Bitcoin Dominance Falls as Altcoins Post Bumper Week

The first week of September marked the seventh consecutive bullish week for total crypto market capitalization. It is one of the longest consistent bullish runs on record and places the market cap within close reach of previous all-time highs. Although bitcoin climbed higher, it was altcoins that dominated. While markets progressed, Twitter and Square Inc announced further plans to integrate with bitcoin, and four nations began testing cross-border payments using Central Bank Digital Currencies.

• Crypto economy increases 100% since July
• Underlying code suggests Twitter users will be able to tip in bitcoin
• Jack Dorsey announces bitcoin-focused decentralized exchange
• CBDCs tested by Australia, Singapore, Malaysia, and the Republic of South Africa
• Nonfarm payroll figures tied to a spike in bitcoin prices
• Big-ticket reports to watch out for this week

Crypto economy sees 100% climb since July

The total market capitalization of all cryptocurrencies is now just shy of its all-time high value of $2.5 trillion. Progress was aided by one of the most bullish weeks that the crypto markets have ever experienced. At the time of writing, the market cap is approximately $2.3 trillion. 

The climb back up to all-time highs marks a 100% increase in total value compared with the lows of July. At the time, the market cap sat at $1.15 trillion. Although the largest cryptocurrency, bitcoin, accounted for some of the gains (crossing again above the psychological $50,000 level), it was the altcoin sector that truly propelled the total market cap higher.

On Friday 3rd September, Ethereum peaked above $4,000, a figure which has not been seen since May this year. After topping out at $4,300 in May, Ethereum spent the following three months spiraling back down towards $1800. Some analysts believed that Ethereum, and the altcoin market in general, had exhausted its bullish momentum. The bull run was over, they said. However, with potential deflationary elements brought to the mainnet through EIP 1559, Ethereum has advanced once again. 

Over $500 million worth of ETH coins has now been burnt on the network. As a result, Ethereum has continued to take market share away from Bitcoin. Bitcoin has now decreased to a 42% market share, while Ethereum has increased to 20%.

However, Ethereum cannot take all of the credit for the latest crypto-economy boom. It is not the only altcoin to experience a triple-digit resurgence in recent weeks. According to data recorded by TradingView, the dominance of Cardano (ADA) has increased to 4.22%, Binance Coin is now 3.63%, Tether is now 2.88% and XRP is now 2.66%. 

Could we see a $3 trillion total market cap before the end of 2021? 

Twitter to offer the ability to tip with Bitcoin

The social media giant, Twitter, was under the microscope last week as reports claimed the platform was testing the option of tipping with bitcoin. This would be added to its newest feature called ‘Tip Jar’. 

Tip Jar was added to the application in May 2021, but only for beta users. The feature interacts with Cash App, Bandcamp, Patreon, and PayPal to store collected funds. A link to a third-party app can be posted to either a profile or tweet so that other users can then ‘tip’ for work or insight provided.

Although bitcoin is not currently available as a payment option within Tip Jar, some users have spotted code in the beta version that suggests it is in the pipeline. The news was first leaked by Twitter user Alessandro Paluzzi and subsequently confirmed by Twitter’s Product Leader Kayvon Beykpour on Tuesday. Beykpour indicated that users will be directed through a Bitcoin tutorial that includes details on the Bitcoin Lightning Network and custodial and non-custodial bitcoin wallets.

The news is in line with the CEO of Twitter, Jack Dorsey’s future plans that were voiced earlier in the year. The entrepreneur stated in July that Bitcoin would form a large part of Twitter’s future. Speaking in July, Dorsey claimed that Bitcoin was the best candidate for a native cryptocurrency of the internet.

Dorsey confirms bitcoin-focused decentralized exchange

During the same week, it was confirmed that Jack Dorsey’s new venture, TBD, which is a division of his payments firm Square Inc, will be taking a bitcoin-focused development route. The new division is set to become a decentralized cryptocurrency exchange (DEX) dedicated to tackling some of the biggest issues that plague the crypto space. 

Mike Brock, General Manager of TBD posted a tweet thread that outlined the company’s vision. “We believe bitcoin will be the native currency of the internet. While there are many projects to help make the internet more decentralized, our focus is solely on a sound global monetary system for all”. 

The team at TBD wants to create a non-custodial wallet that can be funded from anywhere in the world that can also offer on and off-ramps for bitcoin. Focused on being an open-source platform, the exchange should be accessible via any wallet and completely open to all members of the public.  

CBDCs tested by Australia, Singapore, Malaysia, and the Republic of South Africa

As a result of cryptocurrency expansion, governments globally are focused on how blockchain technology can improve the internal workings of financial systems. Central bank digital currencies (CBDCs) are one such solution. These coins are digital forms of existing fiat currencies. Unlike stablecoins, which are pegged to a fiat currency, CBDCs are regulated by the associated nation.

It was announced last week that the Reserve Bank of Australia, the Monetary Authority of Singapore, Bank Negara Malaysia, and South African Reserve Bank would be joining forces to test their respective nation’s CBDCs. The CBDCs will be used in a cross-border payment trial. The experiment will determine if cross-border payments can be completed quicker and more efficiently than traditional banking.

Assistant Governor Fraziali Ismail of the Bank Negara Malaysia commented to Reuters during the week. “The multi-CBDC shared platform… has the potential to leapfrog the legacy payment arrangements and serve as a foundation for a more efficient international settlement platform,”

A similar initiative is also underway between the banks of Hong Kong, China, UAE, and Thailand. 

Nonfarm payrolls linked to spike in bitcoin prices

The push to $50,000 experienced by bitcoin this week may have been aided by the release of weak economic news on Friday. Lackluster Nonfarm Payroll figures may have caused Bitcoin to spike above its most recent daily high of $50,500. Other cryptocurrencies may also have benefited from the news.

It was announced that 250,000 nonfarm jobs had been added during the month of August, which was severely under the expectations of 750,000. The increase of job numbers has been one of the main requirements for the Federal Reserve to begin tapering quantitative easing (QE). The tapering of QE is usually viewed negatively for riskier assets such as bitcoin. 

Currently, the Fed is purchasing $120 billion per month in an asset purchase program. This will be reduced once they feel the economy is back to reasonable levels, which includes an increase in employment. The reduction of cheap money flooding the market is expected to cause a reduction in exposure to cryptocurrency markets. 

Big-ticket reports to watch out for this week:

Tuesday – Reserve Bank of Australia Interest Rate Decision, China Unemployment Rate, European Employment Rate Change (QoQ & YoY)

Wednesday – Bank of Canada Interest Rate Decision

Thursday –  China Inflation Rate (YoY), US Initial Jobless Claims

Friday – UK Balance of Trade, UK Goods Trade Balance, Canada Unemployment Rate & Employment Change

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