Key Points
- Global events have left Bitcoin’s price movement stagnant and reduced buying activity.
- Ethereum’s limited supply due to Layer-2 adoption and smart contracts could potentially cause a price surge.
Despite Bitcoin (BTC)‘s resilience against the German government’s sale of 40,000 coins, market conditions have been challenging.
This has erased gains made since Bitcoin’s all-time high in March.
Global Events Impact Bitcoin
The lack of buying activity for Bitcoin is attributed to heightened market volatility due to global events such as the U.S. election, UK riots, Middle East tensions, and shifts in Japanese central bank policy.
Market participants initially bought the dip during the German sell-off.
However, recent market volatility has reduced interest in risk assets, resulting in minimal buying activity for Bitcoin.
Despite the unexpected supply from Germany, the markets show no net additions.
Since Bitcoin’s peak in March, ETFs have only added 40,000 coins, and prices are currently trading within the same range observed during the German sell-off.
End of Year Surge for Ethereum?
Ethereum’s (ETH) supply dynamics are under scrutiny as Layer-2 adoption has returned the asset to an inflationary state since mid-April.
A significant portion of ETH is being locked into smart contracts, which could potentially reduce the circulating supply and create upward price pressure by the year-end.
As of Aug. 12, 66% of Ethereum addresses are in profit, with ETH trading just above $2,600.
This is an increase from last week when only 63% were profitable.
However, this is still lower than the 75% in profit when ETH was above $3,159 earlier in the month, with 3.59 million addresses needing a price rise to between $2,679 and $2,755 to turn profitable.
Growth in Tokenized Assets
Tokenized assets are experiencing remarkable growth, with blockchains adding over $1 billion in tokenized government products this year.
McKinsey recently projected the market value of tokenized real-world assets could reach up to $4 trillion by 2030, driven by factors like mutual funds and bonds.
BlackRock’s BUIDL product has contributed to over half of this increase, signaling strong market momentum.
Other products, including Franklin Templeton’s BENJI 0.6 and Ondo Finance’s USDY and USDG, are also gaining significant traction.
