Latest Bitcoin and Cryptocurrency News

Crypto Market Enters Extreme Fear as Bitcoin Faces $50K Correction

by Tatjana September 7, 2024

written by Tatjana 6 minutes read

The crypto market is experiencing a period of “extreme fear,” and analysts are warning that Bitcoin could fall below $50,000 soon. With concerns rising about a market correction, traders are keeping a close eye on Bitcoin’s performance. Let’s break down why analysts believe Bitcoin could see a significant dip and what factors are influencing the current state of the market.

Bitcoin Market Sentiment Hits Extreme Fear

The Crypto Fear & Greed Index, which measures the overall sentiment of crypto traders, has recently dropped to a low point. The index currently stands at 22, marking the lowest sentiment since early August. This sharp drop signals that traders are nervous about the future of Bitcoin and the overall crypto market sentiment.

Crypto analyst Axel Adler pointed out that the last time the index dropped to such a low level, Bitcoin’s price fell to $49,000. He also reminded traders that during China’s mining ban, the index dropped to 10%, and during the Luna crash, it fell as low as 6%. Adler believes that if this trend continues, Bitcoin’s price could see a similar drop below $50,000 in the near future.

Fear & Greed Index: What Does It Mean for Bitcoin?

The Crypto Fear & Greed Index plays an important role in understanding market sentiment. When the index is high, it means the market is greedy, which can lead to overvaluation. When it’s low, like it is now, it indicates extreme fear, which could mean that Bitcoin prices are undervalued or may continue to fall.

Bitcoin has a history of being influenced by these emotional swings in the market. When fear levels rise, like we are seeing now, traders often make decisions based on panic rather than logic, which can lead to price drops.

September Brings Challenges for Bitcoin

Historically, September has been a challenging month for Bitcoin prices. Data from CoinGlass shows that the average return for Bitcoin in September is -4.69%, making it one of the most bearish months of the year. The Bitcoin market sentiment during this time tends to lead to lower prices, and this year seems to be no different.

Arthur Hayes, the former CEO of BitMEX, is one of the many experts warning about a possible correction below $50,000. In a recent social media post, he stated that Bitcoin is “heavy” and that he is betting on a drop below $50,000 by the weekend. Hayes even took a “cheeky short,” betting on Bitcoin’s price to fall, which is a sign of how serious he believes this potential correction could be.

Bitcoin’s Halving Cycle and Its Role in Price Drops

Another factor adding to the pressure on Bitcoin prices is the Bitcoin halving cycle. This cycle refers to the event that occurs roughly every four years when the reward for mining Bitcoin is cut in half. Historically, these cycles have led to price increases in the long run, but they are also known for creating short-term volatility in the market.

Crypto analyst Rekt Capital pointed out that the current price drop is in line with previous halving cycles. In a recent post, he noted that Bitcoin is down 6.19% for the month of September, which is similar to the single-digit declines seen in September of 2017, 2018, 2020, and 2022. While this downward pressure is concerning for some traders, others believe that it’s simply part of Bitcoin’s natural price cycle.

Technical Analysis: Will Bitcoin Breakout After This Dip?

Despite the current bearish sentiment, some analysts believe that Bitcoin could be setting up for a breakout. According to popular crypto trader Mags, Bitcoin is forming a cup-and-handle pattern on its price chart. This pattern is typically seen as a bullish signal, meaning it could indicate that Bitcoin is preparing for a major price increase once the correction is over.

However, in the short term, Bitcoin’s price is likely to face further downward pressure. According to technical analysis shared by Rekt Capital, Bitcoin recently faced rejection from an important resistance level. Until Bitcoin is able to close above this resistance on a four-hour chart, the price may continue to struggle.

What Could Happen If Bitcoin Falls Below $50,000?

If Bitcoin does fall below $50,000, it could trigger further panic in the market. Many traders use $50,000 as a psychological price point, meaning that if Bitcoin drops below this level, it could lead to a wave of selling as traders try to limit their losses. This type of price movement is often referred to as a “market correction.”

Bitfinex analysts have also warned that Bitcoin could see a correction below $50,000 before a true bull market begins. According to their analysis, this dip could be necessary to shake out weaker hands and allow for a stronger upward trend in the future. In other words, while the short-term outlook may seem bearish, a drop below $50,000 could pave the way for a stronger rally later on.

How Does This Affect the Rest of the Crypto Market?

As always, Bitcoin’s performance has a big impact on the rest of the crypto market. When Bitcoin’s price falls, it often drags other cryptocurrencies down with it. This is because Bitcoin is seen as a leading indicator for the broader crypto market.

Right now, many traders are concerned that if Bitcoin falls below $50,000, it could lead to a broader market correction. Cryptocurrencies like Ethereum and smaller altcoins are often more volatile than Bitcoin, so they could see even larger price swings if Bitcoin continues to drop.

The current state of the crypto market shows signs of extreme fear, with analysts warning of a potential Bitcoin price drop below $50,000. While historical trends and market sentiment suggest that September is typically a bearish month for Bitcoin, some analysts believe that this correction could set up for a breakout in the near future.

