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The cryptocurrency markets are closely watching several key US macroeconomic events this month, which could significantly impact portfolios. Fed interest rates announcements in particular will be a key print in September.

Positive economic data often influences investor sentiment in the crypto space. As traditional markets strengthen, investors become more confident in the overall economy, and vice versa. This could influence risk appetite and, ultimately interest in alternative assets like cryptocurrencies

US Economic Events to Watch in September

Bitcoin (BTC) has slipped further from the $60,000 psychological level, continuing its sluggish performance despite positive catalysts. Factors like growing institutional adoption, a potentially more favorable regulatory environment, and expected Federal Reserve (Fed) rate cuts have done little to boost BTC’s price.

Currently, Bitcoin is over 20% below its recent all-time high of nearly $73,500, recorded more than five months ago. As the new month begins, crypto market participants are closely watching key events, particularly because historical data indicates that September has traditionally been Bitcoin’s worst-performing period.

Read more: How To Buy Bitcoin (BTC) and Everything You Need To Know

Bitcoin Monthly Returns. Source: CoinGlass

Non-Farm Payrolls, Unemployment Rates

Investors will keep a close eye on the upcoming US Non-Farm Payrolls (NFP) report, which includes key data on job creation and the unemployment rate. The July report showed weaker-than-expected job growth with 114,000 jobs added, leading to a median forecast of 162,000 for August.

If August’s NFP figures are strong and the unemployment rate declines, it could indicate a robust economy, which might positively influence investor sentiment toward cryptocurrencies. Employment-related reports like these can significantly affect market sentiment, risk appetite, and the overall economic outlook, indirectly impacting Bitcoin and the broader crypto market.

Before the NFP report, the Job Openings and Labor Turnover Survey (JOLTS) data, set to be released on Wednesday, will offer insights into the labor market’s health. A median forecast of 8.1 million job openings in July, slightly down from 8.18 million, could indicate a growing economy, increased consumer spending, and potential wage growth.

Additionally, the ADP National Employment Report, due on Thursday, will provide a snapshot of private sector employment. If July’s ADP report exceeds the previous 122,000 jobs added, it would signal strong job creation and economic growth

Donald Trump Debate Against Kamala Harris

On September 10, the Republican and Democrat presidential candidates for the upcoming November elections, Donald Trump and Kamala Harris, will participate in a debate. With cryptocurrencies and digital assets becoming key issues in the campaign, this event could trigger volatility in the Bitcoin and broader cryptocurrency markets.

Both parties have shown an interest in crypto, with Harris reportedly warming up to pro-crypto policies

“They’ve expressed that one of the things that they need are stable rules, rules of the road…focus on cutting needless bureaucracy and unnecessary regulatory red tape… innovative technologies while protecting consumers and creating a stable business environment with consistent and transparent rules of the road,” Bloomberg reported, citing Brian Nelson, a senior advisor on Vice President Harris’ campaign.

On the Republican side, Trump’s team is working to position the US as the world crypto capital. As both candidates seek to connect with the crypto community, the debate is expected to be intense, especially given Trump’s combative style and Harris’s background as a prosecutor. 

US CPI

The US Consumer Price Index (CPI) data for August, scheduled for release on September 11, will be one of the key economic indicators for the month. This data measures the rate of inflation by tracking price changes in consumer goods and services. In July, the CPI inflation rate came in at 2.9%, slightly lower than the 3% recorded in June, according to the US Bureau of Labor Statistics (BLS).

The August CPI data will be crucial for determining whether inflation is continuing to slow, as the Federal Reserve targets a 2% inflation rate. If the CPI falls below 2.9%, it would suggest that inflation is moving in the right direction, potentially reducing the pressure on the Fed to maintain high-interest rates.

Ahead of the CPI release, speeches by New York Fed President John C. Williams on September 6 and Fed Governor Christopher Waller will be closely watched. Both have previously indicated a possible shift towards looser monetary policy as inflation shows signs of easing and the labor market stabilizes. If their upcoming speeches express confidence that the disinflationary trend is holding steady, it could be bullish for the cryptocurrency market.

Currently, price pressures are easing across the economy, with declines in goods prices, slower increases in housing costs, and more moderate wage growth contributing to a broader reduction in inflation, especially in the services sector. This trend, if sustained, could positively influence investor sentiment, particularly in riskier assets like cryptocurrencies.

