Crypto Continues to Waver Amid Broad Selloff, While Centralized Exchanges See Uptick In Trading Volumes

Takeaways

• The market faced a broad decline over the past week: More than $162 million in crypto liquidations occurred last weekend, primarily from long positions, as US bitcoin ETFs experienced net outflows totaling $276 million. As of Thursday, the price of bitcoin had dropped to nearly $56,000.
• The SEC has expressed concerns over FTX’s proposed distribution of stablecoins to creditors: While FTX’s plan aims to repay 98% of creditors in cash, the SEC may take the stance that remaining distributions made in crypto violate federal securities laws.
• Cardano implemented its “Chang” upgrade, shifting control from its founding bodies to a decentralized governance structure using the ADA token: The long-awaited enhancement allows the community to vote on proposals and elect governance representatives.
• High-ranking Binance executive Tigran Gambaryan, detained in Nigeria since February, appeared in court on Monday in pain after being denied a wheelchair: His lawyers have filed for bail on medical grounds, citing multiple health issues, but the prosecution has opposed the request.
• Trading volumes on centralized cryptocurrency exchanges saw a roughly 6.6% MoM increase in August, reaching $1.2 trillion: Exchanges in North America experienced more than a 21% increase in activity compared to July.

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Bitcoin and Wider Market Face Headwinds

The cryptocurrency market experienced a broad decline week over week, with bitcoin trading at around $56,300 on Thursday. With a current price of roughly $2,400, ether followed a similar trend, trading around 11% lower at the start of this week compared to the start of the week prior. From Sunday to Monday this week, over $41.5 million in bitcoin long positions were liquidated on centralized exchanges, contributing to a total of $50 million in bitcoin liquidations.

The broader cryptocurrency market saw liquidations exceeding $162 million, with around $135 million originating from long positions. US spot bitcoin ETFs didn’t fare well either, with net outflows of roughly $276 million being logged last week. Bitcoin miners also generated just $20 million from on-chain fees over the course of August – marking a yearly low.

However, some believe that upcoming US economic data could give a positive lift to the price of bitcoin. If monetary policy eases as a result of a weak September employment report, investors might be willing to contribute to positive price action and positive bitcoin ETF inflows.

SEC Poses Potential Challenge to FTX Bankruptcy Plan

The SEC has signaled a potential challenge to the confirmation of FTX’s bankruptcy plan, according to a recent court filing.The regulatory body has raised concerns about any potential distributions involving crypto assets to FTX creditors, signaling that it could violate US securities.

The FTX bankruptcy estate had proposed a plan that would allow 98% of creditors to recover 118% of their cash funds owed within the course of two months after being approved. The SEC has raised issue with the definition of “cash,” which included USD-pegged stablecoins under the term. This definition could result in the full reimbursement of FTX creditors being delayed, if the regulatory body decides to take further action.

It’s important to note that the SEC has yet to take an official stance on the legality of using stablecoins to reimburse creditors of the platform. However, regulators reserved the right to challenge these transactions, which could be dependent on factors such as what organization handles the distribution of the proposed stablecoin releases – which has not yet been decided.

Cardano's "Chang" Upgrade Activates, Bringing Decentralized Governance

Cardano, the blockchain launched by Ethereum co-founder Charles Hoskinson, has launched the long-awaited "Chang" upgrade, which significantly alters the governance process of the ecosystem. Specifically, the upgrade allows ADA token holders to vote on proposals to change the network, and contribute to electing governance representatives.

This change is detailed in CIP-1694, which introduces three new governance bodies: the Constitutional Committee, Delegate Representatives (dReps), and Stake Pool Operators (SPOs). The newly implemented decentralized governance enables greater community control by reducing centralized control, but more importantly provides ADA with additional utility, which could help mitigate regulatory concerns. As it stands, the blockchain’s ADA token has yet to experience a price-boost as a result of the upgrade, and is currently sitting at a price of around $0.32.

Binance Executive Tigran Gambaryan Denied Medical Bail in Nigeria

Binance compliance head Tigran Gambaryan, detained in Nigeria since February, appeared in a courtroom in Abuja on Monday, visibly struggling to move. Gambaryan has requested a wheelchair but was denied by prison authorities. In a video uploaded to X, Gambaryan, clearly in distress, asked for help while being escorted by a prison guard into the courtroom. Gambaryan was heard exclaiming “I’m not okay, this is (messed) up,” while clinging to a guard's wrist to support himself. When the guard stepped away, he was left relying on a single crutch.

On Monday, his legal team filed a new bail application on medical grounds, urging the court to release him so he could receive necessary medical treatment for several conditions, including malaria, pneumonia, tonsillitis, and a severe back injury that has reportedly nearly rendered him immobile. A family spokesperson has stated that these conditions require immediate surgery.

The prosecutor for the Economic and Financial Crimes Commission (EFCC) opposed the bail application and disputed the severity of his health issues. The prosecutor additionally claimed that Gambaryan was refusing treatment. This was Gambaryan’s second attempt at securing bail, with his previous application being denied in May. Representatives for Gambararyan have also claimed that he has faced restricted access to both his legal team and US embassy officials.

Centralized Crypto Exchange Volumes Continue Growth in August

In August, trading volumes on centralized cryptocurrency exchanges continued their upward trajectory, after hitting a multi-month low in June. Global cryptocurrency exchanges saw their monthly spot market volumes broadly climb to $1.2 trillion, marking a 6.6% increase from July’s $1.12 trillion.

Exchanges serving North American customers experienced a particularly significant boost, with monthly spot market volumes rising to almost $167 billion in August from around $137 billion in July, marking an increase of more than 21%. This upward trend in exchange trading volumes contrasts with the peak earlier in 2024 when volumes reached $2.48 trillion in March, coinciding with bitcoin’s all-time high of more than $73,000.

These increasing centralized exchange volumes could potentially signal more bullish trends for the industry in the coming months. However, upcoming economic announcements by the US Federal Reserve in mid September will likely have more noticeable effects on sentiment.

-The Gemini Team