As traders navigate this period of uncertainty, it’s important to keep an eye on key indicators like the Crypto Fear & Greed Index and Bitcoin’s halving cycle. Whether Bitcoin drops below $50,000 or rebounds in the coming weeks, the market is likely to remain volatile in the short term.

Ethereum

Why Ether ETFs Are Struggling Against Tech Stocks: Market Analysis for 2024

by Tatjana September 6, 2024

written by Tatjana 8 minutes read

Ether ETFs Face Tough Competition from Tech Stocks

A crypto analyst has pointed out that while Ether ETFs have gained attention on Wall Street, they now face direct competition from tech stocks. Tech companies are delivering better revenue and higher profit margins, making them more attractive to investors than Ether ETFs.

Despite the buzz around these new ETFs, Ether’s price performance has not been as strong as some had hoped. While many believe Ethereum might hit new all-time highs by the end of 2024, one analyst says it’s unlikely. They argue that Ethereum has not developed a strong narrative to drive its price higher, and tech stocks have taken the spotlight.

However, some traders believe that a price spike for Ethereum could still be on the horizon.

Ethereum Struggles to Compete with Tech Stocks

Nick Forster, the founder of Derive, a crypto derivatives platform and former Wall Street trader, shared his thoughts on the situation. He explained that the launch of spot Ether ETFs has caught Wall Street’s attention, but now Ether competes with tech stocks, which are delivering better revenue and multiples. This has made it harder for Ethereum to stand out as an investment.

Since the beginning of the year, Ethereum’s price has only increased by about 1%. It’s currently trading at around $2,376, according to CoinMarketCap data. In comparison, some of the biggest tech stocks have seen much larger gains during the same period. For example, Nvidia (NVDA) has surged by 122%, and Meta Platforms (META) has gone up by 49%.

Forster believes there’s a slim chance Ether will reach its all-time high of $4,878 by the end of 2024. He says that “it’s possible, but not highly likely.” According to him, three major events would need to happen for this to occur.

Factors That Could Impact Ether’s Price

For Ether to break its all-time high, Forster says three key things would need to line up. The first is Donald Trump winning the United States presidential election in November. The second is the Federal Reserve making aggressive rate cuts to increase liquidity in the market. And finally, there would need to be a broader increase in global financial liquidity.

Without these factors, it’s unlikely Ethereum will see a major price boost, he explained.

While some traders are hopeful for a price surge, others are more cautious. Crypto trader Zen pointed out that the Federal Reserve’s rate cuts could have an unpredictable effect on the market. If the cuts don’t meet traders’ expectations, it could lead to a bearish reaction instead of a rally.

Zen wrote in a post on X (formerly Twitter), “Be careful here. Feds cutting rates by 50 is a new rumor. Market is adjusting prices for that scenario. So, 25 basis point rate cut can become bearish news.”

How the US Election Could Shape Ethereum’s Future

Forster also noted that the upcoming US election could be one of the most significant events in Ethereum’s history. He even said it could have a bigger impact on the asset’s price than the approval of the Ether ETFs.

“There’s an extra bump of volatility implied around the election, with a potential 10-15% move on that day,” he added.

With the election only months away, traders and investors are closely watching to see how it will affect the crypto market. For Ethereum, this could mean larger price swings than usual.

According to Forster, the market is already expecting more significant price changes for Ethereum. Historically, Ethereum’s price has moved by around 2.5-3% each day. But now, the market is pricing in daily moves closer to 3.5%, reflecting the increased volatility around major events like the election.

Is a Price Spike Around the Corner?

Despite Ethereum’s recent struggles, some traders believe the asset is gearing up for a price spike. One of these traders is the pseudonymous Titan of Crypto. In a post on X, Titan of Crypto argued that “an upward move seems just around the corner.”

He pointed to the Relative Strength Index (RSI) as a key indicator. The RSI measures the speed and change of price movements to determine if an asset is overbought or oversold. When Ethereum’s RSI is in or near oversold territory, it often experiences a price rally or a short-term pump, according to Titan of Crypto.

Another trader, Yoddha, shared a similarly optimistic outlook. Yoddha is confident that Ether is “getting ready for five figures” despite the asset’s ongoing consolidation.

Ethereum Whales Are Buying Big

In addition to the optimism from some traders, there has been a surge in buying activity from Ethereum whales. Whale investors, who are known for holding large amounts of Ether, have been adding significant amounts of the cryptocurrency to their wallets in recent weeks.

On September 3, Ethereum’s largest whale wallets added 333,740 ETH, valued at approximately $800 million, according to data from IntoTheBlock. This was the highest single-day inflow of whale purchases since March 13.

Ethereum whales have been on a 20-day buying spree, with each day showing more inflows than sales. August 16 was the last time Ethereum’s largest whale wallets recorded negative flows.

The ongoing accumulation by whales suggests that these large investors are bullish on Ethereum’s future, even as short-term traders remain cautious. Historically, prolonged whale buying trends have often signaled potential bullish movements in Ethereum’s price.

For example, in March 2023, when whale inflows exceeded 370,000 ETH, it drove Ethereum’s price to yearly highs above $4,000. If this pattern repeats, Ethereum could be on the verge of another significant price breakout.

