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Crypto Preservation Strategy: Where to Put Money During Inflation?

Capital preservation is a hot topic for all kinds of investors. Whether you invest in fiat or digital currency, you want to fully mitigate the risk of losing capital. This is when creating a wise capital preservation strategy comes into play. Where should I put my money during inflation? Does inflation affect cryptocurrency? Let’s dive deeper into the world of cryptocurrency and inflation and where you should put your money during inflation.

What is inflation?

Inflation is the rate at which the cost of goods and services in the economy rise. When inflation occurs, the purchasing power of money decreases, meaning each currency unit buys fewer products or services.

Inflation has vast economic implications. High inflation rates can affect central bank policies and consumer and business spending, discourage long-term financial planning, and erode the actual value of money. Controlled inflation is often considered a sign of a growing economy.

Before starting to plan your capital preservation strategy, it’s worth specifying the major types and causes of inflation, which are as follows:

- Demand-pull inflation occurs when the demand for goods and services exceeds the supply, leading to a price boost.
- Cost-push inflation occurs when businesses increase the prices of their goods and services due to increased production costs, thereby passing these costs on to consumers.
- Wage-price (built-in) inflation is caused by worker expectations of rising wages to cope with the rising living costs.
- Monetary inflation is caused by an increased money supply that outpaces economic growth, decreasing the currency's value and price growth.
- Hyperinflation is an extreme and rapid inflation with very high rates, often resulting in a loss of confidence in the currency.

The effect of inflation on investments



Inflation can significantly impact your crypto investment portfolio. Different investment assets react to inflation differently, and understanding those behaviors is one of the critical factors to consider while working on your capital preservation strategy.

- Inflation has a mixed effect on stocks—it can boost company profits due to higher prices or impact earnings due to decreased consumer spending. In moderate inflation, stocks typically perform well. However, challenges may arise in higher inflation scenarios.
- Bonds are more sensitive to inflation than stocks. With high inflation rates, bond prices fall due to diminished bond payments. Long-term bonds are especially vulnerable to inflation.
- Real estate property prices usually increase with inflation, making such investments more profitable during periods of high inflation.
- Commodities like gold and oil can also benefit from inflation. These assists are often considered a store of value that protects against the erosion of purchasing power during periods of high inflation.
- When it comes to cryptocurrency and inflation, the value of digital assets is not impacted much, mainly due to the unique characteristics of cryptocurrency.

Does Inflation Affect Cryptocurrency?

During inflation, crypto acts differently from fiat money. Unlike traditional currencies, the crypto market is characterized by its decentralized nature and dynamics of crypto assets, making it less vulnerable to inflation. However, this does not mean that inflation has no impact on cryptocurrency at all.

A common scenario when crypto prices are affected by inflation is the increased demand for digital assets when the purchasing power of traditional money is reduced. Due to their decentralized nature and limited supply, crypto coins can be considered a hedge against inflation. Increased demand causes crypto prices to rise.

On the other hand, opportunistic sentiment can have an impact on cryptocurrency during inflation. When fiat money loses its value, people are more inclined to keep their funds, including digital assets, making them more willing to sell their holdings. As soon as many crypto investors start selling their digital funds, crypto coins start losing value, resulting in a drop in crypto prices.

Market sentiment and investor behavior also significantly impact cryptocurrency prices during inflation. On one hand, cryptocurrency prices can grow when investors deem digital assets a hedge against inflation and bring more capital to the crypto market. On the other hand, crypto prices can fall if investors lose confidence in the stability of digital assets and start massively selling their holdings. Other factors such as market volatility, technological advancements and regulatory developments can also affect cryptocurrency prices during inflation.

Additionally, not all crypto assets react to financial inflation in the same way. Well-established digital assets with a large capitalization and widespread adoption, like Bitcoin, are more likely to benefit from increased demand during inflation. Newer crypto assets with a smaller market capitalization may be more vulnerable to market sentiment and changing investor behavior.

Investment in Stablecoins - Effective Capital Preservation Strategy



Stablecoins are now the preferred investment solution for people seeking less risky crypto investment opportunities. Backed by the US dollar or gold, stablecoins maintain their prices at more or less the same level, holding reserves with a value equal to the number of tokens available.

Investors may consider stablecoins as a means of exchange that can be accessed internationally, with transactions hitting the destination wallet in seconds. Besides, as an investment option, stablecoins are preferred to fiat currencies and commodities like gold for the following reasons:

- Lower transaction fees and faster transaction speed compared to traditional banking.
- Since the price of stablecoins is backed by the underlying assets, they are less likely to be affected by inflation because their price is proportional to inflation.
- Stablecoins are digital assets that are accessible to everyone with an internet connection. They can be bought and sold at any time.

Stablecoins are especially useful for people living in countries where hyperinflation has made their local currencies a dangerous form of money. These include Turkey, Argentina, Ethiopia, Lebanon, and Zimbabwe, with a whopping monthly inflation rate of 50%. Rather than holding their funds in fiat money, people can invest in stablecoins like USDT and BUSD to protect their capital from hyperinflation.

Capital preservation in the form of stablecoins allows users from countries with hyperinflation to protect their funds from inflation by holding them as stablecoins. Besides, they can make their shaving more profitable by benefitting from the underlying peg.

Where to Put Money During Inflation?

Crypto behaves better during inflation than fiat money. Although some crypto assets have failed because of fraud cases and security issues, many other digital assets have proven to be a wise investment opportunity for people looking to preserve their funds or even monetize their investments during uncertain periods of inflation.

When developing your capital preservation strategy during inflation, consider holding your funds in well-established assets such as Avalanche (AVAX), Polygon (MATIC), BTC, and ETH. These are several of the best crypto investment choices for the long term. In addition to holding funds in cryptocurrency, you can also use tools like staking to generate a passive income from your investment.

If you are more interested in capital preservation during inflation, consider holding your funds in stablecoins. Assets like USDT and BUSD are more inflation-resistant, mainly because these are pegged to the US dollar.

According to historical data, it can be a wise capital preservation strategy to invest in cryptocurrency now while trading close to significant support levels and keep them as an inflation hedge.

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Top 10 Cryptocurrencies with the Best Technology Underneath

There are over 20,000 cryptocurrencies in circulation on the modern web. Each digital asset has its history and a team behind it. Whenever a new crypto asset is released, we examine its features. What about cryptocurrencies with the best technology underneath the hood? We've decided to share a round-up of such coins utilising the best crypto technology. Let's dive in!

What is the best crypto technology?

Digital assets with the best crypto technology excel in security, scalability, interoperability, and real-world applications. While there is no definitive ranking, cryptocurrencies like Bitcoin, Ethereum, Cosmos, Solana, and Monero are often cited as leaders in technological innovation and real-world adoption. However, the "best" cryptocurrency ultimately depends on the user's or application's specific needs and priorities.

