GB Market Commentary 08/09/2021
by Alex Clark
The cryptocurrency market posted staggering losses yesterday in a "buy the rumour, sell the fact" chain of events, wiping $410 billion from market value and triggering $3bn in long position liquidations. Bitcoin plunged 19% from $52,956 to $42,900 yesterday, unravelling the gains made previously. El Salvador, who officially adopted bitcoin as legal tender yesterday, appeared unfazed by the dip, instead capitalising on it, and purchasing another 150 BTC. For now, Bitcoin remains consolidated in the $45k - $47k region but there is a lot of uncertainty as to what will happen next.
The majority of the crypto market slid with BTC, demonstrating the relative immaturity of the asset class and the market’s dependency on BTC. Although Near (NEAR), Algorand (ALGO) and Solana (SOL) remained largely unaffected and instead have seen double digit returns. Algorand (ALGO) is currently trading at $1.60 at time of writing and is up 15% over the past 24 hours.
Stablecoins have seen a lot more volume than on previous days with Tether (USDT) capturing over 50% of the $282bn 24-hour volume.
In other news, the DeFi regulatory battle is hotting up as Coinbase faces regulatory scrutiny from the SEC over it’s upcoming, yield generating ‘Coinbase Lend’ product. Coinbase CEO, Brian Armstrong, has taken to Twitter to express his frustration with the decision, succinctly explaining the chain of events in a series of tweets.
Opensea daily volumes are on a decline since their peak at the end of August which could indicate a stabilisation of the NFT market or, worse, a dwindling of interest.
Following El Salvador’s decision, Panama is introducing a bill to regulate the use of cryptocurrencies for civil, commercial and tax purposes. Not only is the country seeking compatibility with the blockchain, crypto assets, and the internet, but it sees the potential to create thousands of jobs, attract investments, and to increase government transparency.
In a similar vein, the former Deputy Governor of the Reserve Bank of India (RBI) has spoken out about the nation’s financial and crypto ecosystem at the inaugural HODL 2021 virtual conference, stating that digital assets need to be accepted.