Macro Movements in the Crypto Space

Welcome back to another market recap in the crypto space. In terms of the majors, Bitcoin and Ethereum were about where we started the month. But that is only part of the story as they both went on a bit of a run through the middle of August. Only to be heavily sold off at the end of the month.

In addition to the macro movements, other notable events include the much anticipated Ethereum Merge, CEO of MicroStrategy stepping down, and more.

Macro movements

So, what’s been driving the macro movements?

Well our take is that the Macro market oscillated between liking what it was seeing on Inflation (mid August), but then pulling back when the Fed came out swinging again. They are steadfast in their commitment to rein in inflation at the moment.

Check out our YouTube video for a quick summary of the market recap:

Trends and portfolio activities

Turning to our order trends. Once again we are seeing 4 times as many buys as sells; interestingly enough we have seen less sell volume this month (by order value). This is a continuation of a trend we can trace back to the end of May.

This month we did something a little different and polled our staff about what they are doing at the moment. Fully 50% are Dollar Cost Averaging.

Learn more about DCA: Read our guide on dollar cost averaging.

The rest of us are lump sum investing when we see a critical level hit. In terms of what we do, we tend to split our portfolios with a portion on HODL, with the rest reserved for some sort of yield (split pretty evenly over CeFi and DeFi) or being actively traded (15%).   

This month’s price bolster EOS up as much as 80% at one point this month on the back on some pretty big news about an incentive program and a hardfork.

Looking at what you are all buying. It looks like the shift to layer 1, less speculative assets continues on, our most popular assets being BTC, ETH, LTC, XRP, ADA  as well as stablecoins.

In fact, this trend is becoming even more pronounced. There were some occasional bolters with EOS and QNT going on mini runs too.

When we look at what you are selling – it’s got a lot more stablecoin in it with the top assets being BTC, ETH, USDT, USDC.

Want to see the lates rates in the crypto market? View our crypto live rates.

The really hawkish comms out of Jackson Hole caused a market sell off toward the end of the month. All eyes will be on the critical supports for BTC and ETH to see if they hold.

Aside from the ETH merge progress, we are all waiting on some good news at a macro level.

What’s been happening in the crypto space?

There has been so much going on in the market at the moment but here are big themes we’ve seen:

1. Michael Saylor stepped down as CEO of MicroStrategy. Looks like a huge BTC bull out possibly caught by the market downturn.
2. Continued signs of Institutional interest with Blackrock, the biggest asset manager in the world now offering some of its clients access to Bitcoin. 
3. Turning to the Ethereum Merge – looks like it’s just around the corner with the PoW network set to a fixed number of hashes left to mine, according to Ethereum’s founder Vitalik Buterin.

• Chainlink (a massive provider of pricing data to the DeFi and CeFi worlds) has said it will only support Ethereum going forward, which will make forking (splitting into two chains) a much more difficult proposition. 
• USDC and USDT have also said the same so it could be game over on a split. 

4. And in a really bullish sign for ETH, it flipped Bitcoin in options trading for the first time ever.
   • And the Merge looks more likely to go ahead in Q3/Q4 this year. 

5. Tornado cash – a mixing service was blacklisted by the US Treasury Department for apparently dealing with known laundering parties and sanctioned countries.  
   • This had some unintended consequences for legitimate users who valued their privacy and are now affected and should be an interesting test case for the U.S First Amendment. USDC issuer Circle then banned wallets associated with Tornado.
   • Flow on effects were now felt in the DeFi space with them also sanctioning addresses.
   • There is a lot too this and I think its fair to say that is more to come.
6. Security is always topical in crypto and this month wasn’t great i’m afraid
   • In the latest of a series of exploits of Bridges, Nomad was drained of $200m in an exploit.  This was rapidly followed by a large Solana wallet vulnerability. A good reminder to use hardware wallets folks. 
   • Later in the month Acala network’s aUSD stablecoin had an issue too and is now depegging.
7. Coinbase posted it’s Q2 Earnings and boy, was it ugly. Volumes down and costs up.
   • Sam Bankman-Fried did a twitter thread on their earnings in his own way.
   • 
8. Domestically some news from both Houbi and Binance that they were removing their derivative trading services to NZ customers. 

• And news out that Swyftx has had to reduce its headcount due to the crypto winter. 

Missed last month’s market recap? Read our market recap from the previous month.

That’s it for our August recap! We really hope you found something useful for your awareness of what’s happening out in the crypto space.

If you enjoyed reading this, let us know what type of stuff you want to see more of – please drop a comment on our Facebook or LinkedIn!