Here are several factors letting us assume we deal with digital assets adopting the best crypto technology:

- Security is one of the significant considerations as it protects users' funds and the blockchain network's integrity. Coins employing robust cryptographic techniques are considered the safest cryptocurrencies with the best technology. For example, Bitcoin's SHA-256 algorithm and Monero's use of ring signatures for privacy are considered technologically advanced.
- Another vital factor to consider is the scalability of crypto projects. Scalability refers to the ability to handle many transactions per second. Some of the top crypto coins that improve scalability and reduce transaction time are Ethereum, with its planned transition to Proof-of-Stake, and Solana, which has a Proof-of-History consensus mechanism.
- Interoperability, which refers to the capacity of different blockchain networks to communicate and interact, is another factor to consider. Cosmos, with its "internet of blockchains" approach, and Thorchain, which facilitates cross-chain asset exchanges, are examples of cryptocurrencies focused on interoperability.
- Digital assets that have successfully integrated with traditional financial systems or have found practical applications in various other industries demonstrate their technological advancements. One of the most vivid examples of such crypto assets is Ripple due to its partnerships with financial institutions and Ethereum due to its dominance in dApps.

Besides the aforementioned factors, you may also examine other criteria to define cryptocurrency with the best technology, such as:

- Checking out technical insights concerning a specific crypto asset in its official white paper
- Exploring the crypto project's roadmap and plans
- Analysing the #DevelopmentTeam  and their experience in the blockchain industry
- Evaluating technological features of the chosen crypto asset, like checking whether the project uses a consensus mechanism, has implemented solutions to enhance transaction speed and capacity
- Gathering data on transaction volumes, network activity, and user engagement using tools like Glassnode and Binance Research
- Seeing if the project has a robust and active community, which can positively indicate a cryptocurrency's potential.

Top 10 cryptocurrencies with the best technology

The cryptocurrencies listed below are recognised for their market presence and innovative technologies that address various challenges in the blockchain ecosystem. Let's review what makes them fit our chart of the top 10 cryptocurrencies with the best technology.

Bitcoin (BTC)

Bitcoin is the first cryptocurrency and remains a market capitalisation and security leader. Its decentralised nature allows for peer-to-peer transactions without intermediaries, making it a strong store of value despite scalability challenges.

While Bitcoin faces challenges like price volatility, regulatory uncertainty, and scalability issues, its technological strengths, security features, and widespread adoption confirm its status as a leading cryptocurrency.

Bitcoin (BTC) is considered one of the best crypto coins to buy due to its decentralised blockchain network that allows secure, peer-to-peer transactions without intermediaries, ensuring user control and resistance to censorship. Its widespread adoption by merchants and businesses globally, combined with its capped supply of 21 million coins, creates scarcity that enhances its value as a digital store of value and hedge against inflation. Bitcoin's robust security and proven track record further solidify its position as a dominant force in decentralised payments despite challenges like price volatility, regulatory uncertainty, and scalability issues.

Ethereum (ETH)

Known for its smart contract capabilities, Ethereum enables the development of decentralised applications (dApps). Its ongoing upgrades, including Ethereum 2.0, aim to enhance scalability and reduce transaction costs, solidifying its position in the crypto ecosystem.

Technological features, like smart contracts, the transition to PoS, a large ecosystem, interoperability through Layer 2 solutions, and strong security make Ethereum one of the cryptocurrencies with the best technology. Its innovative approach continues to attract developers and users, solidifying its position as a cornerstone of the blockchain industry.

Solana (SOL)

Solana is recognised for its high throughput and low transaction fees, achieved through its innovative Proof-of-History consensus mechanism. This technology allows thousands of transactions per second, making it suitable for high-demand applications.

While Solana has faced some challenges, such as network outages, its technological innovations and real-world applications demonstrate why it is considered one of the most promising and best cryptocurrencies for long-term investment. Its combination of speed, scalability, and cost-effectiveness is unmatched by its competitors.

Cosmos (ATOM)

Cosmos focuses on interoperability between blockchains, allowing them to communicate and share data. Its unique architecture promotes scalability and customisation, making it a significant player in the blockchain space.

The combination of interoperability, scalability, modular architecture, energy-efficient consensus, and community governance makes Cosmos a standout project in the cryptocurrency space. Its innovative approach addresses blockchain technology's key challenges, positioning it as a leading platform for building interconnected and efficient blockchain applications.

Cardano (ADA)

Cardano is known for its research-driven approach and a strong emphasis on security and sustainability. It employs a Proof-of-Stake consensus mechanism to provide a scalable and interoperable platform for dApps and smart contracts.

Cardano's scientific approach, energy-efficient PoS consensus mechanism, robust smart contract capabilities, multi-layer architecture, and focus on interoperability contribute to its reputation as one of the top cryptocurrencies with advanced technology. These features enhance the platform's scalability and security and position Cardano as a significant player in the evolving blockchain landscape.

Chainlink (LINK)

Chainlink provides decentralised oracles that enable smart contracts to access off-chain data securely. This technology is crucial for the functionality of many dApps, particularly in the DeFi space.

Chainlink's decentralised oracle network, secure data transmission, wide range of data sources, decentralised consensus, and reputation system make it a standout cryptocurrency in terms of technological innovation and real-world applicability. Its ability to bridge the gap between blockchain technology and real-world data has positioned Chainlink as a crucial component in developing and adopting decentralised applications across various industries.

Ripple (XRP)

Developed by Ripple, XRP facilitates fast and cost-effective cross-border payments. Its consensus algorithm allows for quick transaction confirmations, making it a strong contender in the payment sector.

Technological features like speed, low costs, scalability, environmental sustainability, a unique consensus mechanism, predictable supply, and institutional adoption make XRP one of the top cryptocurrencies with the best technology. Its design explicitly addresses the financial services industry's needs, positioning it as a critical player in the evolving landscape of digital assets.

Thorchain (RUNE)

Thorchain aims to solve cross-chain asset exchanges without intermediaries, functioning as a decentralised liquidity network. Its focus on security and innovative economic model enhances its potential in the DeFi landscape.

Thorchain's innovative approach to decentralised cross-chain trading, combined with its AMM model, dual token system, PoS consensus, continuous liquidity pools, and robust security measures, positions it as a leading cryptocurrency in the DeFi landscape. These technological advancements enhance the user experience and promote greater liquidity and efficiency in the cryptocurrency market.

Monero (XMR)

Monero is a privacy-focused cryptocurrency that employs advanced cryptographic techniques to ensure transaction anonymity. Its commitment to privacy and security makes it a leader in the privacy coin sector.

Monero is a privacy-focused cryptocurrency designed to obscure transaction details, making tracing funds' origin, amount, and destination nearly impossible. It achieves this through advanced cryptographic techniques such as ring signatures, stealth addresses, and RingCT. Monero's decentralised structure, utilising the ASIC-resistant RandomX Proof-of-Work algorithm, ensures secure and decentralised mining. Its privacy features contribute to its fungibility, meaning each unit is indistinguishable from another, preventing discrimination or blacklisting.

