Stay up to date with our monthly crypto overview:

• The crypto markets corrected in August, following July’s relief rally.
• Bitcoin and Ether closed -14.07% and -6.94%, respectively, versus last month.
• The top outperformer among the leading crypto assets in August was Cosmos’ ATOM token.

Crypto Market Overview August 2022

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While the crypto community is eagerly awaiting Ethereum’s Merge, which will see the second-largest blockchain network move from Proof of Work to Proof of Stake, the crypto markets reacted to Fed Chairman Jerome Powell’s hawkish statements, pushing Bitcoin below the $20,000 mark.

Hinting at further rate increases (estimated at 50bps to 75 bps), crypto assets moved a leg lower line with stocks. Most leading digital assets dropped between 10% to 15% in August, despite institutional interest increasing at current levels.

The blacklisting of crypto-mixing service Tornado Cash by the U.S. Treasury in early August, which prohibits all U.S. persons from interacting with the privacy-enhancing technology, sparked concerns in the crypto community about the potential ramifications.

Crypto advocates believe that privacy layers are essential for financial services to operate on public blockchains (where all transactions can be viewed) and that open-source technology should not be censored by authorities.

While sanctioning crypto-mixing services, which have been used by cybercriminals to launder funds, may make sense from a regulatory and legal point of view, crypto advocates are concerned about the potential of U.S. authorities to apply similar actions toward other open-source platforms, such as DeFi protocols.

 

Crypto Asset Performance Review

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The crypto markets retracted in August, following a relief rally in July. The two leading crypto assets, Bitcoin and Ether, have dropped -14.07% and -6.94%, respectively, versus last month’s close. The remainder of the crypto markets largely followed suit, with only a handful of cryptocurrencies closing the month in the green.

The meme coin Shiba Inu (SHIB), Bitfinex’s UNUS SED LEO (LEO) token, and Cosmos (ATOM) were the only digital assets that booked month-on-month gains among the top 25 assets by market capitalization.

Cosmos’ ATOM token was this month’s top performer, closing the month 6.26% higher, following reports that the token will be used as collateral in MakerDAO-style stablecoins and the Cosmos team making headway in the chain’s development with new upgrades expected in the coming months.

The stock market also corrected in August, with U.S. stocks (measured by the S&P 500 Index) dropping by 2.14% month-on-month, following the anticipation of further interest rate increases by the Fed in an attempt to curb the country’s soaring inflation.

U.S. Treasuries corrected by 1.89%, while the value of Gold (XAU) dropped by -2.05% month-on-month. The precious metal is up slightly from its nine-month low of $1,696.16, which it hit on July 20, closing the month at around $1,771.

Institutional Interest in Crypto

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BlackRock announced that it will offer Bitcoin investment services to institutional investors through a spot Bitcoin private trust in partnership with Coinbase, opening up billions of dollars of capital that could potentially flow into the world’s leading cryptocurrency. “Despite the steep downturn in the digital asset market, we are still seeing substantial interest from some institutional clients,” the company stated.

Publicly traded cryptocurrency company Coinbase has launched Ethereum staking for US-domiciled institutional investors through Coinbase Prime. The new product will enable institutions to stake Ether (ETH) to earn staking rewards, similar to earning interest on a fixed income security. The only difference is that the “interest” is paid in ETH.

Bitcoin on Balance Sheets

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The publicly traded bitcoin mining company, Hut 8 Mining Corp, added 330 BTC to its balance sheet in July, according to a Presseerklärung. The Canadian company now holds 7,736 BTC on its balance sheet. “We continued to deliver results, growing our stack to 7,736 Bitcoin – one of the largest holdings globally – by mining efficiently,” said Jaime Leverton, CEO.

English football club, Oxford City FC, announced the acceptance of Bitcoin as a payment method for tickets and food and beverages on match day. The sixth-tier club has partnered with Isle of Man-based Bitcoin company CoinCorner – which has also become a back-of-shirt sponsor – to integrate Bitcoin payments. It’s not confirmed whether or not the club will keep the Bitcoin on its balance sheet or convert the Bitcoin payments into fiat currency at point of sale.

 

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