CoinDesk 20 Index: 1,875 −2.0%
Bitcoin (BTC): $58,088 −2.9%
Ether (ETH): $2,576 −2.6%
S&P 500: 5,554.25 +0.2%
Gold: $2,526 +1.1%
Nikkei 225: 37,388.62 −1.77%

A message from iShares

Crypto majors started the week in the red, with bitcoin dropping around 3% in 24 hours to $58,000 and change. The broader digital asset market, as measured by the CoinDesk 20 Index (CD20), fell 2.2%. ETH and SOL were around 2.5% and 2% lower respectively. One asset bucking the trend is XRP, which rallied 3% to just under $0.59 following the apparent conclusion of the nearly-four-year-old case between Ripple and the SEC. Ripple was ordered to pay $125 million for violating federal securities laws over the sale of XRP to institutional clients. That was a fraction of the $2 billion the SEC sought.

TON, the digital asset associated with Telegram, outperformed the broader market, rising nearly 3% to $6.75. The gain followed HashKey announcing a partnership with TON, in which it will offer regulatory guidance and collaborate on initiatives such as popular GameFi project Catizen, a Telegram-based gaming platform with multiple cat-themed mini games. "[We'll] focus on the TON ecosystem to offer unique Web3 gaming experiences, fostering the prosperity and development of the TON ecosystem," Ben El-Baz, managing director of HashKey Global, said in an e-mail. "Leveraging Telegram’s advantage to attract more developers represents a significant opportunity for TON."

Donald Trump's election chances are not the dominant driver of bitcoin's price, contrary to the popular narrative, data show. Prime broker FalconX's analysis of the three-day change in BTC's price and the three-day change in Polymarket odds of Trump winning the presidential election between June 1 and Aug. 15 shows a lack of definitive trend or clear correlation between the two variables. “One reason for these weaker-than-expected relationships could be the many crosscurrents influencing prices, such as the path of monetary policy in the U.S., concerns around upcoming supply overhangs, and others, as we highlighted before," David Lawant, head of research at FalconX, said in an email to CoinDesk.

The Japanese yen is rallying against the U.S. dollar in a redux of early August market action that was characterized by sharp losses in global stock markets and bitcoin. Since late Thursday, the yen has strengthened 2.4% to 145 per dollar.

The activity is reminiscent of the yen's outperformance at the end of July and early this month that catalyzed the unwinding of carry trades, financed by relatively cheap yen-denominated loans as it became more expensive to borrow the Japanese currency.

The resulting lowering of risk exposure in traditional markets also weighed on bitcoin and the wider crypto market. BTC fell from roughly $70,000 to $50,000 in the eight days to Aug. 5.

In his latest commentary, Goldman Sachs' Andrei Kazantsev explained how bitcoin and ether were caught in the yen carry trade unwind and the global VAR shock of Aug. 5. VAR, or value at risk, is the maximum amount of loss a market can sustain over a period of time. A sudden jump forces traders to scale back exposure to relatively risky assets. Thus, the renewed yen strength warrants attention from crypto traders.

- Omkar Godbole