CoinLoan Weekly: Hawkish Fed, BTC at $20,000, 320 million crypto owners
BTC spent four days above $21,000, with a 7-day peak of $21,753.13 on Wednesday, August 24. Jerome Powell’s speech on Friday, August 26, cut its uptick short, sending the coin down to around $20,700 and deeper over the weekend. In the early hours of Monday, August 29, BTC plunged to a low of $19,659.25.
The Crypto Fear & Greed Index hovered between 25 and 28, indicating a fear-gripped market. Fed’s hawkish stance expressed by its Chair accounted for the latest plunge taken by cryptocurrencies and equities. On Sunday evening (August 28), BTC dropped to levels last seen on July 13.
As of this writing, BTC is trading at $20,108.83, with a 24-hour gain of +0.5% and a 7-day slide of -7.0%
Ether’s promising climb culminated at $1,713.59 on Thursday, August 25. The next day, the coin collapsed to a level comparable to July 26. Powell’s speech triggered a steep fall to around $1,560, and ETH tumbled again during the weekend. Monday, August 29, brought a low of $1,433.57.
Friday’s selloff caused ETH to lose over 12% in under 24 hours. Bulls hope the hype around the Merge will continue bolstering it in the short term. Yet it is also possible for the transition to go awry. Traders are placing bets in ETH derivatives and spot markets in anticipation of price dynamics.
As of now, ETH is trading at $1,536.60, with a 24-hour climb of +3.3% and a 7-day loss of -5.4%.
The Fed's stance had a milder effect on XRP. After trading around $0.35, the token peaked at $0.369021 on Friday, August 26, and dropped to $0.337089 following the news. Through the weekend, XRP was trapped just under $0.34, and it sank deeper to $0.321458 on Monday, August 29.
Friday’s spike appeared to reflect whales’ activity — three transfers worth $51 million pushed XRP to a two-week high. The market was also responding to the announcement of the Ripple Swell Global 2022 event. In the months ahead, court rulings in the SEC vs. Ripple case are expected to be the key driver.
As of now, XRP is trading at $0.331247, with a 24-hour slip of -1.7% and a 7-day change of -4.6.
Hawkish Fed sends Bitcoin back to $20,000
Monday, August 29, brought the fifth day of declines for BTC. Continued trading below $20,000 was last seen in mid-July, while August pushed the coin above $25,000. Federal Reserve Chair Jerome Powell triggered the plunge by emphasizing the government’s resolve to tame inflation.
Speaking at the Jackson Hole conference on Friday, August 26, Powell explicitly stated that the interest rates could remain high. “Restoring price stability will likely require maintaining a restrictive policy stance for some time. The historical record cautions strongly against prematurely loosening policy,” he said.
This speech sent BTC below $20,000 — its previous support level — and the coin rebounded to trade around it. According to Venn Link Partners CEO Cici Lu, the decline followed the sentiment in the U.S. stock market. “Money is flowing out of risky assets [...] Markets didn’t like what he had to say and Bitcoin is resuming as a high-beta asset.”
Powell’s speech inevitably affected equities, with a slump observed across Europe, Asia, and futures in the US. Stocks sank, The Dow Jones Industrial Average lost over 1,000 points (3.03%) on Friday, while S&P 500 and Nasdaq Composite shed more. The uncertainty around the magnitude of new hikes and their effects on risky assets exacerbated the sentiment.
Many experts perceive $20,000 as a key level for BTC. The coin could find support even lower — between $18,300 and $19,500, according to Katie Stockton, founder and managing partner at Fairlead Strategies. Fundstrat’s chief strategist Mark Newton sees major areas in the vicinity of $19,000, with a “real area of importance” around $17,500, close to the June intraday lows.
Global crypto ownership exceeds 320 million users
According to a study by TripleA, a Singapore-based cryptocurrency payments firm, over 320 million people, or roughly 4.2% of the global population, use crypto. The company analyzed data from 16 surveys and reports to “obtain the most encompassing and accurate set of statistics.”
Most users (46 million) reside in the US, followed by India (27 million) and Pakistan (26 million users). Yet continent-wise, North America, with its 51 million crypto owners, is no match for Asia (130 million). It comes third after Africa (53 million), ahead of Europe (43 million).
Globally, crypto ownership is dominated by males (63%) and users under the age of 34 (72%). An overwhelming majority of crypto owners (71%) have at least a Bachelor’s degree.
The growth trajectory since 2014 appears to mirror the internet adoption of the 1990s. Bitcoin’s price ballooned by a whopping 540,000% between 2012 and 2021, with a gain of 60% and nearly half of the total market cap last year. Looking ahead, the authors project a compound annual growth rate of 56.4% between 2019 and 2025.
Analyzing the impact across industries (e-commerce, luxury, remittance, and gaming), TripleA found that 85% of US-based merchants prioritize implementing crypto payments. The findings also include the average growth in ROI and customer base (327% and 40%, respectively) among businesses accepting digital assets, according to Forrester Consulting.