Crypto Traders’ Negative Sentiment Seen as Temporary
Crypto market sentiment has shifted toward increased fear and uncertainty amid recent Bitcoin price declines, according to Santiment’s Tuesday report. However, analysts suggest this downturn is likely transient. Santiment noted that markets often move contrary to prevailing trader expectations, indicating that the recent surge in fear may signal a bottom rather than a further decline.
Pav Hundal, lead analyst at Swyftx, highlighted that the Federal Reserve’s upcoming meeting will be a critical event, with any potential rate cut seen as a possible catalyst for positive market momentum. Charlie Sherry, head of finance at BTC Markets, observed that extreme bearish sentiment often marks the end of downward trends rather than their beginning.
CK Zheng, co-founder and CIO of ZX Squared Capital, pointed out that September historically registers the poorest equity returns, contributing to the cautious stance among traders this month.
US Senate Democrats Unveil Alternative Crypto Market Structure Framework
In response to Republican-led legislative efforts, twelve Democratic senators, including several members of the Senate Banking Committee, introduced a competing framework aimed at shaping crypto market regulations. The Democrats’ proposal stresses the importance of a thoughtful, bipartisan approach to establishing clear rules governing digital assets.
Similar to the Republicans’ draft released on September 5, the Democratic framework calls for regulatory clarity and defines the roles of the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) in overseeing digital assets. The senators emphasized the need to protect consumers, secure market integrity, and prevent the misuse of cryptocurrencies for illicit activities or political profiteering.
Given the Democratic minority status in the Senate, it remains uncertain whether Republican lawmakers will incorporate this framework into their legislative agenda. Senate Banking Committee Chair Tim Scott has expressed optimism about bipartisan support for the Responsible Financial Innovation Act, targeting committee approvals by October and November and aiming for enactment by 2026.
“Achieving a strong, bipartisan outcome will require time and cannot be rushed,” the Democrats stated, signaling a willingness to collaborate with Republican counterparts.
Nasdaq Invests in Gemini’s IPO to Access Crypto Services
Nasdaq has secured a strategic investment in Gemini, the cryptocurrency exchange founded by the Winklevoss twins, ahead of Gemini’s planned initial public offering (IPO). Sources cited by Reuters confirm that Nasdaq will purchase $50 million in Gemini shares through a private placement concurrent with the IPO, which aims to raise up to $317 million.
This investment forms part of a strategic partnership enabling Nasdaq to integrate Gemini’s custody and staking services. Concurrently, Gemini’s institutional clients will gain access to Nasdaq’s Calypso platform, enhancing their ability to manage and monitor trading collateral.
The partnership remains subject to market conditions and potential adjustments. This development follows Nasdaq’s recent announcement to expand its presence in tokenized securities, signaling the exchange’s broader commitment to blockchain-based financial products.
FinOracleAI — Market View
The current increase in bearish sentiment in crypto markets appears to be a short-term reaction, with key catalysts such as the upcoming Federal Reserve meeting likely to influence near-term direction. The introduction of a competing crypto legislative framework by Senate Democrats adds complexity to regulatory outlook, introducing uncertainty around the timing and content of potential US crypto regulations. Nasdaq’s strategic investment in Gemini signals growing institutional integration between traditional finance and crypto, potentially boosting investor confidence.
Impact: neutral
