11 Oct, 2024

Fed and China’s Stimulus Boosted the Crypto Market by 8% in September

Global Economic Decisions Drive GrowthIn September 2024, the cryptocurrency market saw an impressive 8% growth, surpassing traditional assets like gold and stocks. This growth was primarily driven by global macroeconomic factors, including the U.S. Federal Reserve's decision to cut interest rates by 0.5%. This marked the first rate reduction since 2020, helping inject liquidity into the financial ecosystem. Another contributing factor was China’s economic stimulus, which introduced approximately $33 billion into the market, further bolstering crypto liquidity.DeFi Thrives While NFTs StruggleDuring this period, DeFi Total Value Locked (TVL) saw a rise of 9.6%, with platforms like Sui, Base, and Sei leading the charge. Sui's TVL grew by 60%, Base by 45%, and Sei by an impressive 102%. However, not all sectors benefited; the NFT market continued its downturn, experiencing a trading volume drop of 21.2% in Q3.Crypto Outperforms Traditional Assets in Q3Though Q3 of 2024 was relatively quiet, crypto still outperformed traditional investments. Bitcoin reported a year-to-date (YTD) return of 49.21%, easily outpacing gold’s 27.71% YTD return and U.S. equities at 22% YTD. Even stablecoins experienced growth, with Tether’s quarterly profits surpassing those of BlackRock. Major institutions, such as Morgan Stanley, also increased their involvement by allowing wealth managers to buy Bitcoin exchange-traded products (ETPs), reflecting growing institutional interest.Concerns Over U.S. Government’s Bitcoin SaleYet, challenges persist. Concerns are rising about the U.S. government's potential sale of $4.4 billion worth of Bitcoin seized from the Silk Road marketplace. Such a sale could lead to significant market volatility by increasing Bitcoin’s supply, potentially triggering a price drop. Ryan Lee, Chief Analyst at Bitget Research, noted that such large sales often cause instability in the Bitcoin market.Upcoming Economic Data to Impact Market SentimentTraders are closely watching upcoming U.S. economic data, particularly the Consumer Price Index (CPI) and Producer Price Index (PPI). The stronger U.S. dollar is also adding pressure to crypto prices, as dollar-denominated assets like Bitcoin become less attractive to investors. Despite these hurdles, cryptocurrency continues to attract attention and investment, positioning itself as a key player in the financial landscape.

30 Sep, 2024

Visa to Help Banks Issue Fiat-Backed Tokens on Ethereum Via New Tokenized Asset Platform

Visa's new Platform will enable the development of fiat-backed tokens powered by smart contracts.① Visa has developed a new product to help banks issue fiat-backed tokens on the Ethereum network.② One of the first financial institutions to use the platform will be Spanish bank BBVA, who expects to launch a live pilot in 2025.Payments giant Visa (V) has developed a new product to help banks issue fiat-backed tokens on the Ethereum network.Visa Tokenized Asset Platform (VTAP) will enable the development of fiat-backed tokens powered by smart contracts to help digitize and automate existing processes that will then power the exchange of real-world assets (RWAs), according to an announcement seen by CoinDesk.A bank would use Visa's new platform to purchase tokenized RWAs such as commodities or bonds with near-real-time settlement, using a token, the statement said. One of the first financial institutions to use VTAP will be Spanish bank BBVA, who expects to rollout a live pilot in 2025.Visa's work in blockchain and digital assets is well established, with the company processing cryptocurrency payments in stablecoin USDC on Ethereum in March 2021.Earlier this month, Visa became a partner of Brazil's central bank in its pilot project toward a central bank digital currency (CBDC).