Monero boasts an active #DevelopmentTeam  and a strong community, with regular updates to enhance security and features. Its real-world applications include protecting sensitive financial transactions, facilitating cross-border payments, and enabling microtransactions. Despite concerns about potential misuse, Monero advocates for privacy as a fundamental human right and supports legitimate uses of its technology.

Algorand (ALGO)

Algorand is designed for high-speed transactions and scalability. Its technology supports various applications, including DeFi and NFTs, and it utilises a unique consensus mechanism that promotes efficiency.

It achieves high scalability, processing 10,000 transactions per second (TPS) and providing instant finality, meaning transactions cannot be reversed once confirmed. Algorand's decentralised governance model involves ALGO holders in decision-making, fostering community participation. The platform supports multiple programming languages and offers tools like AlgoKit 2.0, making it developer-friendly and encouraging innovation. Algorand's growing ecosystem spans various sectors, including finance, supply chain management, and real estate, with notable partnerships demonstrating its capability for real-world applications.

If you're interested in trading cryptocurrencies with the best technology, explore the StormGain trading platform (https://stormgain.com/). We offer a variety of coins for trading, along with features like free Bitcoin mining and secure wallets.

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How crypto funds survived 'Black Monday'

On 5 August, financial markets saw a mass sell-off of assets, ranging from stocks to precious metals. The VIX volatility index, also known as the Fear and Greed Index, jumped to its highest point since the coronavirus pandemic.


Image source: bloomberg.com

There were two primary reasons for this. The first is that Japan raised its key interest rate to 0.25% for the first time since 2006, which resulted in carry trades losing their previous appeal. The strategy for this kind of trade was to take out loans in Japanese yen at near-zero interest rates and exchange the yen for US dollars to buy US stocks and bonds. The increased interest rate made loans more expensive and strengthened the yen. After this, carry traders began liquidating their positions.

The second reason was that falling tech sector returns and disappointing US economic data for July led to a reassessment of risks. The Sahm Rule, developed by former Federal Reserve and White House economist Claudia Sahm, exceeded the crucial 0.5% threshold. Historically, this indicator has been surprisingly accurate at predicting economic downturns.


Image source: x.com/Dillon_Valdez

We see that the flight from risk and falling financial assets are based on objective reasons. What's more, fundamental factors for cryptocurrencies remained in the green zone. These include increased recognition around the world, the impact of new ETFs in the United States, the introduction of MiCA in the EU, and the increase in the number of companies with crypto reserves.

As such, the future movement of Bitcoin and Ethereum largely depends on investors' resistance to panic attacks. US spot ETFs, a key driver in 2024, have seen an outflow of $406 million in the past two days. However, that's far from the record-high seen on 1 May, when the indicator hit $564 million.


Image source: StormGain infographic

Things with spot Ethereum ETFs are even more interesting. Investors in this type of product bought the dip on 5 August.


Image source: StormGain infographic

However, Ethereum has reacted to recent events much worse than Bitcoin. We have repeatedly warned that the altcoin's movement will continue to lag behind the pioneer cryptocurrency's. This is, first and foremost, due to the large weight Grayscale has and the natural negative net inflow since the ETFs launched.


Image source: StormGain Cryptocurrency Exchange

Leading market makers' sell-off of coins also negatively impacted Ethereum. In one day, Wintermute got rid of 47,000 ETH, while Jump Trading sold 36,000 ETH, worth a combined $250 million. The value of ETH staked in DeFi fell by 2.4 million ETH or $6 billion in one day.


Image Source: defillama.com

Meanwhile, Ethereum ETF investors saw the altcoin's 48% decline from its March high as a great opportunity to build on their positions. They posted a net inflow of $48.8 million on Monday.


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While some panic, others buy up Bitcoin

This week, Bitcoin saw its most serious correction in the current bull cycle, dropping to $50,000 per coin. That's an over 32% drop from its record high.


Image source: glassnode.com

The sharp drop, exacerbated by talk of a US recession and the rise in geopolitical tensions, panicked some investors. On 5 August, the spot market saw realised losses of $1.4 billion. That's the 13th-largest sell-off in Bitcoin's history in dollar terms.


Image source: glassnode.com

One extremely curious aspect is that only short-term holders (STH) panicked. They accounted for 97% of the losses.


Image source: glassnode.com

Long-term holders (LTH), on the other hand, not only showed restraint but actually increased their positions by taking advantage of relatively low prices. Over the past 30 days, the total volume of permanent holder addresses (two incoming transactions and no outgoing ones; ETF addresses are excluded) jumped to a record-high 404,400 BTC or $22.8 billion.


Image Source: x.com/ki_young_ju

Traders saw opportunities and increased their net inflow into crypto exchanges. For the largest of them, Binance, the indicator this week was $1.8 billion. This once again emphasises the absence of an all-out panic since days when panic hits the platform always result in a net outflow. Unfortunately, Binance CEO Richard Teng didn't specify whether the inflow primarily consisted of fiat (which indicates buying) or cryptocurrency (which signals selling).


Image source: x.com/_RichardTeng

The key difference in behaviour between STH and LTH is their timeline for planning. The former usually don't hold coins for longer than two months, even in rising markets, and undergo sharp mood swings. LTH, however, focus on long-term trends. They accumulate coins during corrections and take profits as the asset rises to new highs.

Bitcoin's prospects remain good despite the higher risk of a recession in the United States. The government still hasn't reoriented itself to combat the deficit, and the rise in unemployment will force the Federal Reserve to return to stimulating the economy ahead of schedule. That means that new liquidity injections are coming.


Image source: StormGain Cryptocurrency Exchange

As Bitmex co-founder Arthur Hayes said, "Both the Trump administration or Harris administration will print [fiat]... The Bitcoin price in this cycle is going to go very, very high. Hundreds of thousands of dollars, maybe $1 million."


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Leading mining companies' total costs exceed Bitcoin's value

Bitcoin has fallen by more than 30% from its record-high price, with mining difficulty jumping by 10.5% during the last correction. Publicly traded mining companies have found themselves in a hard spot.

Mining difficulty is adjusted every fortnight, depending on the total power of the rigs involved in mining. Adjustments are necessary to maintain the mining rate of one block every 10 minutes. On 31 July, difficulty rose by 10.5% in one go, the biggest jump since October 2022.


Image source: coinwarz.com

At the same time, Bitcoin's price began to correct, collapsing to $49,000 on 5 August.


Image source: StormGain Cryptocurrency Exchange

Even after the price partially recovered, yields from petahesh capacity are still near an all-time low and now stand at $41/day.


Image source: hashrateindex.com

According to the head of the analytical firm CryptoQuant, Ki Young Ju, with such profitability, the average cost of mining one coin is $43,000. The calculation is based on the performance of leading mining company Marathon Digital for Q2 2024.


Image Source: x.com/ki_young_ju

It may not seem that bad, but these calculations don't take into account payments on loans taken out earlier to build mining centres and purchase ASICs, as well as all sorts of administrative costs. TheMinerMag has calculated the cost of Bitcoin mined in July for the largest mining companies, including associated costs.


