Altcoins show early strength

The crypto market has had a turbulent month, but something new is brewing beneath the surface. While Bitcoin is struggling with major price barriers, some altcoins are showing surprising resilience. What does this mean for the weeks ahead? And why are big players suddenly so eager to look at Solana? You'll find out in this edition of Bitvavo Market News.

Market update

August was a turbulent month in the crypto market. In the first half, almost all prices rose sharply. Bitcoin gained nearly 10%, rising from €96,700 on Aug. 2 and 3 to €105,600 on Aug. 14. That was just short of its highest ever euro price. Only a brief peak of €106,000 on January 20 was higher.

After August 14, the market split in two halves. The price of Bitcoin fell, along with that of some altcoins. But several major altcoins remained remarkably strong, posting even higher prices than in the first half of August.

The attached chart shows ETH, SOL, and AAVE as examples of alts that displayed an upward trend throughout August, with higher highs and higher lows. The price of ETH rose 45% from Aug. 3 to €4,200, the highest level since the peak of the bull market in 2021.

Some indicators suggest that Bitcoin's weakness isn't over yet. On-chain data shows that existing investors are taking profits. Inflows to spot Bitcoin ETFs have been weak for several weeks. Will altcoins continue to hold strong while Bitcoin stabilizes? If so, that would be a favorable sign for altcoins in the period that follows.

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Solana in demand once more

Solana is back in the spotlight. Not because of a new technological breakthrough, but due to a notable uptick in speculation. This time it revolves around so-called Digital Asset Treasuries (DATs): companies that purchase large amounts of SOL and put them on their balance sheets. The strategy is highly reminiscent of the approach Michael Saylor used to put Bitcoin on the map with institutional investors.

There are also on-chain developments, such as the trading in Solana's own xStocks which recently hit a milestone of $500 million in volume over six weeks. Not a large amount compared to traditional markets, but within the niche of tokenized stocks it is a sign of genuine interest in this type of application.

But the fact that SOL's price performed remarkably well over the past month has nothing to do with xStocks or developments in the underlying network's transaction speed. More and more companies want to hold SOL as a reserve currency. Sharps Technology raised hundreds of millions for a Solana treasury, Pantera Capital is working on a billion-dollar fund, and Multicoin, Galaxy, and Jump Crypto are also setting up their own entities.

This potential inflow is fueling optimism and price growth. Still, not everyone is convinced. Critics warn that some DATs could be used as shortcuts for early investors to cash in on their "locked" SOL through share-based structures. There is no hard evidence, but the suspicion raises questions about the transparency and integrity of these companies.

For now, investors mainly see legitimate treasury strategies, viewing SOL as a productive asset that can yield returns through staking and DeFi. If no unwelcome surprises arise, the current focus could develop into a structural driver of the network's growth.

In other news

• Increased search volume confirms growing interest in Ether (ETH). 
  The number of searches for the second-largest cryptocurrency has climbed back to 2022 levels. ETH's price performance, which has been significantly better than BTC over the past 30 days, is cited as the primary reason. Behind this is, among other things, the increase in companies buying Ether to bolster their treasuries.

• Aave launches Horizon, a new market for real-world assets. Institutional investors can borrow stablecoins against tokenized government bonds and money market fund shares as collateral. Partners like Circle and VanEck are expected to give the new financial network a strong start with liquidity and legitimacy. Aave believes it could bring as much as $25 billion worth of traditional assets into the DeFi space.

• U.S. government records GDP data on-chain. The Department of Commerce published a hash of the latest quarterly figures on nine public blockchains, from Bitcoin to Avalanche. Key data was also distributed through Chainlink and Pyth oracles. The Department of Commerce was also assisted by US-based exchanges. The agency aims to make data about the U.S. economy both "immutable" and globally accessible.

• Stablecoin market breaks through $280 billion mark. In just the last week alone nearly $3 billion was added. Ethena's USDe has doubled in size since August last year. Only USDC and USDT are larger. This shows that DeFi-stablecoins, often offering attractive yields, can grow rapidly - even in a market dominated by two giants.

Satoshi Radio: The US President added a new crypto company to his business portfolio. The latest episode of Satoshi Radio discusses this in detail. Not because this news in itself is groundbreaking, but because it was preceded by painful events. After reviewing the news, the viewers are treated to a comprehensive market update. Key question: is the market cycle top behind us?

This article is for informational purposes only and does not constitute a marketing communication or recommendation. None of the content herein should be considered as investment advice or a substitute for it. Bitvavo makes no guarantees regarding the accuracy or completeness of the provided information. Investments involve risks. There is a possibility of losing your entire invested capital.