US PPI

The day after the CPI data is released, the US Bureau of Labor Statistics will publish the US Producer Price Index (PPI) inflation data. In July, the PPI showed more significant easing than expected, providing relief for both stocks and Bitcoin.

Specifically, the US PPI inflation rate decreased to 2.2% year-on-year (YoY) in July, below the expected 2.3% and down from the previous period’s revised 2.7%. Similarly, Core PPI inflation, which excludes food and energy prices, dropped to 2.4% YoY in July, also below the forecast of 2.7% and significantly lower than the previous 3.0%.

If the August PPI data, set to be released on September 12, shows continued declines in inflationary pressure, it could boost risk appetite among investors, favoring assets like Bitcoin and other cryptocurrencies. 

Fed Interest Rate

Another key event this month will be the Federal Reserve’s interest rate decision on September 18. In its previous meeting, the Federal Open Market Committee (FOMC) decided to keep interest rates unchanged, with policymakers unanimously voting to maintain the benchmark overnight borrowing rate between 5.25% and 5.50%.

However, during a recent meeting, Fed Chair Jerome Powell expressed increased confidence that inflation is on a sustainable path toward the Fed’s 2% target.

“The time has come for policy to adjust. The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks,” Powell stated.  

Read more: How to Protect Yourself From Inflation Using Cryptocurrency

Fed Target Rate Probabilities, Source: CME Fed Watchtool
Fed Target Rate Probabilities. Source: CME Fed Watchtool

This signals that the Fed may be nearing the end of its rate-hiking cycle, depending on the latest economic data. Markets participants will closely watch the upcoming decision, as it could widely impact financial markets, including cryptocurrencies.

Disclaimer

In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.



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Marathon Digital Raises $1B to Expand Bitcoin Holdings

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Marathon Digital Holdings, one of the largest Bitcoin miners, has completed a record $1 billion offering of 0% convertible senior notes due 2030. The net proceeds from the sale were approximately $980 million.

According to the firm’s statement, the net proceeds will be primarily used to buy Bitcoin

Marathon Digital Holds over $2.5 Billion Worth of Bitcoin

After its last purchase in September, Marathon Digital’s Bitcoin holdings stand at 25,945 BTC. This is currently worth approximately $2.52 billion, as Bitcoin reached an all-time high of $98,000 earlier today. 

However, the company’s decision to expand its holdings potentially points to a larger bullish cycle for the token in the long term. According to its press release, Marathon Digital plans to use $199 million of the net proceeds to repurchase existing convertible notes due 2026. 

The remainder will be used to acquire additional Bitcoin and for general corporate purposes. Marathon Digital is currently the second largest Bitcoin holder among publicly traded companies. 

marathon digital bitcoin holdings
Bitcoin Holdings by Public Companies. Source: CoinGecko

The notes offer flexibility, with options for conversion into cash, shares of Marathon’s common stock, or a combination of both. Redemption terms include the ability for the company to redeem the notes at full principal value plus accrued interest. 

“$1 Billion. 0% interest. MARA has completed the largest convertible notes offering ever amongst BTC miners. The mission, as always: Provide value. Acquire #bitcoin,” the company wrote on X (formerly Twitter). 

Increasing Bitcoin Acquisition Among Public Firms 

Marathon Digital is following an ongoing trend of public companies increasing their Bitcoin holdings in this bull market.  Earlier this week, MicroStrategy announced plans to issue $1.75 billion in convertible notes maturing in 2029. The proceeds will be used to fund additional Bitcoin purchases. 

On the same day, the company secured $4.6 billion worth of Bitcoin, building on a $2 billion acquisition from the prior week. 

Bitcoin’s all-time high and these aggressive purchases propelled MicroStrategy’s stock price by nearly 120% in a single month. The largest Bitcoin holder also entered the list of top 100 public companies in the US. 

Meanwhile, Marathon Digital has faced challenges despite its growing Bitcoin reserves. The company reported a $125 million net loss in Q3. This was driven by a $92 million year-over-year increase in operating costs. 

However, its operational capacity has strengthened. Earlier this month, its energized hash rate surged by 93%, signaling increased mining efficiency. Marathon Digital also signed an $80 million agreement with the Keynan government to expand its Bitcoin mining capabilities. 

Disclaimer

In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.



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cbBTC Surges Past $1 Billion as Coinbase Ends WBTC Support

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Coinbase, the largest US-based crypto exchange, has announced it will suspend trading for Wrapped Bitcoin (WBTC) on December 19, 2024, at approximately 12 p.m. ET.