Image source: theminermag.com

It turns out Marathon and Riot are operating at a loss, which is reflected in their financial reports for the past quarter. This is a consequence of both increasing difficulty and falling revenues as a result of the halving.


Image source: investing.com

Both companies continue to accumulate coins in anticipation that Bitcoin's price will rise significantly and return net profits in the future. Core Scientific followed the same vision until 2022, but the subsequent bear phase drove the company into Chapter 11 bankruptcy (business reorganisation).

The above metrics help answer the simple question of whether to invest in mining companies or buy Bitcoin directly.


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Cryptocurrencies recover after Monday's market meltdown. What happened?

Bitcoin (BTC) soared past $56,000 early Tuesday, leading a broader market rebound in Asia as investors capitalised on Monday's sharp price drop. As BTC surged by 6%, marking its most significant 24-hour increase since May, it appeared to spark a market-wide recovery, with Ethereum (ETH) and Ripple (XRP) climbing 8%. Notably, Solana (SOL) led the pack, recovering 31% after the so-called 'Black Monday'.

Even as markets shake off the water from Monday's plunge, traders are left reeling from the impact. What just happened? What to do?

How the bank of Japan caused a worldwide storm

Calling to mind an old saying about butterflies and hurricanes, the sharp decline experienced by the cryptocurrency market can be traced to a seemingly unrelated incident. It was sparked by the rising fortunes of a fiat currency — specifically, a sudden surge in the value of the Japanese yen.

This surge followed the Bank of Japan's unexpected increase in interest rates on short-term government bonds on 31 July, ending a long-standing low-interest rate policy of over 17 years. This slight rise of 0.1% to 0.25% made large yen-denominated loans, which many traders had used for leveraged investments, significantly more expensive. Institutional investors who had borrowed yen at close to zero interest rates to finance other investments, so-called 'yen carry trades', panicked.

This led to massive sell-offs. Japan's Topix 100 index experienced its biggest drop since 2011, while Bitcoin's price in yen plummeted nearly 15%, a steeper decline than its dollar-denominated price on Western exchanges.

The entire crypto market saw a $510 billion drop in total market capitalisation, with the majority of top tokens wiping out their hard-won gains of 2024.

However, the impact went far beyond the crypto sector. Global stock markets took a nosedive as billions of dollars were wiped out, with even tech giants such as Microsoft, Meta, Apple, and Google suffering losses upwards of 5%.

The Japanese yen wasn't the only factor shaking the stock market. The latest US employment figures and monthly job report (released on the first Friday of every month) indicated that the American economy was in weaker health than previously believed. At the same time, the Federal Reserve decided to hold interest rates high at 5.3%, further concerning investors about the state of the economy. Rising tensions in the Middle East contributed to a feeling of unease in the market.

The leverage-fueled trading environment, with open interest peaking at nearly $40 billion, exacerbated the situation, causing widespread liquidations and losses. However, some analysts believe this market correction could be beneficial in the long run, as it forces traders to reduce high-risk positions. There is also speculation that potential rate cuts in the US and Japan might stabilise the markets and potentially lead to a sustained recovery in the crypto sector.

Recovery or recession?

In Japan, the Topix 100 index rose by about 10% as the yen weakened against the US dollar, breaking a five-day upward streak. Futures linked to the S&P 500 gained 1.5%, while the Nasdaq 100 rose by 2.1%. The potential for quicker Federal Reserve rate cuts following Monday's global market downturn has seemingly revived risk appetite among investors.

Despite the recent gains, some market analysts urge caution regarding the sustainability of the rally in major cryptocurrencies. Even if Bitcoin and the crypto sector bounce back after the initial shock, they could still face headwinds due to ongoing pessimism in broader markets.

Crypto traders can't ignore the stock market

Although cryptocurrency was conceived as an alternative to the international fiat currency system and mainstream financial markets, recent years have proved that traditional markets and digital assets are deeply tied.

The recent popularity of spot ETFs for Bitcoin and Ethereum has only strengthened this bond. Institutional investors reacted to the turmoil by offloading spot BTC exchange-traded fund (ETF) holdings, resulting in a heavy trading day on Monday. US-listed crypto products saw $168.4 million in net outflows, bringing total withdrawals to over $300 million for the month.

This means that crypto traders need to keep up to date with the stock market and currency exchanges in addition to crypto, carefully feeling out investor sentiment in the wider economy.

Catching the rebound: strategies for crypto market volatility

Although the characteristic volatility of crypto markets has traditionally put off institutional investors, the rapid and dramatic highs and lows of digital assets are exactly what makes them exciting for retail traders and enthusiasts. With that in mind, let's look at some strategies, opportunities, and positive indicators for crypto trading in the current market correction.

Buying the dip

During the recent market downturn, large Bitcoin holders, known as whales, increased their holdings, consolidating their positions while smaller investors sold off their assets. Given that Bitcoin has steadily increased in value over the years, hitting new all-time highs after dips, keeping a calm head in a crisis can be an opportunity to snap up BTC or other tokens at a discount.

Options trading

Even if you're pessimistic about prices, you can still profit in a falling market. StormGain offers crypto options trades that allow traders to position themselves to take advantage of price dips. In falling markets, traders can profit from long put options by selling the asset at a higher strike price than its current market value, while short call options generate profit through premiums if the market price stays below the strike price. Additionally, options can serve as a hedge to protect against losses by offsetting declines in the underlying asset's value.

Ethereum could break out to 100% gains

Ethereum is showing a strong rebound from its recent eight-month low, mirroring a pattern from October 2023 that led to a significant price increase. If the current trend continues, ETH could potentially rally over 100% to reach around $4,560, driven by technical indicators and the expectation of US Federal Reserve rate cuts, which may shift investor interest towards riskier assets.

Trade cryptocurrencies with StormGain, the premier platform for all market conditions

For those looking to navigate the volatile cryptocurrency markets and come out on top, StormGain offers an unbeatable trading platform.

Key features and unique advantages of StormGain include:

- Intuitive interface: Enjoy the easy-to-use platform designed for traders of all experience levels.
- iOS and Android apps: Have convenient access to the top cryptocurrencies on the go.
- Advanced crypto assets: Trade call and put options, crypto indices, and tokenised stocks.
- Competitive fees: Take advantage of low-cost trading to maximise your returns.
- Full suite of trading tools: Employ advanced analytics and tools for market analysis and decision-making.
- Secure trading environment: Get protection from state-of-the-art security measures to guard your assets and data.
- Passive income stream: Use the built-in Bitcoin cloud miner that rewards users with free BTC just for using the platform.
- 24/7 customer support: Rest assured with round-the-clock assistance in multiple languages to ensure a smooth trading experience.

Don't miss out on the opportunities in the cryptocurrency market. Take just a few seconds to sign up with StormGain today and try a demo account to start your crypto trading journey! (https://stormgain.com/)

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Bitcoin's crypto market share hits highest point since 2021

The major cryptocurrency's share of the digital asset market has reached its highest in three years at 55.9%. Altcoins' market share continues to gradually decline.

