Santiment, a crypto data provider, highlighted a noteworthy trend via its latest tweet. Bitcoin and Ethereum’s exchange supply has resumed its downward trajectory, signaling that traders are more inclined to “hodl” or hold onto their assets. This sentiment bodes well for the long-term prospects of these leading cryptocurrencies.
Even more encouraging is the resurgence of Tether (USDT) in cryptocurrency exchanges. Tether, a stablecoin often used as a bridge between crypto and traditional financial markets, has reached its highest exchange supply level since March. This surge in Tether availability suggests an increased appetite for buying into the crypto market.
In the broader financial landscape, a cloud of uncertainty looms over the United States. The possibility of a government shutdown next month is growing more likely due to internal conflicts within the Republican party.
Such an event would disrupt the release of critical economic data and shine a spotlight on the dysfunctional state of U.S. politics, potentially unsettling international investors. Interestingly, this turmoil in traditional markets could drive more investors towards cryptocurrencies like Bitcoin as a safe haven asset.
Bitcoin’s Resurgence & Ethereum’s Mixed Signals
According to Coinshares report, Bitcoin is experiencing a resurgence in trading volumes, averaging an impressive $4.5 billion daily over the past two weeks. Additionally, a substantial influx of 25 million BTC shorts has been observed this month, prompting the question: Is it time to go long on Bitcoin? Accumulation trends among investors since late August suggest growing optimism in Bitcoin’s price potential.
Meanwhile, the cryptocurrency exchange giant Binance finds itself embroiled in an ongoing saga. Binance US recently announced a significant reduction in staff, with its President and Chief, Brian Shroder, departing amidst mounting regulatory pressure from the U.S. Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC).
Turning attention to Ethereum, the world’s second-largest cryptocurrency, the market has mixed signals. While the Ethereum validator queue has shortened significantly in just one week, indicating a strong demand for staking rewards, there has been a notable outflow of 100 million ETH year-to-date.
Despite this, Ethereum remains an attractive option for investors, offering a staking yield of 4%, surpassing the 2.8% yield seen for the average tech stock. Ethereum’s successful transition from Proof of Work (PoW) to Proof of Stake (PoS) and the doubling of its validator count are signs of a promising future.
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