The decision, revealed in a post on X (formerly Twitter), cites a routine review of its listed assets to ensure compliance with listing standards. 

Coinbase Sidesteps WBTC Amid cbBTC Boom

The suspension will apply to both Coinbase Exchange and Coinbase Prime. Although trading will cease, WBTC holders will retain full access to their funds and the ability to withdraw them at any time. In preparation for the transition, Coinbase has moved WBTC trading to a limit-only mode, where users can place and cancel limit orders while matches may still occur.

“Coinbase will suspend trading for WBTC (WBTC) on December 19, 2024, at or around 12 pm ET. Your WBTC funds will remain accessible to you, and you will continue to have the ability to withdraw your funds at any time. We have moved our WBTC order books to limit-only mode. Limit orders can be placed and canceled, and matches may occur,” Coinbase detailed.

Coinbase’s move to suspend WBTC comes amid the rapid success of its wrapped Bitcoin token, cbBTC. Recently, cbBTC surpassed a $1 billion market capitalization, reflecting growing adoption and trust within the crypto community. This milestone has further cemented cbBTC’s position as a strong competitor to WBTC in the decentralized finance (DeFi) space.

oinbase’s cbBTC Bitcoin Wrapper Supply and Market Cap Chart
Coinbase’s cbBTC Bitcoin Wrapper Supply and Market Cap Chart. Source: Dune

As of this writing, data on Dune shows that cbBTC market capitalization has increased to $1.44 billion. CBTC’s native availability on networks like Solana, Ethereum, and Base has significantly expanded its accessibility, with Arbitrum being the latest addition.

“cbBTC is live on Arbitrum. cbBTC is an ERC-20 token that is backed 1:1 by Bitcoin (BTC) held by Coinbase. It is natively available on Arbitrum and securely accessible to more users across the Ethereum ecosystem,” Coinbase shared on Tuesday.

Additionally, prominent DeFi protocol Aave is targeting cbBTC for its Version 3 (V3) platform, enhancing its utility within the ecosystem. This growing momentum may have played a key role in Coinbase’s decision to phase out WBTC trading.

WBTC Core Team Urge Coinbase to Reconsider

The team behind Wrapped Bitcoin expressed regret and surprise at Coinbase’s decision. In a statement on X, WBTC’s core team emphasized its commitment to compliance, transparency, and decentralization. 

“We regret and are surprised by Coinbase’s decision to delist WBTC…We urge Coinbase to reconsider this decision and continue supporting WBTC trading,” the team said.

The statement outlined WBTC’s longstanding reputation for novel mechanisms, regulatory compliance, and decentralized governance. Highlighting its seamless integration with DeFi protocols, WBTC described itself as an essential liquidity solution for Bitcoin users. Urging Coinbase to reconsider, WBTC reaffirmed its readiness to address any concerns or provide additional information to support its case.

Meanwhile, Coinbase’s announcement has sparked mixed reactions across the crypto community. Some users criticized the exchange, suggesting the decision reflects an inability to handle competition.

“Coinbase can’t handle fair competition?? WBTC superior to cbBTC” said Gally Sama in a post.

Nevertheless, others support the move, citing concerns over WBTC’s custody model, with one user referencing BitGo’s recent adoption of a multi-jurisdictional custody system.

“You put custody in the hands of a fraud. What did you think was gonna happen?” the user expressed.

This critique aligns with growing fears about Justin Sun’s involvement in WBTC’s custody processes, as BeInCrypto reported recently. Some users have acted preemptively to avoid potential risks, with one commenter sharing their reservations.  

“When Sun got on the multisig for WBTC, I sent all my WBTC on OP to Coinbase and exchanged for true BTC that I withdrew to my hardware wallet… You gave me confirmation just now that I made the right move,” they wrote.

The decision to suspend WBTC trading could mark a pivotal moment in the competition between wrapped Bitcoin solutions. While cbBTC’s integration across multiple blockchain networks has gained momentum, skepticism surrounding WBTC’s custody model and leadership has intensified.

Justin Sun has voiced criticism of Coinbase’s cbBTC strategy, labeling it a setback for Bitcoin’s broader adoption. As the debate continues, the industry watches closely to see whether Coinbase’s cbBTC will solidify its dominance or if WBTC can regain its position as a leading wrapped Bitcoin solution. Regardless, the shifting dynamics reflect the importance of transparency, governance, and community trust in shaping the future of DeFi.

Disclaimer

In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.



