Monthly Review of September 2024

This monthly review examines the most important cryptocurrency-related news of September. In September, the most significant cryptocurrency news involved European banks' decisions to begin offering cryptocurrency services, BlackRock's Bitcoin-related activity, the growing popularity of Bitcoin mining, and MicroStrategy's €1.4 billion bitcoin purchases.

              
September in the Cryptocurrency Market
September was a positive time for cryptocurrency price movements. Positive influences on cryptocurrency prices included the U.S. Federal Reserve's decision to lower the interest rate by 0.50 percentage points on September 18. This was the Fed's first rate cut in about 4.5 years. Among the cryptocurrencies offered by Northcrypto, ApeCoin and Aave performed the best in September, with their prices rising by approximately 27% and 21%. The prices of Solana and Dogecoin rose by just over 15%, while the prices of Bitcoin and Chainlink increased by about 8%. Ethereum and Litecoin prices rose by less than 5%, while the price of Polygon ended the month about 4% lower than at the beginning of the month.
European Banks to Offer Cryptocurrency Services
September saw news related to two major European banks starting to offer cryptocurrency services. First, at the beginning of September, the Swiss bank Zürcher Kantonalbank (ZKB), or Zurich Cantonal Bank, announced the launch of cryptocurrency trading and custody services. Initially, trading and custody services will be offered for the two largest cryptocurrencies in the market, Bitcoin and Ethereum. According to the Swiss bank, these cryptocurrency services are aimed not only at retail clients but also at other banks. ZKB manages approximately €210 billion in assets and is thus Switzerland’s fourth-largest bank.
Germany's Commerzbank, one of the country's largest banks, began offering cryptocurrency services at the end of September. This is done in collaboration with Deutsche Börse's subsidiary Crypto Finance. In practice, this means offering trading and custody services for Bitcoin and Ethereum to the German bank's corporate clients. Commerzbank received a license to custody cryptocurrencies in 2023. Commerzbank has approximately 11 million personal customers and over 70,000 corporate customers in Germany and around the world.
World's Largest Asset Manager's Bitcoin-Related Activity
In September, there were two significant Bitcoin-related news items connected to BlackRock, the world's largest asset manager. The U.S. Securities and Exchange Commission (SEC) approved the listing and trading of options on BlackRock's Bitcoin spot ETF on the Nasdaq stock exchange at the end of September. An option is a derivative contract that gives the right to buy or sell an underlying asset at a specific price in the future. The approval of Bitcoin ETF options is a positive step forward as it offers investors more ways to indirectly invest in Bitcoin.
Another news item related to BlackRock was the release of a Bitcoin-related report in September titled "Bitcoin: A Unique Diversifier." The report is generally very positive for Bitcoin. According to the report, Bitcoin addresses several monetary issues, with its limited supply, near-instant global digital transfers, and being the first fully open global monetary system. The report’s conclusion states that Bitcoin can serve as a unique alternative in the face of various uncertainties, such as geopolitical tensions, increasing government debts, and political instability.
The Growing Popularity of Bitcoin Mining
September brought interesting news related to Japan's largest energy company, TEPCO. TEPCO’s subsidiary Agile Energy X has begun mining Bitcoin. Renewable energy, which would otherwise go unused, is being used for mining. In Japan, solar and wind power plants have had to limit their production to prevent the national grid from overloading. According to comments from the company, Bitcoin mining incentivizes renewable energy producers to increase their production.
The popularity of Bitcoin mining is also growing in terms of numbers, as Bitcoin hashrate reached a new record level in September. Hashrate refers to the total computational power miners use to maintain the Bitcoin network. According to data from blockchain analytics company Glassnode, the hashrate peaked at over 745 ExaHashes per second (EH/s) in September. For comparison, the average hashrate was around 400 EH/s in September a year ago. With the hashrate at record levels, the Bitcoin network can be considered more secure than ever before.
MicroStrategy Purchased €1.4 Billion Worth of Bitcoin
In September, the U.S. company MicroStrategy, which provides business intelligence solutions, cloud-based services, and mobile software, increased its bitcoin holdings twice. First, MicroStrategy bought 18,300 bitcoins for approximately €1 billion. Then, the company issued convertible notes worth about €900 million. Of the funds raised, around €410 million was used to purchase bitcoin. With this purchase, MicroStrategy’s bitcoin holdings grew by 7,420 bitcoins. MicroStrategy has been purchasing bitcoin multiple times since August 2020, and by the end of September, the company owned a total of 252,220 bitcoins, valued at around €14.5 billion.
Summary
European banks have increasingly entered the cryptocurrency market, especially this year and last year. As seen in the cases of both Swiss bank Zürcher Kantonalbank and German bank Commerzbank, banks often start by offering cryptocurrency services for the two largest cryptocurrencies in the market, Bitcoin and Ethereum. While the attitude of banks toward cryptocurrencies is clearly becoming more positive in Central Europe, there are currently no signs of a similar trend starting in Finland.
In the U.S., BlackRock, which entered the cryptocurrency market in earnest with the launch of Bitcoin spot ETFs in January, continued to make strides related to Bitcoin in September. The SEC's decision to approve options for BlackRock’s Bitcoin ETF further increases the number of Bitcoin-related investment products, making Bitcoin more accessible to a broader audience. BlackRock’s report, which highlights Bitcoin's uniqueness as an investment asset, boosts Bitcoin's legitimacy, especially in the eyes of institutional players. Emphasizing uniqueness can be seen practically only as a positive thing, as there are very few investment assets like Bitcoin that differ from traditional investment assets.
The group of companies interested in Bitcoin mining continued to grow in September with TEPCO’s decision to start mining operations. The company’s rationale for the decision highlights the benefits of Bitcoin mining. Bitcoin mining provides flexible demand, which in many cases has emerged as a significant challenge in increasing the use of renewable energy sources. Another positive for Bitcoin was the rise in popularity of mining, measured by hashrate, to a record high in September. This is a very good sign, especially when considering the current situation, where miners' primary source of income, the Bitcoin block reward, was halved less than six months ago.
The U.S. company MicroStrategy continued buying bitcoin in September, making its largest single purchase in euros to date, worth about €1 billion. MicroStrategy has made dozens of bitcoin purchases over the past few years, and this strategy seems to be working very well so far. By the end of September, the company’s bitcoin holdings were about €5.5 billion in profit, and the company’s stock price has risen by about 1,300% since the first bitcoin purchase.

Ville Viitaharju
Cryptocurrency specialist