THE COIN STREET JOURNAL
Market News - September 10th 2024
THE PAST WEEK IN CRYPTO: MAJOR NEWS FROM BITCOIN, ETHEREUM, BINANCE, SOLANA AND RIPPLE
The past week has been filled with significant developments in the cryptocurrency world, with major news surrounding Bitcoin, Ethereum, Binance, Solana, and Ripple. The crypto ecosystem continues to be marked by innovation and regulatory challenges, making it both a dynamic and unpredictable space. Key highlights include Ethereum’s growing adoption, Ripple’s controversial political stance, Solana’s price struggles, Bitcoin’s hashrate performance, Mastercard’s crypto payment innovations, and groundbreaking technologies like Sui’s offline transactions.
Ethereum has been surpassing Bitcoin in terms of adoption, with a notable 3.3% increase in the number of holders, reaching nearly 127 million active addresses. This surge is driven by the growing popularity of smart contracts, decentralized finance (DeFi), and NFTs. In contrast, Bitcoin’s number of holders has remained stable at 54 million, with a slight drop of 50,000 addresses. Ethereum’s upcoming updates, aimed at addressing scalability and transaction fees, are expected to further strengthen its position in the crypto market, potentially overtaking Bitcoin’s dominance.
Ripple’s CEO, Brad Garlinghouse, has made waves by publicly supporting Kamala Harris in her U.S. presidential bid, alongside other business leaders. Garlinghouse hopes Harris will bring much-needed regulatory reform to the crypto space. However, this political stance has caused controversy among Ripple’s investors, with some fearing it could harm the company’s reputation and the value of XRP. In response, XRP saw a 2.78% decline in value, and the ongoing debate may exacerbate this drop if the backlash continues.
Solana has faced a turbulent period, with its price plummeting by 20% over eight days, marking nine consecutive days of decline. Stuck between $126 and $160, the crypto has failed to break through resistance levels, leaving investors trapped in uncertainty. While technical indicators suggest Solana may be oversold, analysts are divided on whether the cryptocurrency will recover or continue to decline. Investors are urged to remain cautious as the market’s volatility persists.
Bitcoin’s network resilience continues to impress, with its hashrate reaching 665 exahashes per second, just below its all-time high. This is despite increased mining difficulty and reduced miner revenue. Miners have managed to offset these challenges through high transaction fees, improved mining technology, and access to public stock market financing. However, economic difficulties raise concerns about the long-term sustainability of Bitcoin mining, with some suggesting that innovations like renewable energy and diversification into other sectors may be necessary.
Mastercard is making significant strides in crypto payments, launching a Bitcoin card that allows users to spend cryptocurrency directly without converting it to fiat currency. In partnership with Mercuryo, this new card can be used in over 100 million stores worldwide and offers users full control of their wallets. While there are fees associated with the card, its flexibility is seen as a major advancement for everyday crypto use. Mastercard’s efforts are part of a broader initiative to integrate cryptocurrencies into mainstream financial systems.
An exciting development comes from Sui, a blockchain developed by Mysten Labs, which has revolutionized payments by enabling transactions without an internet connection. By utilizing radio waves and alternative communication methods like GSM and satellite, Sui allows for financial transactions in areas with limited or no connectivity. This innovation holds great promise for extending financial services to the unbanked and those in remote areas, as well as potential applications in decentralized infrastructure and the Internet of Things (IoT).
CRYPTOCURRENCIES ARE SET TO INFLUENCE THE U.S. PRESIDENTIAL ELECTION
Cryptocurrencies are set to influence the upcoming United States presidential election as more US crypto investors become concerned with how candidates plan to regulate the industry. This marks the first time that crypto regulation has become a significant issue in a presidential campaign, with many voters now considering a candidate’s stance on the subject as a key factor in their decision. A recent report by Gemini, a crypto exchange founded by the Winklevoss twins, underscores the increasing importance of this issue in American politics.
According to the “Global State of Crypto” report released by Gemini on September 10, 2024, 73% of US respondents who currently own cryptocurrencies said that a candidate’s position on crypto would influence their vote in the November 2024 election. The survey, conducted between May and June 2024, gathered insights from 6,000 adults across the United States, the United Kingdom, France, Singapore, and Turkey. It highlighted the growing role that cryptocurrency policy is playing in the political sphere, especially in the US.
