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Volatility hits cryptocurrency markets after US jobs report

The cryptocurrency market experienced a brief recovery after the US jobs report, with bitcoin (COIN:BTCUSD) reaching a peak of $56,995 before falling below $54,000. At the time of writing, bitcoin was trading at $53,973.37.

The nearly 4% drop in BTC impacted other cryptocurrencies as well. Dogecoin (COIN:DOGEUSD) dropped over 7%, Ethereum (COIN:ETHUSD) by more than 5%, Ripple (COIN:XRPUSD) and Chainlink (COIN:LINKUSD) fell by over 4%. Cardano (COIN:ADAUSD) dropped more than 3%. Binance Coin (COIN:BNBUSD), Solana (COIN:SOLUSD), TON (COIN:TONCOINUSD), and Bitcoin Cash (COIN:BCHUSD) fell up to 3%. Polkadot (COIN:DOTUSD) and Avalanche (COIN:AVAXUSD) dropped over 1%.

The volatility triggered $50 million in liquidations, primarily affecting leveraged traders. Major US indices also fell, with the Nasdaq down 2.53% and the S&P 500 losing 1.74%.

The crypto fear & greed index fell to 22, signaling “extreme fear,” while analysts warned of a bitcoin correction below $50,000, though BTC still had support at $55,000 and $52,000.

Bitcoin, down over 12% since August and 24% since its March peak, struggled to gain momentum. September’s history of negative volatility heightened traders’ concerns. Although the decline aligns with previous cycles, there’s long-term recovery potential with bullish patterns emerging. In the short term, analysts like Arthur Hayes predict more downward pressure.

JPMorgan (NYSE:JPM) highlights the lack of major catalysts, making prices more sensitive to macroeconomic factors. Despite this, trading volumes increased in August, with stablecoins showing growth. Bitcoin and ether ETFs, however, disappointed.

Record bitcoin ETF outflows total $211 million in a day

On September 5, bitcoin ETFs faced significant outflows, totaling $211.1 million. This marks the seventh consecutive day of outflows, with no inflows recorded. Fidelity (AMEX:FBTC) was the hardest hit, losing $149.5 million, followed by Bitwise (AMEX:BITB) with $30 million, Grayscale (AMEX:GBTC) with $23.2 million, and the Grayscale mini trust (AMEX:BTC) with $8.4 million. Since August 27, over $1 billion has exited as bitcoin’s price dropped from $62,000 to $55,500.

Ethereum ETFs faced smaller outflows, totaling $0.2 million, with the Grayscale ETF (AMEX:ETHE) seeing $7.4 million in outflows. However, there was a $7.2 million inflow into other ETH ETFs. Total outflows for ethereum ETFs reached $562.5 million, as ETH prices declined by 36.44% over the past 6 months.

Ethereum Foundation promises financial report after controversy

The Ethereum Foundation (COIN:ETHUSD) is set to release a new financial report in response to criticism over its spending. Justin Drake revealed on the subreddit r/ethereum that the foundation spends around $100 million per year and holds $650 million in assets, with a gradually decreasing budget. Recently, the foundation transferred 35,000 ETH ($94 million) to Kraken, sparking discontent in the community. Aya Miyaguchi explained that the funds are used for grants and salaries and promised that future transfers would be gradual and planned.

VC funding for crypto sees resurgence in August

In August, venture capital funding for crypto projects grew to $633 million, a 15% increase from July. Most investments were directed toward blockchain infrastructure development. Luca Prosperi of M^0 Labs believes that interest in blockchain will continue, especially after the peak in AI investments. The return of VC interest in the crypto sector suggests a potential future recovery and a clear shift in investment priorities.

Cryptocurrency could meet AI economy’s needs

Analysts at Bernstein suggest that cryptocurrency could solve micropayment challenges in the AI economy. The current financial system is not efficient for the very small transactions needed by AI agents, such as data streaming. Cryptocurrency offers a solution with global digital payments, fast settlement, and low costs, ideal for machine-to-machine transactions. This would enable AI agents to have financial autonomy, overcoming the limitations of traditional payment methods.