What’s Next for Ethereum?

In the short term, Ethereum faces some challenges. Over the past 10 days, the price of Ethereum has dropped by 15%, falling as low as $2,400. This decline has been driven by selling pressure from short-term traders who are nervous about the upcoming Federal Reserve rate decision and other macroeconomic factors.

However, if whale investors continue to accumulate Ether, the price could find support around the $2,400 level. The Keltner Channel, a technical indicator, shows that Ethereum is nearing the lower band, currently around $2,316.70. This suggests there could be further downside pressure on the asset in the near term.

If Ethereum fails to hold above $2,316, it could see a decline toward the $2,200 mark, which would serve as the next critical support level.

On the other hand, if Ethereum manages to stay above $2,316, it may attempt to break through the immediate resistance at $2,571.77. A successful break above this resistance could open the door for a retest of the $2,826.83 level, which would be a major win for Ethereum bulls.

Long-Term Outlook

In the long term, the ongoing whale accumulation hints at a potential bullish reversal for Ethereum. Historically, similar patterns of whale accumulation have preceded significant price increases. If the broader market conditions improve, particularly if the Federal Reserve cuts rates as expected, Ethereum could see a resurgence in price.

However, much of Ethereum’s future depends on macroeconomic factors and market sentiment. The US presidential election, the Federal Reserve’s rate decisions, and global financial liquidity will all play a role in shaping Ethereum’s price in the coming months.

For now, Ethereum traders and investors will need to closely monitor these key events and market trends. While the short-term outlook may seem uncertain, the long-term potential for Ethereum remains strong, especially with institutional investors like whales continuing to buy the dip.

NFT

Bored Ape NFTs: Why Investors Have Lost 93% of Their Value

by dave September 5, 2024

written by dave 6 minutes read

Bored Ape NFTs

If you bought Bored Ape NFTs during their peak, you’ve likely lost about 93% of your investment. The floor price, which is the lowest price at which one of these NFTs can be sold, has dropped drastically. Once, Bored Ape NFTs were selling for hundreds of thousands of dollars, but now they are worth much less.

In the beginning, Bored Ape NFTs were more than just digital art. They represented a new type of asset in the crypto world—an emerging asset class that combined community and art. People who owned these NFTs were considered to be on the cutting edge of technology. But things have changed, and the market for Bored Apes is no longer as hot as it used to be.

The Rise and Fall of Bored Ape Yacht Club (BAYC)

When the Bored Ape Yacht Club (BAYC) collection first launched, it took the NFT world by storm. In 2021 and 2022, the prices of these digital assets skyrocketed. At one point, owning a Bored Ape was like owning a Ferrari. The minimum price for an Ape NFT, also known as the floor price, peaked at 152 ETH, which was worth $429,000 in April 2022.

However, things didn’t stay that way. The NFT market has faced several challenges since then. The excitement around NFTs has faded, and trading volumes have hit record lows. Even though Bored Apes are still considered “blue chip” NFTs, meaning they are among the best in the market, their value has dropped sharply.

Today, the floor price for a Bored Ape has fallen to just $27,600. In ETH terms, this means the price has dropped from 128 ETH to only 11 ETH, which is a 91% drop in value. This steep decline is a sign that the NFT market, and Bored Apes in particular, is struggling.

The Role of Yuga Labs and Otherside Game

Yuga Labs, the company behind the Bored Ape Yacht Club, played a huge role in the rise of these NFTs. They built hype around the collection by teasing a new game called Otherside, which is still being developed. During this time, the market for Bored Apes was frothy, with people willing to pay high prices to own one.

But as time went on, excitement for the Otherside game cooled down, and the market for Bored Apes followed suit. While Yuga Labs remains a big name in the NFT world, their projects no longer hold the same allure they once did.

OpenSea’s Legal Troubles

Another major blow to the Bored Ape NFT market came when OpenSea, the leading NFT marketplace, disclosed that it had received a Wells notice from the Securities and Exchange Commission (SEC). A Wells notice is a warning that the SEC is preparing to sue. This news sent shockwaves through the NFT community, as OpenSea has been a major platform for buying and selling NFTs, including Bored Apes.

OpenSea has facilitated around 2 million ETH worth of Bored Ape sales. However, with the threat of legal action from the SEC looming, the future of the platform—and the NFTs traded on it—remains uncertain.

Bored Ape Prices: A Rollercoaster Ride

Bored Ape prices have been on a wild ride over the past year. In August, the floor price for an Ape dipped to $20,000 amid a global market sell-off. Then, the price briefly rose to $39,000 before falling back down to around $27,600, where it sits today.

This volatility in Bored Ape prices reflects the broader struggles of the NFT market. While some investors hope for a rebound, others believe that the NFT craze has passed, and prices may never return to their previous highs.

Companies Pulling Back from the Ape World

Several companies that initially embraced the Bored Ape world are now pulling back. One example is Tally Labs, a company that built a whole universe around a specific Bored Ape known as Jenkins the Valet (Bored Ape #1798). Tally Labs created The Writers Room, a project where NFT holders could help shape the storyline of Jenkins the Valet.