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Bitcoin Faces ‘Bank Run’ Risk, Cyber Capital’s Bons Warns

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Bitcoin (BTC) may be at risk of a catastrophic “bank run,” according to Justin Bons, founder and CIO of Cyber Capital.  

A bank run is when customers withdraw their deposits from a financial institution over fears of insolvency. 

Bitcoin Cannot Handle Mass Exits, Bons Says

In a detailed social media thread, Bons highlighted critical flaws in Bitcoin’s transaction capacity, self-custody model, and network security. In his opinion, these could lead to a crisis that would destabilize the network and devastate investors. 

Bons’ analysis centers on Bitcoin’s limited transaction processing capability, which he calculated at approximately seven transactions per second (TPS). Using data from Glassnode and Bitcoin’s code, he argued that Bitcoin’s 33 million on-chain users would face a bottleneck if a mass panic triggered simultaneous exits. 

“At this rate, the queue would be 1.82 months long under optimal conditions. However, in reality, transactions would get stuck and eventually be dropped, making it impossible for smaller parties to exit unless they pay exorbitant fees,” Bons explained.

Bons warned that this limitation could lead to a “death spiral,” where a price crash forces miners to shut down, slowing the network further. The resulting delays could deepen the panic, creating a vicious cycle of declining hash rates, prolonged block times, and falling prices. 

Further in his critique of BTC, Bons claimed Bitcoin’s transaction capacity is insufficient for real-world use. He compared Bitcoin’s 7 TPS to other systems, such as Visa’s 5,000 TPS, or even competitors in the crypto space that exceed 10,000 TPS without sacrificing decentralization. 

“There are literally ZERO use cases that can be supported by 7 TPS. Mass self-custody over BTC is a dangerous narrative. The only scalable path forward for BTC adoption is through centralized custodians and banks, contradicting its ethos as ‘freedom money’,” he stated.  

Bons also questioned Bitcoin’s long-term sustainability, citing its shrinking security budget. This, in his opinion, is a critical issue that could exacerbate the risks he outlined. The thread also touches on Bitcoin’s deviation from its original vision as “peer-to-peer (P2P) electronic cash.” He lamented that the network’s constraints and governance have turned it into a speculative asset rather than a practical medium of exchange. 

Bons’ remarks ignited a heated debate on X (formerly Twitter). Patrick Flanagan, a self-described tech expert, dismissed the claims.

“This is pure fantasy. If this was going to occur, it would have occurred years ago,” Flanagan argued.

Bons rebutted, asserting that the risk increases as the number of users grows. He noted that even a fraction of users leaving could trigger a run and added that the larger the network gets, the more severe the problem becomes.

Other users highlighted potential alternatives, such as trading wrapped Bitcoin (WBTC) on Ethereum, which bypasses Bitcoin’s base layer limitations. Bons acknowledged this but noted that wrapped BTC users could exit quickly while on-chain users would be trapped, exacerbating the sell-off.  The discussion also extended to Bitcoin’s self-custody model.

“This is something that self-custody advocates should pay attention to. One tiny bit of FUD and everyone gets their money stuck,” DashPay’s Joel Venezuela remarked.

Bons responded, acknowledging the difficult position he finds himself in as a cypherpunk and self-custody advocate. Another user raised a comparison to gold, questioning how long it would take to liquidate global gold holdings. Bons countered that while gold also has practical limits, its theoretical transaction capacity far exceeds Bitcoin’s, making it less susceptible to such bottlenecks. 

Critics of Bons’ analysis argue that Bitcoin has weathered similar concerns in the past without collapsing. However, his warning adds to a growing chorus of voices calling for a reevaluation of Bitcoin’s scalability and usability. 

Despite his grim outlook for Bitcoin, Bons remains optimistic about the broader cryptocurrency space. “There is much hope left for cryptocurrency as a whole,” he concluded, suggesting that Bitcoin’s original ethos now thrives in other blockchain projects. 

Meanwhile, while Bitcoin remains the dominant cryptocurrency, debates over its scalability and resilience continue. Bons’ warning serves as a stark reminder of the challenges Bitcoin faces as it seeks broader adoption in a changing financial space. Elsewhere, Galaxy CEO Mike Novogratz has almost similar reservations about a Bitcoin reserve in the US.

“I think that it would be very smart for the United States to take the Bitcoin they have and maybe add some to it… I don’t necessarily think that the dollar needs anything to back it up,” Novogratz claimed.

Disclaimer

In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.



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