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Week of August 6-12, 2024
Former US President Donald Trump has proposed using Bitcoin to pay off the US national debt, which amounts to 35 trillion USD. He criticized the government for devaluing the dollar by printing more money to settle past debts, suggesting that without a long-term appreciating asset like Bitcoin backing the currency, reducing this debt might be impossible.
Senator Cynthia Lummis has introduced the BITCOIN Act of 2024, allowing the US to hold Bitcoin and giving states the option to do the same. The act proposes that the US can acquire up to 200,000 BTC annually over five years, accumulating a total of 1 million BTC. Additionally, the US Treasury will be required to publish quarterly reports to the public.
Morgan Stanley has authorized its 15,000 financial advisors to offer Spot Bitcoin ETFs to high-net-worth clients, making it the first major financial institution to implement such a policy. The funds available to clients are BlackRock’s iShares Bitcoin Trust (IBIT) and Fidelity’s Wise Origin Bitcoin Fund (FBTC).
David Solomon, CEO of Goldman Sachs, commented that Bitcoin could serve as a store of value similar to gold. He also highlighted the potential of blockchain technology to digitize the financial system. Goldman Sachs plans to launch three tokenization projects by the end of the year, prioritizing the US and European markets.
MicroStrategy reported its second-quarter financials for 2024, revealing the purchase of 12,222 BTC for 805.2 million USD. This brings their total holdings to 226,500 BTC at a cost of 8.3 billion USD, or 36,821 USD per BTC, as of July 31.
Bloomberg reported that senior executives from US crypto companies will meet with White House advisors and Democratic representatives to discuss amending laws and policies affecting the US crypto industry. This development follows prior discussions between the government and representatives from Coinbase, Circle, and Ripple.
Technical Graph Analysis
Bitcoin (BTC)
Bitcoin (BTC) has dropped significantly to a key support level of 53,000 USD. If it fails to hold this level, it could fall further to 44,000 USD. However, if the price maintains its position above 53,000 USD, it could test the 60,000 USD resistance next. The RSI (relative strength index) is entering oversold territory, suggesting a potential short-term rebound, although the overall short-term trend remains weak.
- Support: 1,600,000 THB / 44,000 USD
- Resistance: 2,200,000 THB / 60,000 USD
Ethereum (ETH)
Ethereum (ETH) has dropped over 20%, breaking the key support at 2,700 USD. There is further risk of a correction down to 2,000 USD. However, short-term recovery is possible as the RSI enters oversold territory. A sustained recovery will require breaking through the 2,700 USD resistance.
Support: 60,000 THB / 2,000 USD
Resistance: 100,000 THB / 2,700 USD
Aave (AAVE)
Aave (AAVE) posted a slight loss of 0.48% over the past week. While it performed better than the overall market, the price must hold above 70 USD for support. Falling below this level would indicate a possible downtrend, while maintaining it could see a retest at the 100 USD resistance.
Support: 2,600 THB / 70 USD
Resistance: 3,600 THB / 100 USD
Convex Finance (CVX)
Convex Finance (CVX) saw a 9.76% declining last week as it tested its previous low of 1.87 USD. If the price breaks below this level, it is advisable to cut losses. However, if it holds, the first resistance target is 3.50 USD, where profit-taking is recommended.
Support: 70 THB / 1.87 USD
Resistance: 110 THB / 3.50 USD
Investment Trends
The Federal Reserve's policy committee meeting outcomes met expectations by holding interest rates steady. The Fed Chairman's comments were neutral, indicating future rate decisions would depend on economic data.
Key economic indicators such as non-farm employment and unemployment rates were worse than expected, raising recession fears and leading to broad sell-offs in assets including stocks, gold, and crypto.
Asian stock markets opened on Monday with continued selling pressure, especially in US tech stocks and AI-related sectors. This action could also impact the crypto market in the short-term as institutional investors adjust their portfolios.
Despite short-term volatility, the long-term outlook for the crypto market remains positive due to potential pro-crypto policies from US presidential candidates and the likelihood of the Fed cutting interest rates in response to recession signals.
The short-term strategy is to monitor the corrections. If no new lows are made, consider long-term investments. However, if Bitcoin falls below 53,000 USD, delay any further investments. If the price holds, gradually accumulate Bitcoin and Ethereum, which are expected to lead the market’s recovery. Altcoins with potential for quick rebounds include Solana (SOL) and Binance (BNB).
References
- https://cointelegraph.com/news/trump-floats-paying-off-35-trillion-national-debt-bitcoin
- https://www.theblock.co/post/308420/sen-lummis-draft-bill-allows-us-states-to-hold-bitcoin
- https://www.theblock.co/post/309127/morgan-stanley-to-allow-wealth-advisors-to-pitch-bitcoin-etfs-to-some-clients-cnbc
- https://cryptoslate.com/goldman-sachs-ceo-says-bitcoin-can-potentially-serve-as-store-of-value-akin-to-gold/
- https://www.theblock.co/post/309000/microstrategy-raises-holdings-to-226500-bitcoin-introduces-btc-yield-metric
- https://www.bloomberg.com/news/articles/2024-08-02/crypto-executives-to-meet-with-white-house-advisers-next-week
Disclaimers
- Cryptocurrencies and digital tokens are highly risky; investors may lose all investment money. Investors should study information carefully and make investments according to their own risk profile.
- Past returns or performance of digital assets do not guarantee future returns or performance.
Remark: views, information, knowledge, and opinions are considered as content that come from individuals involved. They do not constitute an expression of Bitazza and its employees. Neither the email nor the content presented constitute investment advice.