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Bitwise’s CIO has said while Washington can alter the trajectory of the crypto market by speeding things up or slowing them down, it can’t stop it.
In his latest client memo, Matt Hougan wrote about crypto in an election year, claiming that crypto has already won, regardless of who becomes the next President of the United States.
Comparing the state of the crypto market from November 2020 to November 2024, Hougan questioned whether things are better or worse since the last time Americans went to the polls.
Despite several lawsuits from the US Securities and Exchange Commission (SEC) – notably against Binance, Coinbase, Cumberland DRW, Kraken, and Ripple – the crypto industry has made significant progress.
Looking between the two US elections, Hougan points out that Bitcoin was trading at $13,677 in November 2020. Fast-forward to November 2024 and Bitcoin is valued at around $69,492, indicating a 408% change.
Ethereum has also seen a positive increase from its humble $388 in 2020 to its now $2,492 in the runup to the 2024 US election. However, it’s Solana that has seen a major increase in price rising nearly 11,000% from $1.49 in 2020 to around $166 in 2024.
Turning to assets under management (AUM), Hougan shows that stablecoin AUM rose from $3.87 billion in November 2020 to $177.83 billion in November 2024, representing a near 4,500% change.
Decentralized finance (DeFi) total value locked (TVL) also experienced a healthy boost, jumping from $9.57 billion in 2020 to $139.3 billion in 2024.
“We focus so much in crypto on the moment-by-moment movement of prices that we often lose sight of the long-term trends,” Hougan wrote. “The presidential election provides a nice opportunity to step back and see how far we’ve come.”
So much has already happened in the crypto market over four years, but will that continue as the market goes beyond the 2024 US election?
In Hougan’s view, the answer is yes. Regardless of who becomes the next POTUS, Hougan said – among other things – that spot crypto exchange-traded funds (ETFs) inflows will continue, stablecoins will continue to grow, Wall Street will continue to embrace tokenization and real-world assets, blockchains will get faster and cheaper, and real-world applications such as Polymarket will gain mainstream adoption.
“What happens in Tuesday’s election matters, particularly in the short term,” said Hougan. “But as I see it, over the long term Tuesday will prove to be something between a speed bump and a wind gust. Neither is going to stop this train.”
Siemens Energy CEO Christian Bruch said that “too much had been swept under the carpet” concerning Siemens Gamesa.
Shares of Siemens Energy declined 35% earlier today as the company discarded its profit prediction and mentioned lasting wind turbine issues. Following a review of concerns at its subsidiary Siemens Gamesa, the company announced its findings of a “substantial increase in failure rates of wind turbine components”. However, its shares plunged as the market reacts to the unpleasant update.
The Thursday report shows that the Siemens Gamesa board has started an “extended technical review” to upscale product quality. Meanwhile, the parent company noted that the review cost is now “significantly higher” than earlier predicted. The current estimation is over 1 billion euros, also $1.09 billion. As for Siemens Energy, it is currently impossible to have a precise estimate of the incoming financial impacts of the quality subjects considering the issues. It is also too early to calculate the result of the review of its assumption on its business plans. Speaking on the wind turbine issues, Siemens Energy noted:
“However, based on our initial assessment as of today, the potential magnitude of the impact leads us to withdraw the profit assumptions for Siemens Gamesa and consequently the profit guidance for Siemens Energy Group for fiscal year 2023.”
According to Reuters, Siemens Energy CEO Christian Bruch said that “too much had been swept under the carpet” concerning Siemens Gamesa. The chief executive added that the quality issues at the company were more than he envisaged. As for the senior research analyst at Alliance Bernstein, although Siemens Energy can recover from its fall, the market is utterly shocked by the recent developments. He explained:
“There’s a 17 billion euros service order book and that is delivering service on installed wind farms and in wind turbines for quite a number of years ahead – five years ahead, sometimes 10-year contracts – and to discover that a handful of your components aren’t working as you planned, that maybe you’ll need to go in and replace those components, that is a very large liability that you’re taking on.”
Additionally, Green questioned Siemens Energy’s estimate of its component failures. The company said the component failures may occur in between 15% and 30% of its installed fleet of turbines. On the other hand, the research analyst said there is still a “slight question mark about where that liability ends”.
Fingers are crossed in expectation of another update come August. Green stated that the company may have precise estimates by then. He noted that Siemens Energy may have handled the issues at its subsidiary – Siemens Gamesa. He concluded that “certainly it is an alarmingly large hit and it’s taken the market by surprise.”
Ibukun is a crypto/finance writer interested in passing relevant information, using non-complex words to reach all kinds of audience.
Apart from writing, she likes to see movies, cook, and explore restaurants in the city of Lagos, where she resides.
Bitcoin miners appear to have reduced the pace at which they were offloading tokens, indicating that some selling pressure on the token may have eased.
Bitcoin prices stabilized around $20,000 after tumbling as low as $17,922 last week. The token now appears to be treating $20,000 as a support level.
A bulk of this tumble was also driven by Bitcoin miners offloading their holdings. Data last week showed that miners moved a record amount of Bitcoin onto exchanges last week, which eventually resulted in more price declines.
But after a massive sale last week, selling pressure on the world’s largest cryptocurrency may be easing.
Data from CryptoQuant shows that after peaking last week, flows from Bitcoin miners to exchanges have dropped sharply. This implies that for now, selling pressure from miners is likely to ease.