Bitcoin hit its lowest market share in 2018 when it stood at just under 33%. It reached another local low in 2022 at 38%. Since then, this figure has risen, reaching its previous high in 2021, when Bitcoin accounted for more than 60% of the market. On average, Bitcoin's share during these years has fluctuated between 40% and 50%, mostly staying within that range.


Image source: coinmarketcap.com

The number of liquidations per day has also fallen to around 700 million from more than $1 billion at the time of Bitcoin's biggest price drop-off.


Image source: coinglass.com

Bitcoin's market capitalisation has now increased to $1.2 trillion, while the crypto market's total capitalisation sits at just over $2 trillion. In other words, altcoins only account for about $800 million.


Image source: coinmarketcap.com

Bitcoin's price has been rising in mid-August after experiencing a collapse earlier in the month triggered by sell-offs in Asian stock markets. At that time, the pioneer cryptocurrency's price temporarily dipped below the $50,000 mark, showing its sharpest drop since 2021. Since then, Bitcoin's value has returned to the psychologically important $60,000 mark as part of a corrective rise.


Image source: StormGain Cryptocurrency Exchange

According to market participants' optimistic predictions, Bitcoin could soon rise to above $70,000. If that happens, it will pull altcoins up with it, most notably Ethereum, which has a good chance of reaching $4,000 again. Nevertheless, Bitcoin's market share is likely to remain at its highest point in recent years and is unlikely to fall below 50% anytime soon.


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Crypto market navigates choppy waters amid macro turmoil

Cryptocurrencies struggled to maintain upward momentum this week as the global stock market faces instability stemming from geopolitical events and economic figures. Macroeconomic events — such as the Bank of Japan raising interest rates, international conflicts, and fears of an imminent global recession — set off a chain reaction of panic across markets. This sense of unease amongst investors sparked a sell-off of perceived 'risk assets', including cryptocurrencies and tech stocks. However, there are signs that the market is beginning to stabilise as extreme leverage and positioning are being purged from the system, suggesting a calmer period is just around the corner.

Let's take a look at how major cryptos are faring this week and what traders can do to protect their gains and find opportunities in a difficult macroeconomic environment.

Bitcoin falls to $58K following US CPI data, drags major altcoins down

Traders watched with bated breath as crypto assets dropped at the start of the week before rising on Wednesday, only to fall again on Thursday. Bitcoin (BTC) experienced a sharp decline, dropping over 4% to around $58,000, triggering a broader downturn in the cryptocurrency market. Other major cryptocurrencies such as Ethereum (ETH), Solana (SOL), and Ripple (XRP) also saw losses, though slightly less severe, ranging from 2.5% to 3.8%.

The drop in Bitcoin's price occurred after the US released its Consumer Price Index (CPI) data for July. The CPI showed a 2.9% year-on-year increase, aligning with expectations, and marked the first time since 2021 that inflation had fallen below 3%. Despite positive reactions in the stock market, with the Nasdaq and S&P 500 closing in the green after an early sell-off, Bitcoin continued to decline.

Economic figures such as the US CPI, employment data, and interest rates have become key indicators to watch for crypto traders, even the diehard idealists who strongly wish to do away with the dominance of fiat currencies like the US dollar. Various analysts, from institutional investors to crypto community influencers, have acknowledged that cryptocurrency prices have become increasingly reactive to US economic data as investors seek safer assets over more volatile ones.

Some market observers predict that Bitcoin could fall further to around $55,000 in the short term before potentially rebounding. They point to significant downward pressure as over $1.4 billion in BTC options are set to expire on 16 August, potentially pushing its price below the $56,000 support level unless it recovers above $60,000. Others, however, point to signs of the Federal Reserve easing its monetary policy as a potential catalyst for Bitcoin to rise back up to $66,000.

The week in crypto ETFs

In the ETF market, US-listed spot Bitcoin exchange-traded funds saw $81 million in net outflows on Wednesday, breaking a two-day streak of positive inflows. Grayscale's GBTC was the hardest hit, with $56 million in outflows, followed by Fidelity's FBTC, which lost $18 million. Ark Invest's ARKB and Bitwise's BITB also recorded losses of $6.7 million and $5.7 million, respectively. However, Franklin Templeton's EZBC and BlackRock's IBIT bucked the trend, posting a combined $6 million in inflows.

Ether ETFs performed better, with $10 million in net inflows, continuing a three-day positive streak. BlackRock's ETHA led the gains with $16 million in inflows, while Grayscale's ETHE saw $16 million in outflows. Other Ether products, including Grayscale's mini Ether trust, Fidelity's FETH, and Bitwise's ETHW, collectively gained $11 million in inflows.

One positive sign for the health of the crypto market is the recent news that finance giant Goldman Sachs revealed in a recent 13F filing that it holds over $400 million in Bitcoin ETFs, despite earlier scepticism about cryptocurrency. The bank owns positions in seven out of the 11 BTC ETFs available in the US, with its largest investment being $238.6 million in the iShares Bitcoin Trust (IBIT). This shift in strategy marks a significant change, as Goldman Sachs had previously stated that it did not consider crypto a viable investment asset.

How to be the calm in the storm

Volatility, the likes of which we have seen this week, is nothing new to seasoned crypto traders but may be disturbing to newbies who are just coming to grips with the unpredictability of markets. As experienced traders with spare assets to play with will buy on dips and sell on rallies, a conscientious crypto trader should plan for a five- to ten-year investment horizon and not become too emotionally invested in daily price fluctuations.

The history of crypto market cycles over the past 14 years has still managed to deliver unprecedented returns for crypto investors, while long-term trends like the 200-week moving average can provide a better perspective on a token's overall health than daily movements.

Bitcoin, Ethereum, and major altcoins have already bounced back from the 30%+ drawdowns they saw as panic gripped the markets last week. For savvy traders, these dramatic dips presented attractive buying opportunities.

Trading during periods of volatility is a game of buying at lows and selling at peaks, and getting caught up in investor panic can trap you into doing the exact opposite! Instead, try to assess whether the reasons behind a price drop undermine your original investment thesis. If the fundamentals remain intact, then it may be time to buy the tip and enjoy the potential for greater returns in the future.

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AI and Blockchain Synergy: Future Opportunities Explored

AI and blockchain are the two most talked-about technologies of the modern age. Though relatively young, they have evolved rapidly and continue to improve and gain new opportunities and forms of use, making all aspects of our lives, work, and leisure more fun, productive, and usable. The intersection of AI and blockchain technology is a topic we couldn't have passed by.

The global blockchain AI market has seen significant growth and is projected to continue expanding. According to the report shared by ResearchAndMarkets.com, "The global blockchain AI market grew from $0.39 billion in 2022 to $0.48 billion in 2023 at a compound annual growth rate (CAGR) of 25.1%. The blockchain AI market is expected to grow to $1.18 billion in 2027 at a CAGR of 25.2%."

