Cryptocurrency Market Analysis [August 20]

Bitcoin has fallen significantly from last week's high of 124,000 dollars and is now at the 110,000 dollar level. This level is from early August.

Bitcoin’s fear index dropped to 56. It fell quite a bit for a while. Technically, I still think it remains in a high price range. Does this imply there is still room to grow?

Market capitalization also surpassed 4 trillion dollars last week, but due to this decline it has fallen below that level, though it is still at a high level.

Related news includes

The U.S. Producer Price Index (PPI) inflation for July rose to 3.3%, beating expectations of 2.5%. Also, the U.S. core PPI inflation rose to 3.7%, surpassing expectations of 2.9%.

This is temporarily accelerating the decline.

Additionally, during last week’s surge, U.S. Treasury Secretary Janet Yellen stated that the U.S. does not intend to make additional Bitcoin purchases. BTC, and she also said that Bitcoin’s strategic reserve would be increased only through confiscation by law enforcement agencies.

With news like this, the cryptocurrency market’s rise paused to some extent. Personally, it felt as if this statement was made deliberately to curb a price rise. Do you think the time for further growth has not yet come?

On the bright side, the Federal Reserve Board ended its supervisory program monitoring banks’ cryptocurrency activities. The “New Supervisory Activities Program” was announced in August 2023.

Thus, regulatory easing is proceeding.

Next is Ethereum. Last week, Ethereum hit new all-time highs (in Japanese yen) with continued upward momentum, briefly surpassing 700,000 yen.

Currently, due to a temporary correction, Ethereum has fallen more than Bitcoin, dropping from around 4,800 dollars to 4,200 dollars.

However, looking at the news, I still feel the trend is favorable for Ethereum.

Below are several Ethereum-related news items.

◯ Domestic plans to issue a stablecoin

JPYC, a Web3 startup based in Chiyoda, Tokyo, announced on August 18 that it obtained registration as a “money remittance business” under the Payment Services Act. With this registration, it will begin issuing a new stablecoin “JPYC.” It is the first such company in Japan to issue a stablecoin that is pegged 1-to-1 with the Japanese yen and used as an electronic payment method. — ITmedia

Japan is finally issuing a stablecoin, too.

It is expected to be mainly used for practical purposes such as payments and remittances, and may be somewhat limited as a cryptocurrency investment.

If JPYC trades on overseas exchanges and can be remitted to Japan as is, smooth transactions could be possible, but it is unlikely that liquidity for JPYC will originate from overseas trading currencies.

Otherwise, it could be used in DeFi for management, and perhaps earn favorable interest.

In any case, I plan to continue watching Japan’s regulatory environment for any changes.

By the way, the trading chains are Ethereum and Polygon, among others.

Below are words from representative Tamaki of the Democratic Party of Japan regarding JPYC

It was also on the front page of the Nikkei News this morning, that approval for issuing a yen-denominated stablecoin is expected.

Stablecoins, like other crypto assets, utilize blockchain technology and are pegged to fiat currencies (Japanese yen or US dollars) as underlying assets. They are tokens with reduced speculative characteristics and relatively stable prices.

In the United States, the Genius Act has been passed, strengthening the status of USDC (USD Coin) pegged to the dollar, and Circle, which issues USDC, has gone public on the NASDAQ.

By leveraging blockchain technology, transfers and settlements become cheaper and smarter.

This innovation is expected to impact not only finance but also trade, settlements, and everyday life such as travel abroad. Promoting global use of yen-denominated assets is expected to bolster confidence in the yen as well. Government bonds may also see increased demand.

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(This article has been distributed since 2016)