After moving as much as 4,700 Bitcoin in a day last week, miners mobilized about 308 tokens on Monday.
This also coincided with a mild recovery in Bitcoin prices to back above $20,000.
Separate data from Glassnode shows that miner net flows have also fallen to a one-month low, indicating limited trading activity. Major miners may now be again adopting a hold strategy in the face of volatile prices.
Bitcoin miners have been consistently selling their holdings this year to maintain operations, as the profitability of mining was impacted by a drop in prices.
While reduced selling by major miners may offer Bitcoin some relief, the token still faces a slew of other headwinds.
Mass liquidations of major holders, such as Celsius and Three Arrows Capital, are bound to put more pressure on prices. Fears of another drop is also keeping most retail buyers out of the market.
The key factors that drove Bitcoin weakness this year- concerns over rising inflation and higher interest rates- are still in play, with no sign of easing.
Prolonged losses in the stock market are also spilling over into the token.
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
Bitcoin, Dogecoin, and Ethereum were muted on Wednesday evening, with the global cryptocurrency market cap edging 0.4% lower to $2 trillion, as the U.S. Federal Reserve stuck to a hawkish tone even as war raged on in Ukraine.
| Coin | 24-hour | 7-day | Price |
|---|---|---|---|
| Bitcoin (CRYPTO: BTC) | -0.6% | 17.8% | $43,999.10 |
| Ethereum (CRYPTO: ETH) | 0.9% | 14.3% | $2,966.70 |
| Dogecoin (CRYPTO: DOGE) | -0.1% | 4.3% | $0.13 |
| Cryptocurrency | 24-Hour % Change (+/-) | Price |
|---|---|---|
| Anchor Protocol (ANC) | +20% | $4.49 |
| Convex Finance (CVX) | +13.1% | $21.27 |
| JUNO (JUNO) | +12.3% | $45.16 |
See Also: How To Buy Bitcoin (BTC)
Why It Matters: The U.S. Federal Reserve Chair Jerome Powell, in his semi-annual address to the Congress, said that rate hikes were coming despite the ongoing war between Russia and Ukraine.
“The bottom line is we will proceed, but we will proceed carefully as we learn more about the implications of the Ukraine war for the economy,” said Powell.
“We will avoid adding uncertainty to what is already an extraordinarily challenging, uncertain environment.”
On Tuesday, the Bank of Canada raised interest rates to 0.5%, a 25 basis-point hike for the first time since 2018.
“Wall Street is still going through a major reset with portfolios as the war in Ukraine poses major risks to economic growth and inflationary pressures,” wrote Edward Moya, a senior market analyst with OANDA, in a note seen by Benzinga.
Moya noted that Bitcoin was diversifying away from fiat currencies, and growth concerns were prompting investors to look for “alternative investments” from equities. However, he said the current rally could be losing steam.
“Bitcoin has had a nice run, but exhaustion in this rally will likely settle in as surging energy costs will likely impact some mining abroad,” Moya said, adding that the Ukraine war uncertainty still had the potential to trigger major de-risking moments.
On Wednesday, the dollar index – a measure of the greenback’s strength against six of its peers – traded nearly flat. It edged up 0.03% to $97.3290, according to a Reuters report.
Cryptocurrency trader Justin Bennett said the dollar index would be a “key driver” for digital assets in 2022.
“If [Bitcoin] intends to hit all-time highs, the DXY will lead the way with a move below 95,” tweeted the analyst.
“Most are overlooking this, but the #DXY will be a key driver for #cryptos in 2022.”
If #Bitcoin intends to hit all-time highs, the DXY will lead the way with a move below 95.
Until then, it’s wise to remain a little skeptical.
— Justin Bennett (@JustinBennettFX) March 1, 2022
On the Ethereum front, Median Gas Price (7-day moving average) reached a 6-month low of 57.884 GWEI, according to data from Glassnode, an on-chain analytics firm.
Ethereum Median Transaction Gas Price (7-Day Moving Average) — Courtesy Glassnode
The average ETH transaction fee stood at 0.0046 ETH or $13.69 at press time, according to data from BitInfoCharts.
Read Next: Citadel Securities Will Engage In Crypto This Year: Ken Griffin
Facebook founder Mark Zuckerberg’s ambitious program to create his own cryptocurrency is falling apart amid rising tension from regulators.
According to a Bloomberg report released Wednesday, the Diem Association, which manages the expansion of the Diem digital currency, is contemplating a sale of its assets to return money to its investors. The report adds Diem is selling its technology to crypto-focused small- California-based bank Silvergate Capital for $200 million.
Facebook, now known as Meta, established its cryptocurrency assignment in 2019 and virtually immediately ran into opposition in Washington. Bloomberg wrote, “One of the people speaking to Bloomberg under the condition of anonymity says that Meta owns about a third of the venture, and the remainder is owned by association members, such as Andreessen Horowitz, Union Square Ventures and Ribbit Capital.”
Neither the representatives of Diem nor Meta responded to queries in this regard.
Diem (formerly Libra) is a permissioned blockchain-based payment system proposed by Meta Platforms. In May last year, Diem revealed that it had revoked its application to the Swiss Financial Market Supervisory Authority and said it would pursue the US treasury’s permission to register as a cash services business.
Disclaimer
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
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