Monthly Review of August 2024

This monthly review examines the most important cryptocurrency news from August. The most significant cryptocurrency news in August was related to companies increasing their Bitcoin holdings, institutional activity related to Bitcoin, Sony's plans to release an Ethereum layer 2 scaling solution, and positive developments regarding Aave.

              
August in the Cryptocurrency Market
August was generally a negative time for cryptocurrency price movements. However, among the cryptocurrencies offered by Northcrypto, Aave was one of the best-performing cryptocurrencies of the month, with its price rising by approximately 17%. The prices of Bitcoin and Litecoin fell by about 10% in August, while the price of Chainlink dropped by about 15%. The prices of Polygon, Dogecoin, and ApeCoin decreased by around 17–20%. In turn, the prices of Ethereum and Solana fell by just under 25%.
Companies Continue to Increase Their Bitcoin Holdings
August saw several announcements of bitcoin purchases by companies. The US company Marathon Digital Holdings (Marathon), one of the world's largest Bitcoin miners, announced in early August that it had increased its bitcoin holdings by 4,144 bitcoins, spending approximately €225 million on these purchases. The funds for buying the bitcoins were raised through convertible senior notes, which saw higher-than-expected demand. With the latest purchase, Marathon's bitcoin holdings grew to over 25,000 bitcoins, valued at approximately €1.35 billion at the end of August.
In addition to Marathon, the U.S. company Semler Scientific and the Japanese company Metaplanet also continued buying bitcoin in August. The medical technology company Semler Scientific announced two bitcoin purchases in August, which increased its bitcoin holdings by nearly 200 bitcoins. Having started purchasing bitcoin in May, Semler Scientific's bitcoin holdings grew to over 1,000 bitcoins, valued at approximately €53 million at the end of August. Similarly, the investment and consulting firm Metaplanet made two bitcoin purchases in August, increasing its bitcoin holdings by approximately 115 bitcoins. At the end of August, Metaplanet's bitcoin holdings amounted to about 360 bitcoins, valued at approximately €19 million.
Institutional Activity Related to Bitcoin
In addition to the bitcoin purchase announcements, August saw several news items related to institutional Bitcoin-related holdings. It was revealed in August that bank asset managers were the largest holders of U.S. Bitcoin spot ETFs at the end of the second quarter, holding approximately €4.3 billion worth of Bitcoin spot ETF shares on behalf of their clients. The largest individual holders were Goldman Sachs and Morgan Stanley, two of the largest banks in the US, whose Bitcoin spot ETF holdings were valued at approximately €380 million and €170 million, respectively.
Another significant news item related to Morgan Stanley emerged in August, as CNBC reported that the largest bank in the U.S. had given its financial advisors permission to recommend U.S. Bitcoin spot ETFs to some of the bank's clients. Morgan Stanley is reportedly the first major U.S. bank to take this step, which is a significant milestone, given that the bank has around 15,000 financial advisors.
There were also news items from Europe regarding U.S. Bitcoin spot ETF holdings, with the London-based hedge fund Capula Investment Management announcing its U.S. Bitcoin spot ETF holdings in August. According to a filing with the U.S. Securities and Exchange Commission (SEC), the hedge fund held over €420 million worth of BlackRock and Fidelity Bitcoin spot ETFs at the end of the second quarter. Capula Investment Management is the fourth-largest hedge fund in Europe.
In addition to news from the U.S. and the UK, an interesting announcement came from South Korea, related to the world's third-largest public pension fund. South Korea's National Pension Service (NPS) announced that it had purchased 24,500 shares of the U.S. company MicroStrategy for approximately €30 million. MicroStrategy held about €12 billion worth of bitcoin at the end of August, and the company's stock price closely tracks the price of Bitcoin, making MicroStrategy an indirect way to invest in Bitcoin.
Sony to Release Ethereum Layer 2 Scaling Solution
The Japanese electronics giant Sony announced in late August plans to release an Ethereum layer 2 scaling solution called Soneium. Soneium aims to combine Web3, seen as the latest development of the internet based on blockchain technology, with everyday internet services (Web2). Soneium also seeks to differentiate itself in the competitive Ethereum scaling market by offering opportunities related to entertainment, gaming, and finance. Chainlink, a provider of oracle solutions, is one of Sony's partners in the launch of Soneium.
Positive News Regarding Aave
The Aave DAO, which is behind Aave, announced in early August that it had successfully issued a $100 million loan on the blockchain in collaboration with Trident Digital, IntoTheBlock (ITB), and TokenLogic. For this fixed-rate loan, 33,000 ether are locked in ITB's smart contract solution for three months. According to comments from the loan issuers, the loan issued on the blockchain provides security for both the borrower and the lender due to its fixed rate and terms.
Aave's AAVE token was among the best-performing cryptocurrencies in August. A significant factor behind the price increase has been the purchases made by large investors, so-called whales. First, on August 20, two investors bought AAVE worth approximately €3.5 million. Then, on August 22, a single investor purchased AAVE worth nearly €9.5 million. In addition to these large investors' purchases, AAVE's price increase has also been influenced by the increased use of Aave's service in recent times.
Summary
August saw several news items related to companies and institutional players increasing their bitcoin holdings and activities related to Bitcoin. The trend of companies increasing their bitcoin holdings has been in the headlines since August 2020, when the U.S. company MicroStrategy made the first significant bitcoin purchase by a company. Since then, many companies have followed MicroStrategy's lead, and in 2024, several companies began regularly increasing their bitcoin holdings, similar to MicroStrategy. These bitcoin purchases by multiple companies create a continuous demand for Bitcoin, which naturally provides a good foundation for Bitcoin's future price development.
The growth of bitcoin holdings by institutional players can be seen to have begun in earnest with the Bitcoin spot ETFs approved in the U.S. in January 2024. The growing interest from institutional players and their professional investor clients is a sign of a trend in which Bitcoin and cryptocurrencies are establishing themselves as viable asset class alongside stocks and other traditional asset classes.
Sony's plan to release an Ethereum layer 2 scaling solution is very positive for the largest smart contract platform on the market. Sony's plans can be seen as a recognition of Ethereum's technological advancement, as instead of creating a new competing platform to Ethereum, the electronics giant wants to leverage Ethereum's existing and proven infrastructure.
Aave's AAVE token was among the best-performing cryptocurrencies in August and stood out positively among the cryptocurrencies offered by Northcrypto. Aave's near-term outlook also appears positive, thanks to the growing popularity of Aave's peer-to-peer lending service and the strong confidence of large investors.

Ville Viitaharju
Cryptocurrency specialist