Altcoins and bitcoin have been declining in value for a while. After its most recent steep decrease at the start of August, Bitcoin has been attempting, but failing, to maintain its $60,000 level.
Although a rebound in Bitcoin and other cryptocurrencies is anticipated, Grayscale Research has released an updated analysis.
Grayscale noted that August was a very turbulent month for the cryptocurrency market and that, in the midst of this volatility, Bitcoin benefited from signals of interest rate cuts and a declining dollar.
The Grayscale report states that while Ethereum (ETH) did poorly, Bitcoin did better.
The report also mentioned that at the Jackson Hole meeting toward the end of August, FED Chairman Powell hinted at future interest rate cuts that could be advantageous for Bitcoin.
“In our view, dollar weakness and low interest rates, if they continue, will be positive for Bitcoin’s valuation.”
Ethereum Performed Less Well Than Bitcoin!
The report states that while Ethereum fell more sharply (-21.8%) and was among the underperforming assets when considering risk-adjusted returns, Bitcoin fell more gently (-8.5%).
It was determined that a significant number of speculative positions and Ethereum’s erratic scaling approach contributed to this decline.
“Ethereum significantly underperformed in the early August crash and failed to meaningfully recover later in the month.
Grayscale Research believes that current market pessimism about Ethereum is unjustified, given that the scaling strategy is clearly working. However, it may take some time for the market to become more positive for ETH.”
These Two Altcoins Are Shown As Examples!
Citing ZCash (ZEC) and AAVE as examples of altcoins that demonstrated positive performance by positively decoupling from the market in August, Graysacale Research analysts made this claim.
“For example, ZCash (ZEC) gained 29.5% in mid-August before pulling back later in the month. AAVE gained 21%.”
The Great Selling Pressure in Bitcoin is Over!
According to Grayscale Research, the selling pressure brought on by the German government, Mt. Gox refunds, and other events have largely passed, and a price increase is most likely.
“Stable US labor market data, Fed rate cuts, and changing US policies around the crypto industry could allow Bitcoin price to retest all-time highs later this year.”
August brought volatility to the markets, but what does it mean for #Bitcoin, #Ethereum, and the broader #crypto landscape? 🧐
Dive into how Fed rate cuts, Ethereum’s scaling strategy, and stablecoins growth are helping to shape crypto market movements 👇https://t.co/9ZmOpX8Egj pic.twitter.com/HI1KmJbKBX— Grayscale (@Grayscale) September 3, 2024
*This is not investment advice.