This project even led to the creation of a novel written by Neil Strauss, a New York Times bestselling author. However, Tally Labs recently announced that they would no longer invest resources into new or existing projects related to the Bored Ape world.

Blake Chasen, the CEO of Tally Labs, wrote in a blog post that while he believes ETH NFTs could make a comeback in the future, it’s not the case right now. For now, companies like Tally Labs are stepping away from their Bored Ape-related ventures.

What’s Next for Bored Ape NFTs?

The future of Bored Ape NFTs is uncertain. While some believe that the collection could still make a comeback, especially if the Otherside game is successful, others think that the hype around NFTs has died down for good.

One of the big selling points of Bored Apes was the idea that NFT owners could use their Apes as intellectual property (IP) in mainstream stories. For example, owners could license their NFTs to be featured in books, movies, or other media. Tally Labs’ project with Jenkins the Valet was one attempt to make this happen.

However, as the market for Bored Apes continues to decline, it’s unclear whether these IP opportunities will ever materialize. For now, the NFT market remains in a slump, and Bored Ape owners are left wondering if their investments will ever recover.

Is the NFT Hype Over?

For those who bought Bored Ape NFTs at their peak, the past year has been a tough one. With prices down 93% and no clear signs of recovery, many investors are questioning whether the NFT craze was just a passing trend.

The market for NFTs, including Bored Apes, has been hit by a combination of factors, from declining interest in digital assets to legal troubles facing platforms like OpenSea. While some investors hold out hope for a comeback, others believe that the NFT bubble has burst.

Only time will tell whether Bored Ape NFTs will regain their former glory or continue to lose value. For now, though, it seems that the days of NFTs being the next big thing are behind us.

News

US Federal Reserve Orders United Texas Bank to Halt Crypto Services Over AML Violations

by muhammed September 5, 2024

written by muhammed 8 minutes read

US Federal Reserve Takes Action Against Texas Bank for Crypto Dealings

The US Federal Reserve, also known as the Fed, has issued a cease-and-desist order against United Texas Bank. This Dallas-based bank has been providing services to cryptocurrency companies, but the Fed claims that the bank was not following proper anti-money laundering (AML) rules. The order is part of a larger crackdown by US regulators on banks that deal with crypto firms.

United Texas Bank is one of the few remaining banks in the United States that still offers services to the crypto industry. However, it now faces serious scrutiny from the Fed due to “significant deficiencies” in its compliance with AML regulations. These laws are designed to prevent illegal activities such as money laundering, and banks are required to follow them strictly.

In response to the order, the bank’s leadership has agreed to cooperate with the Fed. Instead of going through a long legal process, they have accepted the cease-and-desist order. Now, they must submit a plan within 90 days to correct the issues and ensure they are fully following AML compliance standards.

Why Was United Texas Bank Targeted?

United Texas Bank’s involvement with cryptocurrency companies has put it in the spotlight. As the Fed tightens its grip on crypto-related banking activities, it’s no surprise that the bank has drawn attention. Crypto firms have historically struggled to find banking partners in the US due to concerns about fraud, volatility, and money laundering.

According to the latest financial report, United Texas Bank has 75 employees and holds about $1 million in total assets. The cease-and-desist order could have a major impact on its business, especially since it is one of the few banks still serving the crypto industry.

The Fed did not give specific details about how the bank failed to follow AML regulations. However, it is clear that United Texas Bank’s dealings with its crypto customers have raised red flags. The order indicates that the bank must take immediate steps to correct these issues and prevent further problems.

The Fed’s Crackdown on Crypto-Friendly Banks

This action against United Texas Bank is just one example of the US Federal Reserve’s growing concern about banks that work with cryptocurrency companies. Last month, Customers Bank, another crypto-friendly lender, also came under fire from the Fed. The Pennsylvania-based bank agreed to be closely monitored by the Fed after it was accused of not following certain regulations related to its crypto clients.

Customers Bank became a popular option for the crypto industry after the collapse of Signature Bank and Silvergate Bank in 2023. These two banks were once leaders in providing banking services to crypto companies, but both shut down due to financial and regulatory problems.

With Signature and Silvergate out of the picture, many crypto firms were left scrambling to find new banking partners. A few banks, including United Texas Bank and Customers Bank, stepped in to fill the gap. However, the Fed’s recent actions show that regulators are not comfortable with these banks servicing the crypto industry.

Regulatory Concerns Over Crypto Banking

The Federal Deposit Insurance Corporation (FDIC) has also expressed concerns about banks working with crypto companies. According to the FDIC, deposits from crypto firms can be highly volatile and pose significant risks to the stability of banks. This volatility can create liquidity problems, making it harder for banks to manage their finances and protect their customers.

These concerns have led to increased scrutiny of banks that offer services to crypto firms. In some cases, banks have been forced to reduce or completely stop their crypto-related activities. For example, last year, New York-based Metropolitan Bank announced that it would wind down its crypto business. This decision affected several high-profile clients, including the popular crypto exchange Crypto.com.

Many crypto companies are now facing an uphill battle to find banks willing to work with them. Some have been forced to look for banking partners overseas, while others have had to consolidate around the few remaining US banks that still accept crypto clients.