Among the findings, 37% of the US crypto owners stated that a candidate’s stance on crypto would have a “significant impact” on their vote, while 73% agreed it would have “some impact.” This indicates that a large portion of the crypto-owning electorate is increasingly motivated by how presidential candidates approach cryptocurrency regulation. The report also emphasized that this is the first time crypto has emerged as a notable issue in a presidential election, reflecting the evolving importance of digital assets in broader financial and political discussions.
One of the central concerns for current, past, and potential crypto investors is regulatory uncertainty, which is acting as a barrier to entering the market. The survey found that 38% of US respondents cited regulatory concerns as a reason for not investing in crypto, a notable increase from the 28% who shared the same concerns in 2022. This rising apprehension indicates that crypto regulation is becoming a major issue for both those within the industry and those considering entering it.
Despite these regulatory concerns, the survey also highlighted a growing trend toward increased interest in cryptocurrency among US investors. The number of people with no crypto exposure fell from 75% in 2022 to 65% in 2024, while the percentage of current crypto holders increased slightly from 20% to 21% during the same period. There was also a significant rise in the number of past crypto holders, jumping from 5% in 2022 to 14% in 2024, suggesting that interest in crypto continues to grow even in the face of regulatory uncertainty.
The report’s findings contrast with other recent data that suggested a decline in crypto usage among US adults. For example, the US Federal Reserve’s Survey of Household Economics and Decisionmaking found that only 7% of US adults reported using crypto in 2023, down from 10% in 2022 and 12% in 2021. This discrepancy points to a complex landscape for crypto adoption in the US, where regulatory concerns may be deterring new users while still fostering interest among a growing segment of the population.
Overall, as crypto becomes more integrated into mainstream finance, its influence on the political landscape is becoming clearer. Candidates in the upcoming presidential election will likely need to address crypto regulation and policy if they hope to appeal to the growing number of voters who are concerned about the future of digital currencies. This new dynamic presents both opportunities and challenges for candidates, as they navigate an increasingly tech-savvy electorate that is looking for clear policies on how to manage and regulate crypto assets.
The 2024 election marks a pivotal moment for the cryptocurrency industry in the US, as voters are now more invested in how political leaders plan to address the regulatory challenges surrounding digital assets. As the election approaches, crypto’s role in shaping voter preferences is likely to grow, underscoring the importance of this issue in the broader national debate.
BINANCE COIN (BNB) ATTRACTING SIGNIFICANT ATTENTION
The Binance Coin (BNB) has been attracting significant attention in the crypto market despite a recent 7% drop in value over the past week. Many traders remain undeterred by the decline and are taking long positions, anticipating a potential rebound in the coin’s price. However, the market reality is proving challenging, as risks of liquidation increase with the accumulation of long positions. These traders are hopeful for a recovery, but the downward trend continues to dominate.
Data on perpetual contract funding rates indicates that the number of long positions on BNB has been rising. Since August 28, 2024, positive funding rates have prevailed, showing a growing demand for long trades, even as the price of BNB falls. As of now, BNB’s value is around $501.87, continuing its steady decline. This rise in long positions suggests optimism, but the increasing liquidations suggest a more precarious situation.
Recent market figures reveal a significant disparity between long and short liquidations. On Wednesday, long liquidations hit $1.04 million, a stark contrast to the $250,000 in short liquidations. This highlights the vulnerability of long traders, as their positions are being liquidated at a much higher rate compared to those taking short positions, further emphasizing the risks involved in the current market conditions.
Technical indicators are also flashing warning signs for investors. BNB’s Relative Strength Index (RSI), a key momentum indicator, currently sits at 38.33, suggesting that selling pressure is outweighing buying interest. In addition, the Elder-Ray Index has been negative since August 27, signaling that sellers are in control of the market. These indicators paint a bleak picture, suggesting that further losses could be on the horizon if the bearish trend persists.
Despite the concerning technical indicators, some analysts remain cautiously optimistic. There are suggestions that BNB could rebound to $522.90, but this remains speculative, with no concrete signs of a turnaround. The market remains unpredictable, and the possibility of further declines cannot be ruled out, keeping traders on edge.
The continued interest in long positions on BNB underscores the high risk involved. Traders are essentially gambling on a recovery despite the declining technical indicators and ongoing liquidations. Given the current market dynamics, investors are being urged to proceed with caution, as the potential for losses looms large if the bearish trend continues.
