Bitcoin's Price Struggles Amid Global Volatility
Bitcoin, the pioneering digital asset, is currently experiencing a period of stagnation. According to Copper Research's latest "Opening Bell" report, global events have put a damper on Bitcoin's price movements. Recently, the German government's decision to sell 40,000 coins did not rattle Bitcoin's core strength, yet the overall market conditions have been less than favorable.
The heightened market volatility originates from several international occurrences, such as the U.S. election, UK riots, escalating tensions in the Middle East, and changes in the Japanese central bank's policies. The report notes that initially, investors took advantage of the dip caused by the German sell-off, but continuing volatility has led to reduced interest in risk assets like Bitcoin.
With Bitcoin's price remaining in the range observed since the German sell-off, the report highlights that minimal buying activity has continued. Despite Bitcoin ETFs (Exchange Traded Funds) adding 40,000 coins since March, no significant upward momentum has been noticed.
Ethereum's Supply Dynamics and Potential Surge
In contrast, Ethereum (ETH) is drawing attention due to its supply dynamics. The report points out that since mid-April, Ethereum has returned to an inflationary state due to Layer-2 solutions. However, the interesting aspect is that a considerable amount of ETH is being locked in smart contracts.
This locking of Ethereum has reduced its circulating supply, potentially creating an opportunity for a price surge towards the end of the year. As of August 12, Ethereum was trading just above $2,600, with 66% of addresses in profit, marking an increase from the previous week.
For Ethereum investors, this could mean that the limited supply could play a pivotal role in boosting prices, particularly if the trend of utilizing smart contracts continues.
Growth in Tokenized Assets
The report also sheds light on the impressive growth of tokenized assets. This year alone, over $1 billion in tokenized government products have been added to blockchains. According to a McKinsey projection, the market value of tokenized real-world assets could reach up to $4 trillion by 2030. This growth is mainly driven by interest in products like mutual funds and bonds.
A notable contributor to this surge is BlackRock's BUIDL product, which constitutes more than half of the increase. Other emerging products gaining traction include Franklin Templeton's BENJI 0.6 and Ondo Finance's USDY and USDG, highlighting strong market momentum in the tokenized asset space.