The blockchain and artificial intelligence synergy offers many advantages, including blockchain automation, transparency, security, and enhanced customer experience. Integrating AI and blockchain can also enhance business processes by improving efficiency and streamlining operations. This guide discusses the fundamentals of using artificial intelligence in blockchain, digs deeper into learning the AI and blockchain synergy, and highlights the major opportunities and use cases related to the intersection of AI and blockchain.

Understanding AI and blockchain

Before discussing the opportunities and use cases of using artificial intelligence in blockchain, let's start with the fundamentals.

AI and blockchain are two technologies that have revolutionised diverse industries.

- AI (artificial intelligence) is a simulation of human intelligence provided by machines, which use LLM (large language models) and NLP (natural language processing) so that a human explains their request to the machine, which can produce everything from writing texts to code and completing complex automation tasks. AI models benefit from blockchain's transparency and security, enabling decentralised training, data provenance, and privacy protection and fostering innovation and trust in AI applications.
- Blockchain is a distributed ledger technology that securely records transactions across a network of computers. Effective data usage within blockchain systems is crucial for providing actionable insights, enhancing trust, and ensuring a transparent data economy by leveraging AI capabilities to optimise data management and scalability.

Both technologies let you achieve impressive results when used independently. What if you had a chance to combine using blockchain and AI in crypto trading?

- When used in trading, AI performs the tasks that typically require human input, like analysing vast amounts of data to detect patterns and trends and make correct decisions at the right time. Using artificial intelligence, crypto traders significantly increase the speed and efficiency of decision-making. Besides, AI has also led to the development of high-frequency trading strategies that capitalise on market fluctuations.
- Blockchain is a decentralised system that ensures the security and transparency of digital transactions. Its technology ensures that all crypto transactions are securely recorded and cannot be altered retroactively. When trusted by crypto trading platforms, blockchain reduces risks and enhances trust among market participants.

AI and blockchain synergy for crypto traders

Now that we know the basics, let's explore how crypto traders can benefit from using AI and blockchain in synergy. A merger between AI crypto and blockchain delivers more secure and transparent systems for enterprises and businesses of all scales. AI's real-time data analysis and decision-making capabilities expand blockchain's automation capabilities. Both technologies complement each other in many ways, like:

1. When embedded in smart contracts, AI optimises the automation of supply chain processes.
2. AI can analyse large amounts of data quickly, while blockchain's decentralised nature allows for collecting and storing information from different sources. When used together, AI and blockchain allow traders to access and analyse previously inaccessible data, leading to better trading decisions. AI crypto projects are particularly noteworthy for their potential to drive significant growth in the crypto trading space.
3. The decentralised nature of blockchain ensures that all data gathered and analysed by AI remains safe and trustworthy.
4. Crypto artificial intelligence and AI synergy provide the level of transparency and trust the trading world was missing. While blockchain is responsive to the accuracy of trading data, AI algorithms provide intelligent insights and predictions. When used together, both technologies enhance trading efficiency and reduce the risk of fraud.
5. Besides, AI and blockchain let traders make split-second decisions based on up-to-date information.

AI in blockchain opportunities

AI and blockchain undoubtedly bring impressive opportunities to our society and the crypto industry, especially in their ability to enhance data security. Generative AI enhances AI model development and deployment within blockchain systems. Let's consider several promising AI and blockchain opportunities we shouldn't miss.

Fraud detection

Cybersecurity is one of the major concerns for everyone working online, mainly traders and everyone dealing with finance. Cyberattacks can disrupt blockchain networks. With an AI-powered fraud detection feature, blockchains can be safeguarded from potential security threats. Artificial intelligence is capable of managing such fraud detection features as:

- Detect suspicious activities by analysing transaction patterns in real time
- Prepare for potential cyberattacks by triggering real-time alerts and securing encrypted data
- Blocking vulnerabilities such as short address attacks and timestamp dependence, among other things, will minimise attacks on smart contracts.

Additionally, blockchain technology enables the exchange of encrypted data simultaneously among various parties, enhancing trust and efficiency.

AI-powered smart contracts

Smart contracts are self-fulfilling digital contracts with pre-established rules and governing principles. A decentralised AI platform can enhance data privacy and protection within AI-powered smart contracts by utilising technologies such as secured multi-party computations, GAN cryptography, and homomorphic encryption. AI can make smart contracts more impactful by optimising their code for reduced costs, better testing and verification procedures, enhanced analysis and auditing, and improved scalability due to compression and parallelisation techniques. AI can replace the need for human supervision by taking care of complex blockchain workflows.

AI-powered analytics & insights

Using artificial intelligence in blockchain systems can improve inventory operations, transparency, and sustainability. AI and machine learning can enhance blockchain capabilities with data-driven insights and bolster data security. Machine learning, in particular, secures blockchain transactions, predicts supply variations, improves order fulfilment, shortens supply routes, etc. By leveraging the AI and blockchain synergy, stakeholders can gain real-time insights into their supply chains and improve their traceability.

Decentralised AI

The decentralised nature of blockchain networks provides a perfect ground for decentralised AI to handle its data-driven capabilities. Machine learning, in particular, can be trained in datasets stored across multiple digital sources. Using machine learning models, blockchain can analyse disconnected datasets while maintaining the privacy of sensitive transaction data.

Use cases for AI and blockchain integration

Generative art is one of the most common use cases for using AI and blockchain in synergy. For example, the Cryptopunks project uses a master theme to create a collection of digital art, which the algorithm uses to generate infinite pieces, each with unique traits. Each of these pieces is attached to NFT. The authenticity of blockchain's digital record enhances trust and data integrity in these AI-generated artworks.

DeFi and crypto investing are other use cases for AI and blockchain synergy. Companies like TokenMetrics use AI to analyse investing trends and make more informed decisions. Firms like CertiK use AI's on-chain analysis capabilities to analyse big amounts of blockchain data for smart contracts auditing, cybersecurity, and fraud detection.

Healthcare companies like Vytalyx use AI to provide personalised medical advice, with outcomes recorded on blockchain.

Other use cases include blockchain projects that use AI for data monetisation. SingularityNET is a vivid example of a decentralised marketplace for AL services. Fetch.ai is another example of an AI autonomous agent that can carry out tasks like booking flights and accommodation.

AI and blockchain: What the future holds

Integrating AI and blockchain technology is a transformative advancement in digital innovation. This combination goes beyond merging two cutting-edge technologies, offering a powerful synergy that enhances security, transparency, and efficiency. Projects like Fetch.ai highlight the immense potential of pairing AI's computational power with blockchain's secure framework.

This convergence is poised to reshape industries by improving data integrity, creating decentralised organisations, and democratising access to AI. Decentralised AI (DeAI) could make AI tools more accessible, breaking down barriers for smaller entities. Additionally, blockchain can address AI's challenges, such as data silos and resource demands, while AI can enhance blockchain's automation and security. This synergy promises to drive innovation and benefit society at large.