The Impact of Cease-and-Desist Orders on Banks

Cease-and-desist orders like the one issued to United Texas Bank are serious regulatory actions. When a bank receives such an order, it is required to stop certain activities and take steps to fix any problems identified by regulators. In this case, United Texas Bank must address its deficiencies in complying with AML laws.

The bank’s leadership must develop and submit a detailed action plan to the Fed within 90 days. This plan will outline how the bank intends to improve its AML compliance and ensure that similar issues do not arise in the future. Failure to follow through with this plan could result in even stricter penalties.

For crypto-friendly banks like United Texas Bank, this kind of regulatory pressure can be devastating. Many banks are already wary of working with crypto companies due to the risks involved. The added burden of complying with strict regulations makes it even harder for banks to justify maintaining relationships with crypto clients.

Challenges Facing Crypto Firms in the US

The crackdown on crypto-friendly banks has created significant challenges for the crypto industry in the United States. Without reliable banking partners, many crypto firms are struggling to manage their finances, process payments, and conduct other essential business operations. This situation has only worsened as more banks limit their exposure to the crypto sector.

The collapse of Signature Bank and Silvergate Bank marked a turning point for the crypto industry. These banks were once viewed as the backbone of the US crypto banking system, providing crucial services to many of the industry’s biggest players. However, their downfall highlighted the risks associated with banking crypto companies and prompted regulators to take a harder stance.

Now, with fewer banks willing to work with them, many crypto firms are turning to offshore banks for their financial needs. While this may provide a temporary solution, it comes with its own set of risks. Offshore banks may not offer the same level of protection or regulatory oversight as US-based institutions, making them a less stable option for crypto firms.

The Future of Crypto Banking in the US

The future of crypto banking in the United States is uncertain. As regulators like the Federal Reserve and the FDIC continue to crack down on banks that serve the crypto industry, it is becoming increasingly difficult for these firms to find reliable banking partners.

For now, the few remaining banks that still work with crypto clients must navigate a challenging regulatory landscape. They must balance the demands of regulators with the needs of their crypto customers, all while managing the inherent risks of the crypto market.

United Texas Bank’s experience serves as a warning to other banks in the sector. The cease-and-desist order highlights the importance of strict adherence to AML regulations and the potential consequences of failing to comply. For banks that choose to continue serving crypto firms, the path ahead will be filled with regulatory challenges and uncertainty.

The US Federal Reserve’s cease-and-desist order against United Texas Bank is a clear example of the growing pressure on banks that work with cryptocurrency companies. As the Fed, the FDIC, and other regulators tighten their grip, banks are being forced to reconsider their relationships with crypto clients. For the crypto industry, this could mean more difficulty in finding banking partners, leading to even greater challenges in the months ahead.

The cease-and-desist order is a reminder that while the crypto market may be evolving, it still faces significant hurdles when it comes to gaining acceptance from traditional financial institutions. Banks must carefully weigh the risks and rewards of working with crypto companies, and for many, the risks may simply be too high.

News

Trump’s World Liberty Financial: A Deep Dive Into His New Cryptocurrency Project

by muhammed September 4, 2024

written by muhammed 9 minutes read

For weeks, Donald Trump and his sons have hinted at a new cryptocurrency project. They’ve been quiet about the details in public, but behind the scenes, things are moving fast. The former U.S. president’s team has been working on a new project called World Liberty Financial. This project is connected to blockchain technology and decentralized finance, also known as DeFi.

The Secret Plans for World Liberty Financial

The World Liberty Financial project is designed to be a borrowing and lending service that will use blockchain technology. In private discussions, Trump’s team has been promoting a document called a white paper, which lays out the project’s goals. One interesting part of the project is that some of the people involved have previously worked on a different blockchain app called Dough Finance.

Dough Finance was recently hacked, losing $2 million. Some of the developers from that project are now part of the World Liberty Financial team. According to reports, some of the code for World Liberty Financial may have come from Dough Finance, although it’s unclear if the new project has fixed any of the old problems.

The Role of Trump and His Sons in the Project

Donald Trump is playing a big role in World Liberty Financial. He has taken the title of “Chief Crypto Advocate” for the project. His sons, Eric Trump and Donald Trump Jr., are also deeply involved. They’re known as the “Web3 Ambassadors” for the project. Even Trump’s youngest son, Barron, who is only 18, is part of the team. He’s listed as the “DeFi visionary” of the project.

The Trump family hasn’t said much about the project in public. They’ve hinted at it on social media, but full details have been scarce. However, their involvement is clear, and they seem to be betting big on the potential of cryptocurrency and blockchain technology.

The New WLFI Cryptocurrency

One of the main parts of World Liberty Financial is the creation of a new cryptocurrency called WLFI. This cryptocurrency will be a governance token, which means that it will allow people who own it to help make decisions about the project. The idea behind WLFI is that users will be able to suggest and vote on changes, such as adding new DeFi lending markets or connecting with other blockchains.

However, there’s one thing that makes WLFI different from other cryptocurrencies. It will be a non-transferable token, which means it can’t be easily traded or sold by investors. This could make it harder for people to speculate and profit off the cryptocurrency. The white paper says that World Liberty Financial will make blockchain technology more accessible, but this unique feature of WLFI might raise some questions.