One factor that could influence a price recovery is the upcoming BNB token burn. In the past, such burns have had a positive effect on the coin’s price. For instance, in July 2024, 1,643,698.8 BNB tokens, valued at around $971 million, were destroyed, which helped boost BNB’s value. Some traders are hoping that another significant token burn could help reverse the current downtrend.
In conclusion, while some traders continue to bet on BNB’s recovery, the market remains fraught with risks. Technical indicators are weak, and liquidation figures are high, suggesting a volatile environment. Although the possibility of a rebound exists, especially with an upcoming token burn, the immediate outlook for BNB remains uncertain, and investors are urged to stay cautious.
DONALD TRUMP AND HIS SONS TEASING WORLD LIBERTY FINANCIAL (WLF)
Donald Trump and his sons have been teasing a cryptocurrency project called World Liberty Financial (WLF), although details have remained vague. CoinDesk has obtained excerpts of the white paper for WLF, which reveals that it is a decentralized finance (DeFi) project, strikingly similar to Dough Finance, a blockchain app that was hacked for $2 million in July. Four individuals involved in WLF previously worked on Dough Finance. Barron Trump, at 18 years old, is named as the project’s “DeFi visionary.” The project also includes a new cryptocurrency called WLFI, a governance token.
The WLF project centers on decentralized borrowing and lending services, building on the Ethereum blockchain and DeFi platform Aave. However, the project has raised concerns as its early codebase, now deleted from GitHub, appears to have been copied directly from Dough Finance. It remains unclear whether vulnerabilities from the Dough Finance code were carried over to the WLF project, though this connection raises potential security and ethical concerns. The white paper suggests that WLFI’s transfer restrictions might make it difficult for speculators to trade the token, which could limit its market activity.
Several key figures associated with WLF have questionable pasts. Zachary Folkman, the head of operations, and Chase Herro, responsible for data and strategy, both previously worked on Dough Finance. Folkman also co-created Subify, a platform intended to compete with OnlyFans and Patreon, and once ran Date Hotter Girls LLC, a controversial dating advice platform. Herro, who has been involved in various business ventures, has a criminal history related to drug charges and has promoted his success as a “self-made businessman” on popular podcasts, including Logan Paul’s.
The Trump family has largely remained quiet about the specific details of WLF, though Donald Trump Jr. and Eric Trump have teased the project on social media under its original name, “The DeFiant Ones.” In the latest white paper, WLF has rebranded and is focused on a “credit account system” for decentralized borrowing and lending. Governance tokens like WLFI would allow users to suggest and vote on platform updates, including adding new blockchains or lending markets. However, the viability and security of the platform remain in question given its links to the hacked Dough Finance.
The leadership team of WLF includes a mix of Trump family members and others with experience in finance and tech. In addition to Folkman and Herro, other team members include smart contracts lead Octavian Lojnita, who also worked on Dough Finance, and Boga, a pseudonymous developer. Longtime Trump ally Steve Witkoff and his son Zach Witkoff are also involved. The project’s legal counsel includes Alex Golubitsky and Gabriel Shapiro, who will receive 1.3% of the WLFI token as compensation for their advisory services.
Folkman and Herro have had a long business partnership, working on various ventures like Subify and cryptocurrency education platforms. They have also operated “mastermind groups,” exclusive networking clubs with high fees. Herro, in particular, has a colorful past, including time in prison, and has been featured on several podcasts where he discusses his rise in entrepreneurship. Both Herro and Folkman have been deeply involved in the e-commerce space, teaching courses on how to succeed in the industry.
Trump’s pivot toward cryptocurrency marks a significant shift from his earlier stance. During his presidency, he was skeptical of digital assets, criticizing Bitcoin as “based on thin air.” Now, he is courting the crypto industry, with promises to make the U.S. the “crypto capital of the planet.” The move appears to be part of a larger political strategy, as Trump seeks to appeal to an industry that has donated substantial sums to the 2024 election cycle. His past NFT sales have also shown his willingness to engage with digital assets.
The broader political landscape around crypto is evolving, with Republicans, including Trump, positioning themselves as champions of the industry by promising to replace regulators and reduce legal risks for entrepreneurs. In contrast, Democrats are divided on the issue, with some lawmakers supporting clearer regulations, while others remain skeptical or hostile toward crypto. The 2024 election cycle has seen a surge in political contributions from the crypto sector, reflecting the growing influence of digital assets in shaping political discourse.