saw just $100,000 in inflows last week, and its month-to-date flows are at negative $34.3 million. This indicates that Solana is struggling to attract new investment, even as other parts of the crypto market see growth.

Solana’s struggles are part of a broader trend among altcoins, which have faced increased competition from more established cryptocurrencies like Bitcoin and Ethereum. While Solana has shown promise in the past, it is currently facing headwinds as investors focus more on the leading digital assets.

Regional Inflows and Outflows

The US led the way in cryptocurrency inflows last week, with $498 million coming into the market. This was followed by Hong Kong and Switzerland, which saw $16 million and $14 million in inflows, respectively. On the other hand, Germany experienced minor outflows of $9 million, making it one of the few countries with net outflows year-to-date.

In addition to the US, Brazil and Canada were notable for their strong inflows into crypto funds. Brazil saw $39.5 million in new investments, while Canada attracted $47.5 million. These figures show that while the US remains the dominant player in the crypto market, other countries are also seeing significant investment activity.

Blockchain Equities Continue Positive Streak

Blockchain equities have been on a positive streak, recording inflows for the third consecutive week. Last week, these equities saw $4.8 million in new investments. While this may seem small compared to the inflows seen in Bitcoin and other digital assets, it indicates growing confidence in blockchain technology and its potential for long-term growth.

Blockchain equities represent companies that are involved in the development and application of blockchain technology. As more industries explore the potential of blockchain, investment in these companies is expected to rise. The continued inflows into blockchain equities suggest that investors are betting on the future of this technology, even as the broader crypto market experiences fluctuations.

Trading Volumes Remain High Despite Lower Activity

Despite a decrease in trading volumes compared to previous weeks, the overall activity in the cryptocurrency market remained strong. Last week, trading volumes reached $9 billion, showing that there is still significant interest in digital assets. While volumes may have dipped, the continued high level of trading indicates that investors are still actively participating in the market.

The high trading volumes are also a sign of the market’s resilience. Even as prices fluctuate and some assets see outflows, the overall market activity remains robust. This suggests that the crypto market is becoming more mature, with investors continuing to trade even during periods of uncertainty.

The cryptocurrency market experienced significant activity last week, with Bitcoin leading the way in inflows following Jerome Powell’s comments. While Ethereum faced outflows despite new ETF launches, the overall market saw strong inflows, particularly in the US. Solana and other altcoins struggled, but blockchain equities continued to attract investment. As the market continues to evolve, it will be interesting to see how these trends develop in the coming weeks.