Cryptocurrency Market Weekly Review: Funding Rate Signals Rebound, Bitcoin Correlation with S&P 500 ClimbsThis week, the cryptocurrency market saw volatility, with Bitcoin's correlation with the S&P 500 reaching a 23-month high due to macroeconomic factors. Despite this, some institutions remain optimistic about the future of cryptocurrencies
Cryptocurrency Market Weekly Review: Funding Rate Signals Rebound, Bitcoin Correlation with S&P 500 Climbs
This week, the cryptocurrency market saw volatility, with Bitcoin's correlation with the S&P 500 reaching a 23-month high due to macroeconomic factors. Despite this, some institutions remain optimistic about the future of cryptocurrencies. Here's a summary of the key events in the cryptocurrency market this week:
Trading Activity and Market Sentiment
- The total trading volume of 11 US spot Bitcoin ETFs reached $711 million, the third lowest since their launch, reflecting declining market activity.
- A report by K33Research indicates that the funding rate metric suggests a market bottom and rebound in the coming weeks, offering hope to investors.
- Bitcoin trading volume reached $2.874 trillion in the first eight months, surpassing the trading volume during the 2021 bull market, demonstrating sustained interest in cryptocurrencies.
Macroeconomic Impact and Regulatory Dynamics
- Macroeconomic factors drove Bitcoin's correlation with the S&P 500 to a 23-month high, indicating a strengthening link between cryptocurrencies and traditional financial markets.
- Bitwise CIO expressed optimism about the future market trajectory, stating that cryptocurrencies will surge significantly as Q4 macroeconomic uncertainty subsides.
- Since 2013, the US SEC has levied $7.4 billion in fines on the cryptocurrency industry, signifying intensified regulatory scrutiny of the sector.
- Saxo Bank highlighted the potential impact of the US election on the market, potentially exceeding the influence of monetary policy, reminding investors to be aware of the political factors affecting the cryptocurrency market.
Technological Developments and Applications
- On-chain stablecoin trading volume on Ethereum reached a record high of $1.46 trillion, reflecting the thriving Ethereum ecosystem.
- Paypal and Venmo integrated Ethereum Name Service (ENS) support, enabling crypto payments, further expanding the application scenarios of cryptocurrencies.
- a16z plans to host the HACKUK hackathon next month, focusing on blockchain, digital identity, and other themes to drive innovation in blockchain technology.
- State Street Global Advisors (SSGA) launched three digital assets and disruptive technology ETFs, indicating growing interest in the cryptocurrency market from institutional investors.
Security Events and Criminal Activities
- Beijing police cracked down on an underground money laundering case involving the use of virtual currencies, with an estimated amount of 800 million yuan involved, reminding investors to be vigilant against criminal activity in the cryptocurrency space.
- The FBI reported that cryptocurrency-related security losses in the US exceeded $5.6 billion in 2023, reiterating the importance of cryptocurrency security.
Institutional Views and Market Predictions
- Victory Securities stated that Bitcoin may continue to fluctuate due to the impact of the US stock market decline, but the virtual asset market remains resilient, demonstrating confidence in the long-term prospects of the cryptocurrency market.
- believes that Bitcoin has surpassed the US stock market in decoupling from the dollar and gold, highlighting its growing status in the market.
In conclusion, the cryptocurrency market this week exhibited a complex and dynamic landscape. While macroeconomic factors and the regulatory environment present challenges, technological advancements, expanded applications, and increased participation by institutional investors offer positive support for the market. The future market trajectory will depend on various factors. Investors should closely monitor market developments and make informed investment decisions.
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