The Code Controversy: Ties to Dough Finance

One of the most controversial aspects of World Liberty Financial is its connection to Dough Finance. Dough Finance is a blockchain project that was recently hacked, leading to the loss of $2 million. Some of the same people who built Dough Finance are now working on World Liberty Financial.

The white paper for World Liberty Financial lists Zachary Folkman as the head of operations and Chase Herro as the data and strategies lead. Both of these individuals worked on Dough Finance, and Octavian Lojnita, the smart contracts lead for the new project, also has ties to Dough Finance.

There’s evidence that World Liberty Financial has used some of the code from Dough Finance. A review of the now-deleted codebase on GitHub shows that the two projects share similarities in their user interfaces and code. It’s unclear if the new project still contains any vulnerabilities from the Dough Finance hack, but this connection raises concerns about the security of World Liberty Financial.

World Liberty Financial’s DeFi Features

World Liberty Financial aims to be a major player in decentralized finance. It plans to offer a credit account system built on top of the Aave platform and the Ethereum blockchain. This system will allow users to borrow and lend funds in a decentralized way, meaning that there won’t be a central authority controlling the process.

DeFi lending markets have become popular in the world of blockchain technology, and World Liberty Financial wants to tap into this growing trend. Users will be able to manage their WLFI tokens through a smart account or a brokerage interface, making it easier to participate in the platform.

Similar Projects and Risks in the Crypto World

While World Liberty Financial hopes to become a leader in the crypto space, it’s important to remember that other projects with similar goals have faced problems. For example, Voyager Digital, which offered crypto brokerage services, went bankrupt in 2022, leaving its users with big financial losses.

Traditional financial companies have started moving into the crypto world as well, but they’ve stayed away from DeFi. The world of decentralized finance is still new and full of risks. World Liberty Financial is trying to make DeFi more accessible to the public, but it’s still unclear if this project will succeed or face the same challenges as others in the crypto world.

The Team Behind World Liberty Financial

While Donald Trump is the face of World Liberty Financial, the project’s leadership team includes several other key figures. Steve Witkoff, a well-known property developer and long-time Trump friend, is listed as part of the project. His son, Zach Witkoff, is also involved.

The project’s legal counsel comes from Alex Golubitsky and Gabriel Shapiro, who run a company called MetaleX Pro. This firm provides advice on crypto governance, and they’re receiving a portion of the upcoming WLFI token.

However, some of the project’s leaders have controversial backgrounds. Zachary Folkman and Chase Herro have a history of working on projects related to e-commerce and crypto, including Subify, a platform they created that competes with Patreon and OnlyFans. Folkman, who once operated a platform called Date Hotter Girls, has taught seminars on dating techniques, while Herro has discussed his time in prison for drug-related charges on podcasts.

Their involvement in the project adds another layer of controversy, as their previous projects and personal histories have raised questions about their qualifications to lead a high-profile crypto project.

Trump’s Changing Stance on Cryptocurrency

Donald Trump’s involvement in World Liberty Financial marks a significant shift in his views on cryptocurrency. When he was president, Trump was known for criticizing digital assets, even going as far as calling Bitcoin “based on thin air.” However, with his new project, Trump seems to have changed his tune.

Now, Trump is making promises to turn the U.S. into the “crypto capital of the planet.” His support for World Liberty Financial and other blockchain projects is part of a larger plan to appeal to the growing cryptocurrency community.

Trump has also launched several waves of Trump-themed NFTs (non-fungible tokens) in the past, some of which offered rewards like dinners with the former president. This new focus on cryptocurrency and NFTs is part of his strategy to stay relevant in the digital world and reach a younger audience of tech-savvy voters.

Crypto and Politics: Courting the Crypto Vote

Trump’s entry into the crypto world comes at a time when the cryptocurrency industry is becoming more involved in politics. In the 2024 election cycle, crypto companies have poured over $119 million into political campaigns, making them one of the biggest contributors. Companies like Coinbase and Ripple are leading the way, with Coinbase taking the number one spot for corporate spending.

Republicans like Trump have been positioning themselves as pro-crypto, promising to support the industry by reducing regulations and replacing government officials who are hostile to digital assets. Trump’s team has promised that entrepreneurs will be able to launch new crypto products without fear of lawsuits from agencies like the Securities and Exchange Commission (SEC).

On the other hand, Democrats have been divided on the issue. Some, like Senator Chuck Schumer, have called for new laws to clarify the rules around crypto, while others remain skeptical of digital assets. Vice President Kamala Harris, the Democratic nominee, has not publicly shared her views on cryptocurrency yet.

World Liberty Financial is a big gamble for Trump and his family, but it’s clear that they see a future in cryptocurrency and blockchain technology. Whether or not the project will succeed remains to be seen, but it’s certainly making waves in both the crypto world and the political arena.

As World Liberty Financial develops, investors and the public will be watching closely to see how this new crypto project unfolds and if it can live up to its promises of decentralization, accessibility, and innovation.

