Bored Bitcoin Seeks Direction After Big Bang By Reuters

By Medha Singh and Lisa Pauline Mattackal

he has been distinctly listless in the last three months after starting the year with a bang.

The crypto leader has largely moved between $56,000 and $63,000 so far in the second half of the year – a contrast to the first six months when it surged 45%, propelled by the launch of US exchange-traded funds (ETFs) that track the spot price. .

Market players are now looking at possible new crypto catalysts heading into year-end and early 2025, beyond broader market-moving events such as US interest rate changes and the US presidential election.

Jake Ostrovskis, trader at U.K.-based crypto firm Wintermute, anticipates the upcoming launch of options on BlackRock’s (NYSE: ) Bitcoin spot ETF, a new product he believes could attract more U.S. retail money after its approval by the Securities and Exchange. Commission last month.

Because regulators view bitcoin as a commodity, such options may also need a green light from the Commodity Futures Trading Commission, which oversees commodity derivatives, said Youwei Yang, chief economist at BIT Mining.

“If successful … (ETF options) could increase the sophistication and volatility of the bitcoin market, leading to greater institutional and retail engagement,” Yang added.

It’s been quite a run for crypto as the anticipation and approval of US ETFs helped boost bitcoin activity globally.

The total size of the cryptocurrency market has grown to $2.2 trillion as of October 1 this year, from $8.3 billion at the start of 2023, according to CoinGecko data.

“We have seen a significant increase in institutional on-boarding and trading activity,” Ostrovskis said this year, adding that there is strong demand for digital asset platforms and services that resemble traditional financial structures.

Bitcoin’s notoriously wild 90-day volatility has fallen to 42% this year, from 67% in mid-2020, according to Deutsche Bank data. Market watchers warned that bitcoin continued to show a strong correlation with other cryptocurrencies and could be among the first assets abandoned by investors retreating from uncertainty and risk; Bitcoin fell 5% following a further escalation of hostilities in the Middle East last week, for example.

BIGGEST CRYPTO COUNTRIES?

Chainalysis’ Global Adoption Index, which tracks crypto usage in 151 countries with measures including trading and payments, outperformed the 2021 crypto bull market between the fourth quarter of 2023 and the first quarter of 2024.

Crypto adoption is particularly strong in lower-income countries, which often have less developed and accessible mainstream financial systems, the report said. India took first place, followed by Nigeria in the Chainalysis ranking, while seven of the other top 20 countries were emerging Asian markets, including Indonesia, Vietnam and the Philippines.

Cryptocurrency fans often point to uses in countries with high inflation and rapid currency depreciation — such as Turkey and Argentina — as evidence of real-world uses of digital money.

Chainalysis also noted significant growth in decentralized finance (DeFi) and stablecoin activity in Sub-Saharan Africa, Latin America, and Eastern Europe.

“The value proposition for bitcoin and stablecoins in Latin America is intact,” said Mauricio Di Bartolomeo, co-founder of crypto loan provider Ledn.

“Most of the emerging world wants to bank in dollars, but they don’t necessarily trust their banks.”

The United States ranked fourth in adoption, while South Korea and China ranked 19th and 20th, respectively.

In terms of crypto transaction volumes, the US is the largest market in the world, followed by India, according to Deutsche Bank.