The cryptocurrency market has been under pressure in recent days, with Bitcoin (BTC) and other digital assets experiencing a decline in value. This downturn can be attributed to the rising expectations of an interest rate hike in the United States. The odds of a rate hike have increased, with futures markets now indicating a greater than 70% chance that the U.S. Federal Reserve will raise interest rates by 25 basis points at its meeting on September 16.
Higher interest rates are generally negative for risk assets such as cryptocurrency, as they increase the cost of borrowing and reduce the attractiveness of investments that offer higher returns but are also riskier. As a result, Bitcoin has fallen below $80,000, trading at around $77,500 at the end of the week. Other digital assets, including Ethereum (ETH), have also experienced a decline in value, with Ethereum's price hovering around $2,500.
Despite the pullback, crypto prices remain sharply higher than they were a month ago, when Bitcoin was trading below $65,000. This indicates that the market is still recovering from the recent downturn and that investors are optimistic about the long-term prospects of cryptocurrency.
Strategy Holds Off On Bitcoin Purchases
Strategy, a company known for its serial crypto acquisitions, has announced that it will not be purchasing any Bitcoin in the near future. Instead, the company has focused on repurchasing 1.81 million shares of its preferred stock for $176.3 million. Strategy has also increased the total allowable repurchase amount of its preferred stock to $2 billion from $1 billion.
This decision suggests that Strategy is prioritizing its existing investments and is not looking to add to its Bitcoin holdings at this time. The company's preferred stock repurchase program is a way for Strategy to return value to its shareholders and to reduce its outstanding share count.
U.S. Bancorp Prepares To Launch Stablecoin
U.S. Bancorp, the fifth-largest lender in the United States, is preparing to launch its own stablecoin. The stablecoin, called USBDC, is pegged one-for-one to the U.S. dollar and is designed to facilitate cross-border payments. U.S. Bancorp has completed a live cross-border payment using the stablecoin and is now exploring broader uses for the technology.
The launch of a stablecoin by a major financial institution like U.S. Bancorp is significant, as it demonstrates the growing acceptance of cryptocurrency and blockchain technology in the traditional financial sector. Stablecoins are designed to provide a stable store of value and are often used as a hedge against the volatility of other cryptocurrencies.
Ethereum Foundation Sets Goal To Make Blockchain Quantum-Resistant
The Ethereum Foundation has set a goal to make its blockchain and related infrastructure resistant to quantum computer attacks by 2029. This is in response to the growing threat of quantum computers, which are expected to be able to break today's cryptography by 2030.
The Ethereum Foundation is taking the threat of quantum computers seriously and is working to develop a quantum-resistant blockchain. This will involve implementing new cryptographic algorithms and protocols that are resistant to quantum attacks.
Other Notable Developments
In other news, Coinbase CEO Brian Armstrong has stated that he believes Bitcoin has bottomed and expects it to move higher over the next two years. Bybit is planning to launch a new super app in Europe that will offer both a regular bank account and stock and crypto trading. Nasdaq has invested $100 million in Payward, the parent company of cryptocurrency exchange Kraken. Polymarket has appointed its first chief financial officer, Warren Jenson, who previously served as CFO at Amazon. Bitwise Asset Management is liquidating and closing its Dogecoin ETF after 10 months of trading. Sam Bankman-Fried has petitioned the U.S. Supreme Court to overturn his fraud conviction. Crypto platforms around the world lost nearly $4 billion over an 18-month period due to cyberattacks.
What To Watch Next
The cryptocurrency market is likely to remain under pressure in the coming weeks as investors continue to assess the impact of rising interest rates on the market. The launch of U.S. Bancorp's stablecoin and the development of a quantum-resistant Ethereum blockchain are also significant developments that will be worth watching in the coming months. Additionally, the outcome of Sam Bankman-Fried's appeal to the U.S. Supreme Court and the performance of crypto platforms in the face of cyberattacks will be closely watched by investors.
