August 2024 Recap of Digital Assets Industry
Most digital assets fell sharply in August as fundamental usage and financial statistics fell against rising volatility. In August, Bitcoin (BTC) fell 11% and Ethereum (ETH) -24% versus the S&P +2% and the Nasdaq +1%. The market capitalization of all Smart Contract Platforms (SCP) was lower (-12%) than it closed in July.
Besides macro factors driving prices lower, blockchain usage dipped in August. For instance, daily active users dropped (-10%), fees generated dropped (-12%), and DEX volumes dropped (-4%) compared to July.
The US and German governments also transferred roughly 62,000 Bitcoin to exchanges, presumably for sale, while Mt. Gox and Gemini bankruptcy distributions totaled another 124k Bitcoin. Further weakening prices at month-end, the SEC sent a Wells Notice to OpenSea, one of the largest NFT exchanges, claiming that it's an unregistered broker. The action is another sign that regulation by enforcement may continue in the US unless the Republicans win the election.
Tyler Winklevoss, a co-founder of crypto exchange Gemini, publicly urged crypto investors to pressure VP Kamala Harris to fire anti-crypto SEC Chair Gary Gensler. Winklevoss posted, "If all 50 million [crypto investors] made it clear to Harris that she wouldn’t get their vote unless she fired Gary Gensler and ended the war on crypto before November 5th, the war would end and crypto would become bipartisan overnight. That’s the game theory. Voters could then move on to other issues."
Telegram’s co-founder and CEO Pavel Durov was arrested in France in August over allegations that Telegram failed to moderate illegal content on its platform, including drug trafficking, child exploitation, and fraud. The arrest impacted the crypto market because Telegram has 900 million monthly active users and hosts one of the largest blockchains—The Open Network (TON)—in the world. The news caused TON's price to dip from around $7 to nearly $5.50.
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