Markets
German Bitcoin Sales, US CPI Data and More
This week, the German government’s ongoing Bitcoin (BTC) selloff has significantly impacted the cryptocurrency market. The release of the US Consumer Price Index (CPI) data has also introduced more complexity to the economic landscape.
Meanwhile, a security Compound Finance website breach raised alarms in the decentralized finance sector (DeFi) community, highlighting security concerns. These developments sent ripples through the market, marking another volatile week.
Experts assess future impact of Bitcoin sales in Germany
This week, the German government continued with its Bitcoin liquidationssignificantly affecting the cryptocurrency market. Data from Arkham Intelligence revealed that Germany’s Bitcoin holdings have fallen from 42,000 BTC on July 5 to 6,000 BTC currently.
The government portfolionow holding approximately $349.17 million in BTC, has transferred Bitcoins to multiple addresses. These transactions include cryptocurrency exchanges like Kraken, Coinbase, Bitstamp, and market makers like Cumberland and Flow Traders.
Read more: Who owns the most Bitcoin in 2024?
German Government Bitcoin Holdings. Source: Arkham Intelligence
The persistent liquidations have undeniably shaken the market, with Bitcoin’s price reflecting the ongoing wave of selling. When Germany began these transfers on June 19, Bitcoin was trading at around $65,000. It has since fallen to $57,000.
However, industry experts believe that as the wallet balance decreases, the sales will end. Consequently, the impact on the price of Bitcoin will gradually decrease.
US CPI data provides a glimmer of hope for inflation
Bitcoin saw a notable price jump, reaching $59,313 immediately after the Bureau of Labor Statistics (BLS) released the US Consumer Price Index (CPI) data for June. Inflation in the US has fallen to 3% year-over-year, slightly below market expectations of 3.1% and down from 3.3% in May. This data suggests a 0.1% month-over-month decline.
Federal Reserve Chairman Jerome Powell’s recent testimony before Congress highlighted that the Fed is not yet ready to cut interest rates. Powell emphasized that the inflation the rate must show sustained progress toward the 2% target before any rate cuts can be considered. This cautious approach aligns with the latest CPI figures.
Lower-than-expected inflation is generally positive for the crypto market. Cryptocurrencies, often considered risk assets, tend to react optimistically to favorable economic indicators, such as low inflation. Jag Kooner, Head of Derivatives at Bitfinex, shared his perspective on the recent CPI data release with BeInCrypto.
“Today’s lower-than-expected CPI reading signals a more significant slowdown in inflation. This could reinforce market expectations for a rate cut in September, boosting both stocks and cryptocurrencies by increasing liquidity and risk appetite,” Kooner explained.
Cardano’s Chang Hard Fork is Nearing Completion
In a live ask me anything (LOVE) session on YouTube, Cardano founder Charles Hoskinson confirmed that the Chang hard fork is practically ready and will be released next week. He also celebrated the completion of all elements of Cardano Improvement Proposal (CIP) 1694, which is essential for the advancement of Cardano’s infrastructure.
The Chang fork will introduce Delegates (DReps) elected by Cardano token (ADA) holders. These representatives will draft the Cardano constitution, establishing the supreme law of the network.
Recently released At the 9.0 supports the initial phase of CIP-1694 in production environments, but does not yet include DRep voting and all governance activities. They will be available in Node 10.0.
Named after Cardano enthusiast Phil Chang, who passed away two years ago, the Chang hard fork aims to change the ownership structure of the Cardano blockchain, ushering in the Voltaire era and fully decentralizing the network’s governance.
Data from Cardanoscan shows that exchanges and stake pools are not yet ready for the hard fork despite this update. However, the Cardano community remains optimistic about the network’s impending changes.
Binance delists four altcoins, prices plummet
On Monday, Binance, the world’s largest cryptocurrency exchange by trading volume, announced would not support four more altcoins: BarnBridge (BOND), Dock (DOCK), Mdex (MDX) and Polkastarter (POLITICIANS). This exclusion will take effect on July 22nd at 03:00 UTC.
Following the announcement, the affected tokens saw significant price declines. DOCK plummeted by nearly 30%, MDX dropped by 23.65%, and BOND and POLS saw losses of over 17%. However, prices have recovered slightly since the initial drop.
DNS attack targets multiple DeFi platforms
On Thursday, Compound Labs, the team behind Compound Finance, announced that your website has been compromised. About three hours later, Celer Network issued a similar warning, indicating a potential DNS domain attack affecting multiple projects simultaneously.
Blockchain security experts including DefiLlama founder 0xngmi and Paradigm researcher Samczsun suspect that vulnerabilities in Squarespace, the website registrar, may be linked to the breaches. 0xngmi highlighted that around 65 other DeFi platform domains connected to Squarespace may be at risk, urging the community to avoid these sites for now.
Web3 Security Company Blockaid shared their analysis, indicating that attackers hijacked DNS records of projects hosted on Squarespace. The Pendle team also commented on this incident, assuring that their domain and funds are safe. Despite these security breaches, the team claimed that the Pendle protocol and smart contracts remain unaffected.
This week also saw developments in celebrity meme coins. Daddy Tate (DADDY), a Solana-based meme coin related to controversial influencer Andrew Tate, reached more than 55,000 holders. Data from DEX Screener shows that DADDY is currently trading at $0.1380 with a market cap of $82.7 million.
Read more: Top 11 Solana Meme Coins to Watch in July 2024
Additionally, the cryptocurrency market has been buzzing with Argentine footballer Lionel Messi joining the list of celebrities promoting meme coins via social media. However, some believe Messi’s Instagram account was hacked to promote WATERother Solana meme coin.
Despite speculation, the post was not removed, and Messi did not report that his Instagram account was compromised. This led to disappointment among fans and further speculation within the crypto community.
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