News

Japan Slashes Crypto Tax from 55% to 20%: What It Means for Investors

by mei September 4, 2024

written by mei 6 minutes read

Japan is getting ready to make a big change to its cryptocurrency tax policy. The government has announced plans to lower the tax on crypto earnings from a high 55% to a flat 20%. This is a major reduction and is expected to have a big impact on investors and the cryptocurrency market in Japan. Many people in the crypto industry are relieved by this news since the current tax system has been a big hurdle for both investors and businesses in the digital asset space.

Current Crypto Taxation in Japan

Right now, Japan’s cryptocurrency tax system is one of the strictest in the world. Cryptocurrency earnings are treated as “various income,” which means they are taxed at a rate of up to 55%. This high tax applies to all forms of income related to cryptocurrency, including trading profits, mining rewards, and staking rewards.

Many investors and companies have voiced their concerns, saying that the high tax rate discourages innovation and makes it harder for Japan to compete with other countries in the digital asset market. This heavy tax burden has made some investors think twice about participating in the crypto space in Japan.

Cryptocurrency traders and businesses have been pushing for a lower tax rate for some time. They believe that a lower tax rate will allow more people to get involved in cryptocurrency trading, mining, and staking, and create a more vibrant market. In response to these concerns, the government is now considering a flat 20% tax rate, which would put cryptocurrency in line with other financial investments like stocks.

Proposal for a Flat 20% Tax Rate

The proposed change to a flat 20% tax rate on cryptocurrency earnings is a welcome update for many investors. According to a post on social media by Marty Party, the Japanese government is actively considering the proposal, which would simplify crypto taxation. By moving to a flat tax rate, Japan would be able to align cryptocurrency taxation with other types of financial instruments like stocks, which also have a 20% tax rate.

This change is expected to make Japan a more attractive place for both domestic and international crypto investors. Currently, many people feel that Japan’s strict crypto tax rules make it difficult to thrive in the digital asset space. With a lower, more reasonable tax rate, the hope is that more investors will choose Japan as a place to do business.

Industry experts believe that this tax cut would help Japan compete better with other countries that already have lower crypto tax rates. Japan could even become a leading hub for cryptocurrency trading, innovation, and investment in Asia if the policy goes through.

Impact on the Crypto Market

If the new tax policy is approved, it is expected to have a major impact on Japan’s cryptocurrency market. Many investors and businesses see the flat 20% tax as a much fairer rate, and they believe it will help boost activity in the market. Analysts predict that a lower tax rate will lead to higher trading volumes, which could lead to significant growth in the crypto market.

With the high 55% tax rate, many investors have been hesitant to enter the market. The fear of losing more than half of their profits to taxes has kept some people from participating. By lowering the rate to 20%, the government hopes to attract more investors, both from within Japan and abroad.

Additionally, a lower tax rate could also lead to more innovation in the cryptocurrency space. Japan already has a strong tech industry, and many believe that the country could become a leader in blockchain technology and cryptocurrency development if the tax system becomes more favorable. With a 20% tax rate, more companies might be encouraged to start crypto-related businesses in Japan, creating more jobs and opportunities.

Benefits of the Tax Reduction

One of the biggest benefits of the proposed tax cut is that it would make Japan’s tax system more competitive on a global scale. Countries like Singapore, Switzerland, and Portugal already have much lower tax rates for cryptocurrency, and Japan has been falling behind. With a 20% tax rate, Japan could become a more attractive destination for crypto investors and companies looking to expand.

The new tax policy could also benefit smaller investors who are interested in getting involved in cryptocurrency but are currently discouraged by the high tax rate. A flat 20% tax would be easier to understand and more manageable for these investors, making it more likely that they will choose to participate in the crypto market.

Furthermore, the lower tax rate could help stabilize the market by encouraging more long-term investment. With less of their profits going to taxes, investors may be more likely to hold onto their crypto assets for longer periods of time, rather than making short-term trades to avoid losing money to taxes. This could help reduce volatility in the market and create a more stable environment for both investors and businesses.

Challenges and Concerns

While many people in the cryptocurrency space are excited about the proposed tax cut, there are still some concerns that need to be addressed. For one, the government will need to make sure that the new tax policy is properly regulated to prevent tax evasion and other forms of fraud. With a lower tax rate, there is a risk that some investors may try to hide their earnings or engage in illegal activities to avoid paying taxes.

Additionally, some government officials are concerned about the potential loss of tax revenue. Japan’s high 55% tax rate has brought in significant revenue from cryptocurrency earnings, and lowering the rate to 20% could reduce that income. The government will need to balance the benefits of a lower tax rate with the potential costs of lost revenue.

Despite these challenges, most people agree that the current tax rate is too high and is holding back the growth of the cryptocurrency market in Japan. A more reasonable tax policy could help Japan become a leader in the crypto world, but only if the government takes the right steps to ensure that the new system is fair and well-regulated.

In the end, the proposed change to a 20% flat tax rate on cryptocurrency earnings in Japan could have a major impact on the market. If approved, it would likely encourage more investment, innovation, and growth in the country’s digital asset space.