Chris Larsen, co-founder of Ripple, backs Kamala Harris for president

Chris Larsen, co-founder of Ripple (COIN:XRPUSD), has joined a group of business leaders endorsing Vice President Kamala Harris in the presidential race. Larsen, known for his support of responsible blockchain regulation, emphasized trust in Harris’s leadership in technology and finance. This endorsement reflects a broader movement of corporate figures who value policies that promote innovation and fair regulation, especially in contrast to Donald Trump’s more deregulation-focused agenda.

Telegram updates FAQ after CEO’s arrest

Following the arrest of Pavel Durov by French authorities, Telegram updated its FAQ on moderation. On September 6, the platform removed a section stating it would not process requests related to private chats, now emphasizing the “report” button for users to flag illegal content. Durov, arrested on August 24, pledged to improve moderation, citing the app’s rapid growth and ease of misuse by criminals. Ton’s price (COIN:TONCOINUSD) reached $4.89 following Durov’s statement before dropping 1.6% to $4.74 at the time of writing.

Celebrity endorsements in crypto aren’t guarantees of legitimacy

Celebrity endorsements in cryptocurrency projects can generate significant visibility but do not guarantee their reliability. SEC researchers, like Joshua White and Sean Wilkoff, observed that many of these projects, especially ICOs, are fraudulent, with the number of scams rising from 26% in 2019 to nearly 40% in 2023. Celebrities like Shaquille O’Neal and Tom Brady supported projects that failed. Experts warn that transparency, a strong team, and a clear roadmap are crucial to assessing legitimacy.

Changpeng Zhao permanently banned from managing Binance

Binance confirmed that Changpeng Zhao (CZ) is permanently banned from managing the exchange, according to an agreement released on September 6. Despite CZ holding 90% of the company’s shares and being able to influence major decisions, he cannot assume executive positions at Binance. Zhao, who recently launched Giggle Academy and is investing in blockchain, AI, and biotechnology, has no plans to take on new executive roles. Binance Kazakhstan also obtained full AFSA licensing to operate as a regulated trading platform.

Riot Platforms increases bitcoin reserves, faces production drop

Riot Platforms (NASDAQ:RIOT) now holds over 10,000 bitcoins, a 37% increase from last year. However, bitcoin production dropped 13% in August to 322 BTC, and the company sold no bitcoin during the month. Challenges like high energy costs and halving rewards are putting pressure on the company. Riot is working to optimize costs and expand operations, including new facilities in Kentucky.

Bitcoin mining in Russia boosts revenue and attracts investors

Sergey Bezdelov, director of the Russian Industrial Mining Association, revealed that the country mined 54,000 BTC in 2023, generating over $556 million in taxes. The legalization of mining, approved by the Duma, is expected to attract investors and increase tax revenue. Russia is expanding its crypto operations, especially after economic sanctions. Analysts at Chainalysis warn that exchanges like Garantex and Exved could be used to bypass international sanctions, moving billions in transactions.

Sonic SVM to sell validator nodes to scale Solana blockchain

The Sonic SVM project, which aims to scale the Solana blockchain for high-performance gaming, plans to sell up to $12.8 million in validator nodes on HyperGrid, its decentralized framework. The sale will take place on September 16, offering 50,000 “Hyperfuse nodes” across 20 price levels. Proceeds will fund project development. Node buyers will earn token rewards and contribute to network security.

CryptoPunk sale highlights NFT value decline

CryptoPunk #6915, a rare ape-themed NFT, sold for about $1.48 million (620 ether) on September 5. Despite the significant price, it represents a 78% drop from offers of up to $6 million in March 2024. The sale sparked debate in the crypto community about potential market manipulation and the overall decline in NFT values, with monthly digital collectible sales down 76% since the 2024 peak.

Magic Eden launches US-exclusive domain amid criticism

Magic Eden announced a new domain exclusively for US users, offering similar services to its current .io domain but with additional features. The change has drawn criticism from cryptocurrency users, who fear that certain features, like airdrops, may be excluded for US residents. The platform may be responding to growing US regulatory pressure, similar to OpenSea’s Wells notice. Despite innovation efforts, the community is calling for transparency regarding the motivations behind the service segregation. The Magic Eden Foundation also launched the ME token for expansion and DApp integration.