Cryptocurrency Market Update
After experiencing a downturn over the weekend, the cryptocurrency market has returned to a market capitalization of $4.01 trillion, with the Fear and Greed Index falling back to a neutral range of 57. ETH has yet to reach a historical high, but there are currently as many as 890,000 ETH (approximately $4 billion) waiting to be unstaked, which analysts warn could affect ETH’s retracement. This week, the market will focus on the global central bank annual meeting in Jackson Hole, particularly on Powell’s speech on Friday.
Jackson Hole Approaches, Market Focuses on Powell’s Speech
The global central bank annual meeting will be held from August 21 to August 23 in Jackson Hole, with Federal Reserve Chair Jerome Powell scheduled to deliver a speech at 10 AM Eastern Time on Friday (10 PM Taiwan Time), which could be one of the most significant speeches of his career.
Market expectations indicate that a 25 basis point rate cut next month is almost a certainty, with at least one more cut anticipated before the end of the year. In recent years, Powell has often used this opportunity to make impactful policy statements, and this occasion may hold significant implications.
Prior to that, the minutes from the Federal Reserve’s meeting will be released on Wednesday, along with remarks from several Federal Reserve officials, including Michelle Bowman, Christopher Waller, and Raphael Bostic.
ETH Fails to Reach ATH, Unstaking Queue Hits New High
After experiencing a downturn over the weekend, the cryptocurrency market has returned to a market capitalization of $4.01 trillion, with the Fear and Greed Index falling back to a neutral range of 57. As BTC’s dominance dropped to 58.55%, the altcoin season index rose to 47, with ETH, BNB, and SOL all recording weekly gains of over 5%, while ADA and LINK saw increases of around 20%.
ETH has not yet challenged its historical high, and according to data from validatorqueue.com, there are currently as many as 890,000 ETH (approximately $4 billion) queued for unstaking, setting a new record in network history, with waiting times extending to as long as 15 days.
Juan Leon, a senior investment strategist at Bitwise, believes that this increasing number may drive ETH’s retracement, particularly if the trading price of staked ETH falls below ETH. “Tokens like stETH can trade at a discount. This discount reduces their value as collateral, triggering risk reductions, hedging, or even liquidations, leading to spot ETH sales. If the cost of borrowing ETH skyrockets, leveraged stETH circular trading through liquidity pools on DeFi protocols will no longer be profitable, causing traders to close positions and sell ETH to repay loans, thereby creating synchronized selling pressure.”
Negative Financial Reporting from Staked ETH, SharpLink Faces Challenges
SharpLink, a U.S. Ethereum reserve company, announced last Friday that it incurred a non-cash impairment loss of $87.8 million due to accounting recognition of its liquidity-staked ETH (LsETH). Such low-price recognition for staked ETH accounting will also pose adverse financial reporting implications for reserve companies like Ethereum and SOL, which claim to earn additional income through staking. Following the drop in cryptocurrency prices on Friday, shares of various digital asset companies (DAT) fell sharply.
(Staking ETH Adversely Affects Financial Reports? SharpLink Reports Significant Losses in Q2, SBET Shares Drop Over 15%)
Risk Warning
Investing in cryptocurrencies carries a high level of risk, and their prices can be highly volatile; you may lose all your principal. Please assess the risks carefully.