On August 21, reports indicated ongoing fluctuations in the cryptocurrency market. As of the latest update, $Bitcoin (BTC.CC)$ decreased by 0.55%, reaching $113,964.99, whereas $Ethereum (ETH.CC)$ fell 1.10% to $4,317.76, marking a more than 3% increase over the past 24 hours.
The Federal Reserve released minutes from its July meeting, which showcased discussions among members about recent developments in payment stablecoins and their potential effects on the financial system. They noted that the recent enactment of the GENIUS Act (the US Stablecoin Guidance and National Innovation Act) may lead to an increased use of payment stablecoins, which are believed to enhance payment system efficiency. Furthermore, these stablecoins could drive up demand for supporting assets, such as US Treasury bonds.
Participants in the meeting expressed concerns about the broader implications of stablecoins on banks and the financial system, urging that different asset types backing stablecoins be closely monitored. The Federal Reserve officials continue to keep a vigilant eye on the expansion of stablecoins and associated risks following the passage of the GENIUS Act. Notably, stablecoins were referenced eight times in the meeting minutes according to various financial sources.
Federal Reserve Governor Waller emphasized the necessity of embracing technological advancements like artificial intelligence and stablecoins to bolster the US economy. In a speech at the Wyoming Blockchain Conference, he noted that utilizing new technologies for payment services isn’t a novel concept. Waller backed certain aspects of decentralized finance, underscoring that distributed ledger technology offers a more efficient means of tracking asset transfers.
Although Bitcoin saw a minor rebound, it remained under pressure after reaching a two-and-a-half-week low prior. LMAX Group strategist Joel Kruger highlighted that Bitcoin has been in an “adjustment mode” following last week’s peak, influenced mainly by unexpectedly high US wholesale inflation figures, which diminished market expectations surrounding interest rate cuts by the Fed.
Notably, Coinbase CEO Brian Armstrong predicted Bitcoin could potentially hit $1 million by 2030, given improved regulatory clarity in the US. Meanwhile, Cathie Wood, founder of ARK Invest, expressed optimism towards Bitcoin, Ethereum, and Solana. She highlighted Ethereum’s institutional potential and mentioned ARK’s investments in various blockchain companies, stressing the importance of transparency.
According to CryptoQuant, Bitcoin is experiencing a phase of decreased demand and profit-taking, with substantial declines noted since July. Ongoing insights indicate that despite market sentiment shifting to a more cautious stance, Bitcoin saw net gains amounting to $74 billion, positioning it to resist significant downturns. On a broader scale, Goldman Sachs’ latest research suggests the stablecoin market is rapidly developing and could evolve into a trillion-dollar industry, supported by escalating regulations and a vast payment market potential.