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Impact of US Elections on Crypto Industry: Crypto and the US Government

Are crypto and the US government inter-connected? Surprisingly or not, the impact of the next US president's views on cryptocurrency plays a bigger role in the future outcome of the elections than you imagined. Federal agencies significantly shape crypto policies, highlighting the collaborative efforts required to establish necessary tasks and goals. With Gen Z and Millennials making up about 40% of eligible voters in 2024, it's most likely the candidate supporting crypto-friendly policies will get the most votes. Will the US elections impact the crypto industry or vice versa? The near future events will likely determine the trajectory of digital currency adoption and its integration into the financial system.

Vice President Kamala Harris and central bank digital currency

Kamala Harris, the current Vice President in the Biden administration, has been nominated as the Democratic Party's presidential candidate.

The Biden administration has significantly engaged with the cryptocurrency sector, attempting to balance fostering innovation and ensuring economic growth while safeguarding consumers through regulatory oversight. In March 2022, President Biden signed an executive order outlining a comprehensive strategy to evaluate the risks and benefits of digital assets. This order focused on six key areas: consumer protection, responsible innovation, and global competitiveness. Additionally, it aimed to address the fragmented approach of government agencies by promoting a more unified strategy. The potential role of a central bank digital currency (CBDC) in complementing existing fiat currencies, enhancing payment options, and facilitating faster cross-border transactions was also highlighted.

The Federal Reserve has been crucial in assessing the advantages and disadvantages of a central bank digital currency (CBDC) and conducting ongoing research into how such a currency might affect the economy and financial stability. Building on this initiative, the White House released a more detailed framework for responsible digital asset holdings in September 2022. This framework expanded on the initial executive order's key areas. It provided further guidance for a coordinated, government-wide approach to managing the risks and leveraging the benefits of digital assets.

Whether a Harris administration would adopt the crypto policies outlined in Biden's 2025 budget proposal remains unclear. These proposals include measures to prevent investors from immediately selling and repurchasing digital assets and requirements for more traditional reporting methods for digital asset transactions. The budget also proposes an excise tax on electricity used in cryptocurrency mining, projected to generate $10 billion in revenue in 2025 and over $42 billion over the next decade.

During Biden's tenure, the Democratic Party faced challenges in maintaining a unified approach to cryptocurrency regulation. Harris has not yet taken a definitive stance on the issue, and the Democratic Party's 2024 Platform does not mention crypto regulation. However, there is cautious optimism among crypto advocates that Harris might take a moderate approach. Harris has longstanding ties to the tech industry, dating back to her time as California's Attorney General in the 2010s, where she played a crucial role in privacy policy negotiations.

In early August, Harris received public support from JP Thieriot, a crypto platform Uphold board member. She has reportedly been engaging with industry officials before the August 14 online "town hall" event organised by Crypto4Harris, a group of crypto Democrats not officially affiliated with her campaign.

Former President Donald Trump and crypto

Donald Trump has recently shifted towards a more supportive stance on cryptocurrencies, marking a significant change from his previous scepticism. This shift is evident in several key actions, including the launch of his second Trump Cards collection, a series of non-fungible tokens (NFTs) on the Polygon blockchain. The Commodity Futures Trading Commission (CFTC) plays a crucial role in regulating futures and options contracts, and its perspective on cryptocurrencies as commodities adds another layer of regulatory oversight.

In May, Trump became the first presidential candidate to accept campaign donations in digital currencies, signalling his growing interest in the sector. By June, he advocated on Truth Social for all future Bitcoin mining in the United States, further highlighting his evolving stance on cryptocurrency.

Lee Bratcher, the founder and president of the Texas Blockchain Council, suggested in an interview with CoinDesk that Trump's change of heart may have been influenced by Vivek Ramaswamy, a former Republican presidential candidate who was a strong proponent of cryptocurrencies and blockchain technology. Bratcher noted, "Trump looks to Vivek on tech and digital asset policy. When he saw how Vivek captured the Republican voter — and more centrist voters than Trump can capture — he's probably more interested in that policy."

Trump's embrace of cryptocurrency seems driven by a desire to distinguish himself from political rivals who favour stricter regulation and capitalise on the growing popularity of digital assets. During a May dinner with buyers of his NFT cards, Trump criticised President Biden, the Democratic Party, and SEC Chair Gary Gensler, urging attendees to vote for him to see cryptocurrency thrive.

While Trump still needs to detail his plans for taxing digital assets, his history of advocating for lower taxes is well known. His administration signed the Tax Cuts and Jobs Act of 2017, the most significant tax reform in decades. With these provisions set to expire in 2025, Trump has promised to make them permanent if re-elected. He has also proposed further tax cuts, including lowering the maximum capital gains tax rate from 20% to 15%, which would impact cryptocurrency transactions as the IRS treats cryptocurrencies as property.

In late July, Trump spoke at the 2024 Bitcoin Conference in Nashville, promising favourable regulations and proposing a strategic Bitcoin reserve for the US. Following his speech, Senator Cynthia Lummis (R-WY) introduced draft legislation to establish this reserve. However, details on its impact on the national debt remain unclear.

Project 2025, a conservative policy agenda from the Heritage Foundation, has also influenced Trump's approach. The 900-page document outlines strategies to shift power from agencies like the IRS to the executive branch. It suggests collaboration between the SEC and CFTC to clarify the classification of digital assets. It emphasises the importance of national security in the regulation of digital assets.

US crypto regulations

The regulatory landscape for cryptocurrencies in the US is still in flux, with significant changes anticipated in the coming years. Various government agencies currently oversee different aspects of the industry, each reflecting its specific mandates and goals.

In addition to cryptocurrencies, regulatory frameworks for central bank digital currencies (CBDCs) are also being analysed globally. Several countries have studied the risks and benefits of implementing CBDCs, with eleven nations, primarily small island countries, successfully adopting them after extensive studies.

The US Securities and Exchange Commission (SEC), led by Chairman Gary Gensler—appointed by President Joe Biden—serves as the country's chief securities regulator. The SEC has argued that many cryptocurrencies qualify as securities and thus fall under federal securities laws.

On the other hand, the Commodity Futures Trading Commission (CFTC) is the principal regulator for futures and options contracts in the US. The CFTC views specific cryptocurrencies, such as Bitcoin and Ethereum, as commodities due to their decentralised nature and lacking backing from any government or central authority.

The SEC and CFTC have taken legal action against crypto exchanges for violating their respective laws. Notably, in March 2023, the CFTC charged Binance founder Changpeng Zhao with violating the Commodity Exchange Act. Simultaneously, the SEC has been embroiled in litigation with numerous crypto companies over the years, asserting that they have violated securities regulations.

How does crypto shape the presidential election's results?

The upcoming November election is the centre of public attention. The outcome of the current presidential campaign in the US will impact the traditional finance sectors and the global economy. Crypto and the US government are more connected than ever before. Investors and crypto fans closely monitor the candidate's crypto policies, assuming their most crypto-friendly candidates will win the election race.