Bitcoin

Whale Investor Accumulates $490M in Bitcoin as Market Awaits Fed Decision

by muhammed September 3, 2024

written by muhammed 5 minutes read

Whale Investor Buys 2,000 Bitcoin in 4 Days

A big Bitcoin transaction was noticed on September 2nd when an investor, often called a “whale,” bought 1,000 BTC for $57.3 million. This purchase came just four days after the same whale bought another 1,000 Bitcoin on Binance, one of the largest cryptocurrency exchanges. This brings the total number of Bitcoin accumulated by this investor to 2,000 BTC. Currently, this whale holds a total of 8,559 BTC, which is worth about $490 million.

Bitcoin Whale Activity and Market Impact

When a Bitcoin whale makes a big move like this, it often has a noticeable impact on the cryptocurrency market. The whale’s purchase happened during a time when the price of Bitcoin was dropping. Over the past week, Bitcoin’s price fell by nearly 8% as the market entered September. On August 29th, Bitcoin briefly reached $61,000 but then fell to almost $57,000 by September 1st.

Historically, Bitcoin has experienced losses in September. In fact, in six out of the last seven September months, Bitcoin has seen average losses of about 4.5%. This pattern has made September a challenging month for Bitcoin investors.

The Federal Reserve and Bitcoin’s Future

Bitfinex analysts have issued a warning that Bitcoin might face a significant drop of up to 20% due to uncertainty surrounding the Federal Reserve’s upcoming interest rate decision. The Fed’s actions can have a big influence on the cryptocurrency market. If the Fed decides to cut interest rates by 25 basis points, it could increase liquidity, which might lead to long-term gains for Bitcoin. However, if the Fed makes a more aggressive cut of 50 basis points, there could be an initial spike in Bitcoin’s price followed by a correction, as fears of a recession grow.

Bitcoin Outflows from Exchanges

Another factor that could affect Bitcoin’s price is the amount of Bitcoin being held on exchanges. Recently, the amount of Bitcoin held on exchanges dropped to its lowest level this year, which signals low market liquidity and reduced investor movement of coins. When there is less Bitcoin available on exchanges, it can lead to a bounce in Bitcoin’s price because there is less supply for buyers.

According to data from IntoTheBlock, centralized crypto exchanges saw a net outflow of over 16,500 Bitcoin, worth more than $1.01 billion, in the past seven days. On August 27th alone, around 2,200 BTC left these platforms. Most of these outflows occurred on August 27th when Binance, the largest cryptocurrency exchange by trading volume, experienced a net outflow of 48,000 BTC. This was worth over $3.7 billion in Bitcoin and Ethereum.

Potential Catalysts for Bitcoin’s Growth

Despite the recent price drops, there are some positive signs that could push Bitcoin’s price higher later this year. One potential catalyst is the weakening of the US dollar. When the US dollar loses value, it often leads to an increase in the price of assets like Bitcoin, as people look for alternative stores of value.

Another factor that could boost Bitcoin’s price is the rising US public debt. As the debt grows, some investors might turn to Bitcoin as a hedge against economic uncertainty. Additionally, positive signals from the options market suggest that there is still strong interest in Bitcoin, which could support its price in the future.

Understanding Bitcoin Whale Influence

Whale investors, like the one who recently bought 2,000 BTC, play a crucial role in the cryptocurrency market. Their large transactions can influence Bitcoin’s price and market trends. When whales accumulate Bitcoin, it often signals confidence in the future of the cryptocurrency, which can attract other investors to buy as well.

However, whale activity can also lead to increased volatility in the market. If a whale decides to sell a large amount of Bitcoin, it can cause the price to drop suddenly. This is why the actions of Bitcoin whales are closely watched by other market participants.

What to Watch in the Coming Weeks

As we move further into September, it will be important to keep an eye on several factors that could influence Bitcoin’s price. The Federal Reserve’s upcoming interest rate decision is one of the biggest events to watch. Depending on what the Fed decides, it could either support a recovery in Bitcoin’s price or lead to further declines.

Additionally, the continued outflows of Bitcoin from exchanges could reduce market liquidity and push prices higher. However, if these outflows continue, it might also indicate that investors are moving their Bitcoin into long-term storage, which could limit the supply available for trading.

Lastly, the general trend of the US dollar and the state of the US economy will also be key factors to watch. If the dollar continues to weaken and the US public debt keeps rising, it could create a more favorable environment for Bitcoin and other cryptocurrencies.

The recent whale activity, combined with broader market trends, suggests that Bitcoin could be in for a bumpy ride in the coming weeks. However, with potential catalysts on the horizon, there is also the possibility of a price recovery later this year. As always, investors should stay informed and be prepared for the volatility that comes with investing in cryptocurrencies.

Bitcoin

El Salvador’s Bitcoin Experiment: Success, Challenges, and Future Prospects

by dave September 3, 2024

written by dave 6 minutes read

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

Bitcoin Funds See $320M Outflow as Investors Bet on September Price Drop

by mei September 2, 2024

written by mei 5 minutes read

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.

Bitcoin

Bitcoin Whales Hoard Record 100+ BTC as Retail Traders Panic Sell

by muhammed September 2, 2024

written by muhammed 6 minutes read

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.

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