Bitcoin (BTC) has
experienced a significant decline of 8.2% this week, dropping to $59,000, with
a low of $57,946—the lowest price since August 20. This
drop is surprising given that the initial announcement of the Federal Reserve's
(Fed) interest rate cut cycle had pushed crypto prices upward. Large investors
took advantage of the situation, pouring money into the crypto market. Last
week, Bitcoin ETFs from BlackRock (IBIT), Fidelity (FBTC), and Grayscale (GBTC)
reported net inflows of $204.3 million, breaking a three-week negative trend
and pushing BTC prices up by 6.5% to $64,697 last Friday, the highest since
August 1.
However, the weekend saw a sharp decline in
BTC prices without any apparent reason. Some speculate this could be due to
profit-taking, while others link the drop to the arrest of Telegram messenger
founder Pavel Durov in Paris. Durov, a prominent supporter of cryptocurrencies
and a libertarian advocating for freedom of speech, was detained on August 24
after landing on a private jet at Le Bourget. He is facing serious allegations,
including the use of his platform for selling child sexual abuse material, drug
trafficking, fraud, abetting organized crime transactions, and refusing to
cooperate with investigators.
French President Emmanuel Macron denied any
political motives behind Durov’s detention, but many believe this incident has
contributed to the recent crypto market correction. Despite this, large
investors remain bullish, investing another $121.0 million in spot Bitcoin ETFs
this week, possibly betting on Durov's release or a lack of charges against
him.
The news of Durov’s arrest had an immediate
impact on Telegram-linked crypto token Toncoin (TON), which lost more than 21%.
However, the token has started to recover despite some technical issues in the
TON blockchain, which the project team attributed to an anomaly workload. Some
validators failed to clear the database from old transactions, leading to a
consensus failure, but the team has assured that no assets will be lost and
that the network will recover.
Meanwhile, Elon Musk’s promotion of Dogecoin
through his "Willing to Serve" tweet has possibly contributed to the
revival of the NFT market. The Bored Ape Yacht Club (BAYC) collectibles have
seen a 50% increase in value over the last two months, with daily sales
exceeding $1.6 million—an impressive feat in the NFT sector.
The overall crypto market appears to be
heating up, with rising activity and potentially positive months ahead. If no
significant external shocks occur, September and October could be very
favorable for the crypto market.