The global shift and increased demand in crypto adoption have made candidates who previously expressed scepticism about crypto adoption change their minds. Thus, despite his scepticism, Donald Trump recently voiced his support for cryptocurrency by accepting digital currency donations and advocating for a strategic Bitcoin reserve. Kamala Harris from the Democrats has also expressed her support for adopting emerging technologies like cryptocurrency. Such shifts show the upcoming US presidential elections bring a more favourable regulatory environment for cryptocurrencies.

Investor takeaway

The discussion about the connection between crypto and the US government could be ongoing. Trump's recent comments suggest that he may be more lenient toward cryptocurrency if he wins the election. On the other hand, a Harris administration could be more open-minded and innovative than the current Biden administration but would likely take a cautious and deliberate approach.

Most crypto experts support having some regulations in place, arguing that increased regulation has attracted more serious investors. This push for regulation has significantly affected crypto's strong performance over the past several months. Ultimately, the election's outcome will be crucial in shaping the future of crypto regulation and the industry.

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Over-optimism and signs of a Bitcoin correction

In September, one of the leading growth drivers for risk-on assets was the Federal Reserve's 0.5% interest rate cut, the biggest such change to the rate in the past four years. The move caused Bitcoin to strengthen for nine days by 9.3% to $65,800.


Image source: StormGain Cryptocurrency Exchange

CME's FedWatch tool gives a 50/50 chance of the regulator making the same move in November, which, when coupled with the 21% average yield in October, gives investors high hope that Bitcoin will soon set new highs. The counterargument is that a number of metrics hint at a potential correction.


Image Source: cmegroup.com

Sentiment

Over-optimism is reflected in the elevated funding rate (indicating a predominance of buyers in the futures market), the rising premium on Coinbase, and the prevalence of bullish expectations in social media posts. According to calculations by the analytical company Santiment, for every bearish post about Bitcoin, there are 1.8 bullish ones. At the same time, every time optimism went off the charts, the market went into correction.


Image Source: x.com/santimentfeed

Low market activity

Bitcoin's significant growth has always been accompanied by an influx of new players, growth in retail capital and network activity. Right now, despite the consolidation around the high, this isn't being seen. The current volume of retail transfers is half the highs seen in the spring, and the difference with the rallies of 2017 and 2021 is even more significant.


Image source: glassnode.com

Lower network activity

The number of active network addresses is below the annual average, another sign of a potential correction.


Image source: glassnode.com

It correlates to the number of downloads of Coinbase's mobile app. During the 2021 bull run, the app was the most downloaded in the App Store. In the activity seen in Spring 2024, it reached the Top 200. The number of downloads is currently at its lowest level in the last four years.


Image Source: x.com/bitcoindata21

The arguments laid out above don't diminish the importance of long-term factors such as the growth of global liquidity or halving events. Nevertheless, they serve as a warning to investors who rely too heavily on 'Uptober'.


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Shiba Inu (SHIB) eyes 283% surge in anticipation of 'Uptober' rally

Shiba Inu (SHIB) is setting its sights on a potential 283% surge this October, fuelled by strong historical performance, market optimism, and major ecosystem developments. As the SHIB community eagerly anticipates 'Uptober', several factors, including the growth of its layer-2 blockchain solution, Shibarium, and increased decentralised finance (DeFi) integration, could help spark a significant price rally.

Shibarium's growth signals strong momentum

Shiba Inu's layer-2 blockchain, Shibarium, is taking centre stage once again after reaching a significant milestone. As of 25 September, Shibarium has processed over 7 million blocks, with total transactions approaching 420 million. These impressive figures highlight the growing adoption of the Shiba Inu ecosystem, as new contracts on Shibarium saw a 700% spike in just one day, rising from two on 23 September to 16 on 24 September. Additionally, new verified contracts and accounts on the network have seen substantial growth.

Launched in August 2023, Shibarium was designed to lower transaction fees on the SHIB network, support decentralised applications (dApps) within the Shiba Inu ecosystem, and enhance scalability. The rapid development and increased usage of Shibarium are seen by many as crucial to SHIB's future growth, particularly as the token aims to move beyond its meme coin origins and establish itself as a serious contender in the DeFi space.

Market excitement is further bolstered by upcoming developments in the Shiba Inu ecosystem. During the TOKEN2049 conference in Singapore, Shiba Inu's ecosystem lead, Shytoshi Kusama, teased major updates expected in the coming weeks. Speculation is rife about the anticipated launch of the TREAT token and the introduction of a layer-3 privacy chain, which Kusama cryptically described as focusing on "private things." These developments are expected to play a pivotal role in SHIB's growth, particularly as it expands within the DeFi sector.

The potential for another 'Uptober' rally

October has traditionally been a strong month for Shiba Inu, with the token experiencing an 833.6% price surge in October 2021, primarily due to increased market interest. While the gains in subsequent years have been more modest, with 10.4% growth in October 2022 and 6.04% in 2023, 'Uptober' has become a highly anticipated time for SHIB investors. As October 2024 approaches, many believe that SHIB could once again deliver substantial returns.

According to CryptoRank, SHIB has historically achieved an average return of 283.4% during October. While past performance is not a guarantee of future gains, these figures highlight SHIB's potential as it enters a month often associated with strong price growth across crypto markets.

SHIB's price has already risen by 14% over the past week, driven by factors such as reduced supply on exchanges and a sharp increase in token burns. Data shows that the amount of SHIB held on centralised exchanges has dropped to a seven-month low, with approximately 141 trillion tokens now in circulation on these platforms. This shift suggests a move towards self-custody methods, reducing immediate selling pressure and supporting potential price growth.

Additionally, Shiba Inu's burn rate has surged by over 7,000% in the past 24 hours, with nearly 8 million SHIB tokens sent to a null address. While the dollar value of these burns may seem small, consistent efforts to reduce the circulating supply could positively impact SHIB's value in the long run.  As 'Uptober' draws near, many believe the combination of historical trends and strategic upgrades could lead to another significant price rally for Shiba Inu.

Shiba Inu's future in DeFi

Shiba Inu's transition into the DeFi space is further supported by Shibarium's success and the growing shift away from centralised exchanges. Shiba Inu's marketing lead, Lucie, has encouraged the SHIB community to embrace decentralised finance, urging users to familiarise themselves with DeFi wallets, blockchain fundamentals, and hardware wallets for securing assets. Lucie also pointed to the benefits of migrating tokens to Shibarium, where users can enjoy lower fees and faster transactions.

This push towards DeFi aligns with Shiba Inu's broader goal of moving beyond its meme coin origins and becoming a serious contender in the decentralised finance space. With growing interest in blockchain technology and upcoming ecosystem upgrades, SHIB is positioning itself for long-term growth within the crypto market. As the token's development progresses, many traders are closely monitoring SHIB's evolution, anticipating that these strategic moves could further boost its market value.

At the time of writing on 25 September, SHIB is trading at approximately $0.000015, with its market capitalisation just shy of $9 billion, making it the 16th largest cryptocurrency by market value.

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