Over the month of September, ETH’s market cap was down slightly. BTC and other altcoins have increased their market cap by 9% and 12%, respectively. Collective stablecoin volume increased slightly while the overall market also increased — ostensibly signaling bullish sentiment in the digital asset sector.
Cryptocurrency observations with thanks to the team at CKC Fund.
Macroeconomics
A trifecta of interest rate cuts from several central banks is lowering borrowing costs and is predicted to be bullish for digital assets and other “risk on” assets. With inflation approaching central bank targets of 2%, there is speculation that another cut is on the horizon, further catalyzing a risk-friendly investment ecosystem.
During the September Fed meeting in the US, interest rates were cut by 50 basis points. This is intended to bolster economic growth and stabilize a lagging labor market.
BTC/ETH/digital asset news
The last week of September saw a notable uptick into digital asset product investment with over $1.2 billion in inflows in the US alone. Some speculate that this was in response to positive reactions to U.S. monetary policy.
Stablecoin volumes have seen a notable uptick on various blockchain protocols, with Celo showing record volumes in September.
Memecoins, AI and other technology trends
A recent AI study showed that the bigger and more advanced the AI model, the more likely it is to lie. While the adage that bigger AI models tend to be better at answering complex questions, it also seems they are less reluctant to say they don’t know the answer. Burgeoning AI project ASI voted to add cloud computing and blockchain platform Cudos to its expanding network.
- Ground-breaking deal announced for tokenised securities
- Xalts and Tezos Foundation to collaborate on tokenization of real assets
- Stablecoin market hits all-time high for AUM
Tokenization market set to mushroom
One Wall Street behemoth recently tokenized $20 million in commercial paper on Ethereum. A recent study projects the real-world asset (RWA) tokenization market will grow from $118 billion to $10 trillion by 2030. Driven by regulatory clarity and institutional appetite, RWA tokenization can bring liquidity to private equity, real estate, and other suitable assets.
Circle to bring stablecoins to Australia
A major stablecoin issuer is bringing stablecoin exposure to institutional investors in Australia and the Asia-Pacific (APAC) region. This echoes a similar initiative in Japan that will see this issuer further penetrate these burgeoning markets.
The Middle East is now accounting for 7.5% of global crypto volume. This is largely driven by institutional and professional investors, with the United Arab Emirates (UAE) becoming a major hub in the region.
Stablecoins now account for 43% of sub-Saharan crypto transactions. This is driven by unmet USD demand and the devaluation of local currencies.
September was also a busy month for digital asset enforcement actions and associated legislation. Former Alameda Research CEO Caroline Ellison was sentenced to a two-year prison sentence for her involvement in the FTX debacle. The SEC approved the trading of options for BlackRock’s spot BTC ETF while denying the motion for a hybrid BTC and Carbon Credits ETF.