Weekly Beluga Insights

After a strong rally into Trump’s speech at Bitcoin 2024 where we saw BTC touch $70,000 once again, it’s been followed by a sharp sell off pulling the rest of the market down with it. One of the factors in this dump was the US Government moving $2B in seized BTC right after Trump’s speech, during which he announced if elected he would prevent the government from selling any of its seized Bitcoin. In addition, growing conflicts in the middle east as well as weakness in traditional markets have not been good for crypto prices.

Crypto has once again come into the political eye during this wild election season, this time with Senator Lummis introducing a Strategic Bitcoin Reserve bill which, if approved, would compel the government to purchase 1 million BTC. While I don’t necessarily think this has much of a chance of being approved, this is a great shot in the dark to see which politicians will support our industry and which won’t. The market moves quickly but as always the Beluga team will be here to update our readers with everything they need to know, every week!

Major Movers of the Week

Public Trading Wallet Update

Alts have been crushed across the board once again as BTC itself dropped 11% since just last week. We look to be stabilizing here however, and taking a look at the ETFs we still have very strong inflows for Ethereum (which you can track via Nansen) and strong volume across the board. Despite prices falling everywhere else, one token that continues to move up is AAVE, the native token for the Aave protocol which is known colloquially as the “crypto bank”. In short, Aave facilitates the lending and borrowing of assets in a trustless and decentralized manner. The reason AAVE saw this price reversal is due to a proposal which was put through as a temperature check on July 25th, which would enact what is known as a “fee switch” to direct a portion of protocol profits towards buying back their own token.

This is an important move because currently there isn’t a direct value accrual mechanism for the token, it’s used purely for governance. There is staking, however the rewards are driven by emissions and therefore cause inflation on the token. If the model in the proposal were to go live, staking rewards would instead come from protocol buybacks of tokens already in circulation meaning a sharp reduction in inflation.

This is all certainly exciting and has caused a 30% price rally over the last week or so, however this is not something that will happen overnight. The proposal itself was just a temperature check and there are other pieces of the Aave offering that need to grow before they can start diverting revenue, such as their stablecoin GHO, so I expect prices to come down off this rally while we wait for the changes to be made. The crypto market has a notoriously short attention span so as the initial hype wave fades, I will look to accumulate with the Beluga Trading Wallet.

Quick Quips: Catch Up on What You Missed

• Polymarket Crosses $1B in Betting Volume

• Sen. Lummis Introduces Strategic Bitcoin Reserve Bill

• Coinbase Earnings Miss Estimates but Base Sees Spike

• Tether Reports Monster $5.2B Profit for the First Half of 2024

Tweet of the Week

The latest Celebrity memecoin launch was done by none other than NBA legend Scottie Pippen, and unfortunately it went the same way as every single other one.

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Disclaimer

The content on this site is for informational purposes only and should not be construed as investment advice. While Beluga strives to ensure the accuracy and timeliness of information, there may be discrepancies when comparing our data to that of financial institutions, service providers, or specific product websites. Always consult with a professional before making any financial decisions.

Will McKinnon is the Head of Content for Beluga and has spent every day for many years trading coins. For that reason there are too many to name, however his largest holdings by a significant margin are Ethereum and Bitcoin. NFA DYOR