Market update
Cointree Crypto Market Update - October 2nd 2024
Market report for traders
🔮 BTC, ETH, and Altcoins
Over the last 7 days, Bitcoin ends at AU$89,365, moving -4.28% at the time of writing. Meanwhile, Ethereum ends at AU$3,602 moving -6.02% week-on-week. On the Altcoin side, Solana levels out with -2.64%, Cardano -7.98%, and XRP +1.66%.
🗞 What’s happening in the news?
💎 The Ethereum Foundation Sells AU$17 million worth of ETH: What’s The Plan?
The Ethereum Foundation (EF) has been making headlines recently for its massive sales of ETH. According to on-chain data, the foundation has sold over 3,766 ETH this year—equivalent to AU$16.9 million, based on current prices. The most recent sale of 100 ETH (worth AU$417,178) came just 30 minutes before the report was released.
These large-scale sales have sparked heated debates within the Ethereum community. Some members have criticised the foundation's transparency, while others have questioned its impact on the overall market.
Earlier in August, The Ethereum Foundation transferred 35,000 ETH, worth approximately AU$149 million at the time, to a centralised exchange.
The Ethereum Foundation’s annual spending is a topic of concern as well. Ethereum research team mentions that the foundation plans to release a financial report “relatively soon,” adding that the organisation spends about AU$156 million yearly and holds around AU$1.01 billion in its main Ethereum wallet. This budget strategy reportedly gives the foundation a 10-year runway, depending on ETH’s fluctuating value.
"The current approximate budget strategy is to spend 15% of our remaining money every year,"
stated Ethereum co-founder Vitalik Buterin on a community forum.
“This implies a default path where the EF lasts forever but gets smaller and smaller (as a share of the ecosystem) over time.”
The Ethereum Foundation’s financial activities are being closely watched by investors, particularly given that Ether remains the second-largest cryptocurrency by market capitalisation, behind Bitcoin.
🙊 NFT Market Sees Record-Low Sales Volume Since 2021
It’s been a challenging year for the NFT market, and September was no exception. Sales volumes plummeted to their lowest monthly figure since January 2021, dropping 20% month-on-month to AU$467 million, according to sources.
The number of total transactions also saw a steep decline, down 32% from 7.3 million in August to 4.9 million in September. Despite these negative numbers, one glimmer of hope emerged: the average value of NFT transactions increased by 18% to around AU$94.58 per transaction.
The decline in the NFT market could be partly attributed to increasing regulatory scrutiny. The U.S. Securities and Exchange Commission (SEC) has taken a hard stance against NFTs, issuing fines and warnings. In a recent case, the SEC fined Flyfish Club AU$1.17 million for selling NFTs that were deemed to violate securities laws.
Despite the regulatory hurdles, some industry leaders remain optimistic. Luca Schnetzler, CEO of the popular NFT collection Pudgy Penguins, dismissed the SEC’s actions as “nonsense,” implying that the crackdown won’t deter long-term growth.
With the NFT market facing turbulent times, it will be crucial to monitor whether this downturn is a temporary slump or a sign of a broader, more prolonged decline.
🪩 Bitcoin Mining Firm Clashes with Local Officials Over Noise Complaints
In an unusual legal case, Bitcoin mining firm NewRays is suing a judge and a prosecuting attorney in Arkansas, claiming they have selectively enforced noise legislation to target its operations. The dispute arose after local residents complained about noise levels from NewRays’ data centre, leading to the introduction of new regulations that impose strict decibel limits and criminal penalties.
NewRays argues that these ordinances violate the Arkansas Data Centres Act, which protects large-scale data operations like crypto mining from discriminatory legislation. The company claims that the judge and prosecutor coordinated to enforce the ordinance in a way that only impacts NewRays, despite other businesses generating similar or higher noise levels.
The lawsuit is ongoing, and the outcome could set a precedent for how local governments regulate Bitcoin mining and other energy-intensive computing activities. If NewRays succeeds, it could prevent other jurisdictions from enacting similar legislation aimed specifically at crypto firms.
“Data training centres for artificial intelligence do the same thing, yet I don’t hear the criticism,”
remarked Justin Daniels, a partner at Baker Donelson, hinting at a double standard when it comes to regulating emerging technologies.
This legal battle highlights the increasing tension between crypto companies and local communities, particularly as the industry continues to expand and encounter regulatory challenges.
📖 What we’ve been reading
Crypto Laws Are Coming No Matter Who Wins Election: Rep. Tom Emmer
Tom Emmer lays out his top crypto legislative priorities, and explained why he thinks they’re likely coming sooner than many expect.
‘Hamster Kombat’ and ‘Catizen’ Game Tokens Plummet by 50% After Telegram Airdrops
Two of Telegram’s biggest crypto games just dropped their tokens, but Hamster Kombat's HMSTR and Catizen's CATI are both falling fast.
Ethereum Restaking Project EigenLayer Set to Unlock Tokens at $6.7 Billion Valuation
Ethereum restaking protocol EigenLayer will unlock the EIGEN token for trading tonight, nearly four months after the first airdrop.
Disclaimer: The information provided is for educational purposes and does not constitute financial product advice. You should obtain independent advice from an Australian financial services licensee before making any financial decisions.
