Crypto market forecast: 5th August

It was a bullish start to August for many crypto assets. Market benchmark Bitcoin jumped ~17% in the last week and is now trading at over ~USD 11,000. A number of large-cap altcoins including Tezos (XTZ), Monero (XMR) and Chainlink (LINK) also enjoyed strong double-digit gains across the last 7 days. The number 2 and 3 crypto assets on Brave New Coin’s market cap table, Ethereum, and XRP, rose ~6% and ~1% respectively. The overall crypto market cap rose 11% last week with the Bitcoin dominance metric increasing to a two-year high of ~66.5%.

The first week of August saw crypto’s sometimes contentious relationship with financial regulators back on display. On July 29th, CNBC reported that Facebook had warned investors in its latest quarterly report that the Libra’s release date may have to be pushed back or even canceled. While Facebook told investors that it still plans to launch the currency in 2020, pushback from a host of international and US lawmakers appears to have forced the Libra team to reassess their release strategy. Facebook’s pain was Bitcoin’s gain, with BTC again rising on the back of negative Libra news.

Bitcoin also received a boost in positive sentiment following the United States Committee on Banking, Housing and Urban Affairs crypto hearing on July 30th. Senator Michael Crapo said he hoped the United States can maintain a position as leader of the growing cryptocurrency sector. Other discussions around the subject suggested there was a need for the US to keep pace with geopolitical rivals China in terms of blockchain development and innovation.

Jack Dorsey’s Square project provided the Bitcoin markets with a bullish flag and a sign that mainstream adoption is growing. Square announced on Thursday that it generated $125 million in Bitcoin (BTC) revenue in the second quarter of 2019 through its mobile payments service, the Cash App. The Cash App remains the number 1 finance app on the Apple App store and has over 220,000 ratings.

The Cash App does not charge users any transaction fees for Bitcoin trading, making the service appealing for first-time buyers. However, a user is not guaranteed the best possible exchange rate for a BTC purchase or sale. The Cash App effectively exchanges BTC at slightly above market rates, and users are happy to pay this premium for the seamless, convenient experience. The Cash App has been one of the most successful components of the Square product suite. During the investor call on Thursday, Dorsey declared, “We love you, Bitcoin. And we saw 3.5 million customers use Cash Card in June, typically using it to purchase multiple times per week.”

This week in crypto events

5th August- Coinbase Pro launches Tezos(XTZ)

The native token of proof-of-stake platform blockchain, Tezos, was one of the crypto week’s strongest performers rising ~42%. A Coinbase listing is often considered a bull flag for a digital asset, because of the platform’s position as the space’s leading infrastructure solutions provider. While the listing appears to have been the main driver of buying momentum, news that Ethereum developer tool builder, Truffle, was also exploring options for Tezos, HyperLedger Fabric and R3 Corda solutions was another positive fundamental sign.

6th August- Litecoin(LTC) Halving

Litecoin, the 5th largest digital asset on Brave New Coin’s Market Cap table will implement a block reward halving this Tuesday. This will constrict the supply of the token and theoretically create positive price pressure because of excess demand. Of the 84 million LTC that can ever exist, ~75% have already been mined. Inflation per year currently stands at ~9% and is set to decrease to ~4% after the next block reward halving. Year-to-date the price of LTC has risen ~209%, with the halving event helping to fuel positive macro sentiment.

It was a strong green trading week for several of the large cap digital assets, dominated by Bitcoin’s double-digit gains. Just outside of the top 10, Chainlink (LINK) continues to create buying pressure through partnership announcements. It rose ~13% on the back of newly announced deals with Oracle and Zilliqa.

Bitcoin enjoyed a strong week with macro prospects for the market-leading digital store-of-value looking strong in the near term. With many central banks including the Fed, People’s Bank of China(PBOC) and the European Central Bank(ECB) now implementing dovish monetary policy, Bitcoin is receiving renewed interest as a SOV detached from political risks and central banker’s discretion.