Bitcoin market review for August and future outlook: Market attention shifts from US interest rate trends to economic trends

I'm Mari Matsushima, a.k.a. Marin, a cryptocurrency analyst at Monex Securities. This time, I'll be looking back at the Bitcoin market and giving my outlook for the future.

A look back at August and future market outlook

In August 2024, Bitcoin fell sharply to the 7 million yen range as global risk aversion intensified amid a historic crash in the Nikkei average. The Bank of Japan's decision to raise interest rates led to a rapid appreciation of the yen in anticipation of the narrowing of the interest rate gap between Japan and the United States, which led to the unwinding of yen carry trades, and the worsening of the July employment statistics in the United States led to concerns about a recession in the United States. This led to a combination of factors that led to increased selling of risk assets.

After that, the Bank of Japan denied the possibility of an early additional interest rate hike, which subsided market turmoil, and Bitcoin rebounded strongly along with stocks. At one point, the price returned to the 9 million yen range, but there were concerns such as the worsening situation in Iran and Israel and the US government's selling of Bitcoin, and the market continued to fluctuate. There was also a movement to keep a close eye on the contents of the Jackson Hole Conference, and a wait-and-see mood spread in the market.

Although the global situation remains unclear, we believe that Bitcoin's price may gradually rise in the future. Market interest is shifting from interest rate trends to economic trends in the United States, and if economic indicators released after September or the next FOMC meeting cause concerns about a US recession to resurface, selling pressure on risk assets in general is expected to intensify.

In addition, if a war breaks out between Iran and Israel, the risk of a short-term decline cannot be denied. However, in an environment where recession and geopolitical risks are strongly considered, Bitcoin's nature as digital gold, like gold, may attract attention and buying may become dominant to protect assets.

If there are signs that Bitcoin is differentiated from other risk assets and begins to play the role of a safe asset, it is possible that buying through physical ETFs will also help Bitcoin regain its upward momentum at once.

Marin's noteworthy stocks: Aptos (APT) and Sui (Sui)

This time, we will introduce Aptos (APT) and Sui (Sui), which are attracting attention as emerging layer 1 blockchains. Both were launched by former members of the private digital currency "Diem (formerly Libra)" led by Meta (formerly Facebook), and are known as projects that originated from the same source. APT and Sui adopt the proprietary language "Move" used in Diem and develop high-speed blockchains that excel at parallel processing.

Sui is inferior to APT in terms of market capitalization, but is growing rapidly in the decentralized finance (DeFi) market by offering higher profitability than APT. On the other hand, APT announced the introduction of the major stable coin USDT in August 2024, ahead of Sui, and is trying to increase the inflow of funds into the network. In Japan, Sui has also signed partnerships with GREE and gumi in the field of blockchain games.

Meanwhile, APT has indicated its intention to strengthen its activities in Asia, including Japan, through its partnership with Alibaba. In the future, if APT and Sui can continue to compete with each other and grow as high-speed blockchains like Solana, it is likely that their prices will increase in the medium to long term.

Profile

◉Masamichi Matsushima
Monex Securities Monex University Crypto Asset Analyst

Graduated from the Faculty of Economics at Osaka University. After leaving a city bank, he was a founding member of a crypto asset-related startup and engaged in industry research and market analysis. Joined the Monex Group in 2018. At Monex Crypto Bank, he wrote industry research reports such as "Blockchain Trends in China (2020)" and "Blockchain Data Book 2020," and currently oversees the Web3 newsletter and research report "MCB RESEARCH." He also contributes to many domestic media outlets. He has been in his current position since March 2021.

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