Crypto Market Gains $220 Billion in 1-Week: Here are 8 Things to Know

Crypto Markets Analysis:

The global cryptocurrency market capitalization grew by $220 billion within the 7-day timeframe, here are 8 major events driving the crypto markets’ post-Fed rate cut rally.

1. Bitcoin Price hit 25-Day Peak after Fed’s 0.5% Rate Cut

On September 18, 2024, the U.S. Federal Reserve announced a 0.5% interest rate cut, signaling a more dovish stance on monetary policy, than the 0.25% easing that many analysts had expected.

The crypto markets responded promptly, as Bitcoin surged past $64,000, a key psychological level, and recorded its highest price in the past 25 days.

The move has since been following by growing speculation that more rate cuts in before the year-end would create a steady flow of liquidity within risk-on assets markets including cryptocurrencies.

As investors seek shelter from inflationary pressures by piling into risk assets, Bitcoin has received persistent institiuonal demand since the Fed rate cut . This rally solidified Bitcoin’s position in the bullish zone, with the potential to break through higher resistance levels.

2. SEC Approves Options Trading for BlackRock’s Bitcoin ETF

On September 20, 2024, the U.S. Securities and Exchange Commission (SEC)  approved options trading for BlackRock’s Bitcoin ETF. The Spot BTC ETF, which launched in January 2024, has already driven significant institutional interest in Bitcoin.

Hence, the introduction of options trading heightened speculation of more sophisticated institutional strategies entering the crypto space.

This move by the SEC is viewed as another giant-stride towards mainstream adoption of Bitcoin in traditional financial markets.

Options provide traders with hedging opportunities and allow for more precise market exposure, fueling confidence in Bitcoin’s price stability.

Following this news, Bitcoin’s price saw increased momentum, reaching a weekly highs around $64,500, which trading volumes also spiked as institutional investors moved to position themselves in both spot and derivatives markets.

3. Binance Denies Involvement in WazirX Cyber-Attack

Binance, the world’s largest cryptocurrency exchange, found itself embroiled in controversy on September 22, 2024, when rumors spread that it was implicated in a cyber-attack on the India-based exchange WazirX.

WazirX had previously been associated with Binance through partnerships and business relations. However, Binance quickly issued a public statement denying any involvement in the attack.

In July 2024, a sophisticated cyber-attack, which compromised $235 million worth of digital assets, left WazirX in a precarious position, as confirmed by Blockchain intelligence firm Elliptic Research.

Binance’s prompt denial helped quell the panic in the markets, but WazirX continued to struggle with liquidity as it worked to recover the lost funds. Despite this, Binance’s reputation remained intact, and the price of Binance Coin (BNB) stabilized after an initial dip in reaction to the news.

4. WazirX Struggles to Recover $235M

On September 22, 2024, WazirX reported that it was still actively working to recover the $235 million stolen in the cyber-attack. The attack, which occurred earlier in the week, was one of the largest cyber thefts in India’s crypto sector. WazirX had temporarily halted withdrawals, leading to concerns about its solvency.

While the exchange attempted to reassure users, the market sentiment remained wary. Liquidity issues persisted, leading to a further decline in WazirX’s token value. The inability to recover the funds within 72 hours added pressure to an already fragile situation, causing many traders to move their assets to other exchanges.

5. Trump Family’s DeFi Platform to Launch WLFI Token

September 21, 2024 saw official the announcement of the Trump family’s DeFi platform launching its first token, World Liberty Financial (WLFI).

The decentralized finance (DeFi) platform, which had been in development for months, promised to provide users with new decentralized financial services centered around lending, borrowing, and staking.

The announcement stirred excitement in the DeFi community, especially among retail investors. WLFI was positioned as a token that would facilitate transactions within the Trump family’s DeFi ecosystem.

The initial reaction from the market was positive, with traders and investors speculating that the token could quickly become one of the top DeFi tokens in circulation. Crypto markets saw an uptick in trading volume following the news, with DeFi tokens showing particular strength.

6. Ethereum Foundation Sells 300 ETH for $760K, Triggering Crypto Market Wobble

On September 22, 2024, the Ethereum Foundation made headlines by selling 300 ETH, valued at $760,000 at the time. The sale, while relatively small compared to Ethereum’s total circulating supply, attracted attention due to its timing. Some traders speculated that the Foundation was selling ETH in anticipation of short-term price fluctuations.

The sale created a minor dip in Ethereum’s price, which briefly fell below $1,800. However, the overall bullish momentum in the broader market quickly absorbed the selling pressure. Ethereum’s price stabilized above $1,820, and traders remained focused on its longer-term growth prospects. The Foundation’s sale was seen as a strategic move to manage treasury risks, rather than a lack of confidence in Ethereum’s future price potential.

7. Binance Founder CZ Scheduled for Release on September 29th

Binance’s founder and CEO, Changpeng “CZ” Zhao, is scheduled for release from house arrest on September 29, following his highly publicized legal battle in the U.S. CZ had faced charges related to regulatory violations and allegations of unregistered securities offerings, resulted in plea deal that also saw Binance exchange pay fines in excess of $4.6 billion.

The news of CZ’s imminent release sent Binance Coin (BNB) prices soaring. Traders speculated that CZ’s return to the helm of Binance would provide the company with the leadership needed to navigate its legal and regulatory challenges.

BNB rose 4% on the day of the announcement, extending it weekly timeframe gains to 12% as investors anticipated a strong fourth quarter for the exchange and its native token.

8. MicroStrategy Adds 7,420 Bitcoin for $458M

Sept 20, 2024 , Michael Saylor announced another major Bitcoin purchase by MicroStrategy, which added 7,420 Bitcoin to its holdings.

The purchase, valued at $458 million, brought MicroStrategy’s total Bitcoin holdings to 252,220 BTC, worth nearly $16 billion. MicroStrategy’s CEO, Michael Saylor, reiterated the company’s long-term belief in Bitcoin as a store of value.

This latest accumulation solidified MicroStrategy’s position as the largest corporate holder of Bitcoin, with the company controlling approximately 1.2% of Bitcoin’s total circulating supply.

The market viewed this purchase as a bullish signal, reinforcing the belief that institutional demand for Bitcoin remains strong despite market volatility. Bitcoin’s price reacted positively to the news, with a 2% rise within hours of the announcement.

Recap: Crypto Market Adds $220B, More Gains Ahead?

This week was marked by significant events that reshaped the crypto market’s landscape. Bitcoin breaking $64K after the Fed’s rate cut set the tone for the bullish sentiment that followed.

The SEC’s approval of BlackRock’s Bitcoin ETF options trading opened the door for more sophisticated financial instruments in the crypto space. Meanwhile, Binance managed to weather the storm from WazirX’s cyber-attack, maintaining its dominance in the exchange market.

The broader crypto market cap rising to $2.21 trillion underscored the renewed investor confidence in digital assets, and institutional demand, as evidenced by MicroStrategy’s massive Bitcoin purchase, continues to serve as a key pillar of support for Bitcoin’s price.

Heading into the final week of the month, the market looks poised for further gains.