Weekly Market Wrap: Crypto Markets Shed $100 Billion as Bitcoin Drops Below $56K

The cryptocurrency market experienced a sharp downturn, with Bitcoin (BTC) leading the charge as it fell below $56,000, resulting in a $100 billion loss across the market. BTC’s decline continued after a brief attempt to break the $60,000 mark, plunging to a monthly low of $55,600. Although it has since recovered slightly, it remains 4% down on the day, with its market cap slipping to $1.12 trillion.

Altcoins Follow Bitcoin’s Lead 

The broader altcoin market mirrored Bitcoin’s slump, with Ethereum (ETH) dropping 5% to $2,400, and Binance Coin (BNB) falling to $510. Among the larger-cap altcoins, Toncoin (TON) suffered the most significant loss, plummeting by over 11% to $4.65.

Market Sentiment and External Factors

Analysts attribute the selloff to weak August ISM manufacturing data in the U.S. and a broader market decline in Asia, where indices like Japan’s TOPIX and South Korea’s KOSPI also fell. With traditional and crypto markets digesting bearish sentiment, volatility in the crypto sector intensified the overall losses. Investors now await the upcoming non-farm payroll data and potential Federal Reserve rate changes to gauge the future direction of the markets.

Global Crypto Regulatory Updates: Japan, Qatar, and Singapore Make Key Moves

Japan's Financial Services Agency (FSA) has put forward plans to overhaul the nation’s tax code, potentially lowering the tax rate on crypto assets in 2025. The FSA aims to treat cryptocurrencies like traditional financial assets, which could significantly reduce the current tax burden on investors. Currently, crypto profits in Japan are taxed between 15% and 55% as miscellaneous income, while stock trading profits are taxed at a flat 20%.

Qatar’s Financial Centre (QFC) has unveiled a new regulatory regime for digital assets, marking a significant step in the country’s digital transformation strategy. The framework, which includes provisions for tokenization, legal recognition of smart contracts, and custody arrangements, aims to establish a secure and transparent digital asset ecosystem. Qatar Central Bank Governor Sheikh Bandar bin Mohammed bin Saoud Al Thani highlighted the framework as a milestone in Qatar’s financial sector strategy.

Crypto exchange OKX has received a major payment institution (MPI) license from Singapore’s Monetary Authority, allowing it to facilitate crypto trading and cross-border money transfers without volume limitations. Alongside this achievement, OKX Singapore has appointed former MAS regulator Gracie Lin as its new CEO, reinforcing its commitment to expanding in the region. Singapore continues to lead in global crypto adoption, according to a recent study by Henley & Partners.

 

Polygon Developers Transition MATIC to POL, Ushering in New Era for Network

 

Polygon developers have officially launched the transition of the MATIC token to POL after a year of community discussions. The migration introduces POL as the new ticker symbol for the native gas and staking token on the Polygon PoS chain. This upgrade is a key step in Polygon’s evolution into a ZK chain and its integration with AggLayer, designed to consolidate liquidity and state across multiple chains. POL will retain MATIC’s tokenomics and maintain a supply of 10 billion tokens.

The transition process: MATIC holders on the Polygon PoS chain will be automatically upgraded to POL. However, holders of MATIC on Ethereum, Polygon zkEVM, or centralized exchanges will need to actively migrate their tokens via a migration contract. The initial exchange ratio is set at 1:1, with emissions increasing gradually by 2% over the next ten years to incentivize validator participation.

Expanded functionality: The POL token will feature enhanced roles in block production, zero-knowledge proof generation, and participation in Data Availability Committees (DACs) as Polygon continues to develop its network capabilities. This transition marks a significant milestone in Polygon’s journey, aligning with its broader vision of scaling through both its Polygon PoS sidechain and Polygon zkEVM.

XBO Featured Coin of the Week — Toncoin (TON)

 

Toncoin (TON), the native cryptocurrency of The Open Network (TON), is under intense scrutiny as it faces potential market volatility linked to Telegram’s legal challenges in South Korea. Originally developed by Telegram in 2017, the TON blockchain was designed to revolutionize digital communication and transactions. Although Telegram withdrew from the project in 2020 following SEC intervention, the project was revived by an independent community and is now supported by the Switzerland-based TON Foundation.

The ongoing investigation by South Korean authorities into Telegram's alleged involvement in distributing deepfake pornography has raised concerns among Toncoin investors. This scrutiny could lead to increased volatility and potential price drops, with fears that TON might dip below the $5 mark. The investigation, which is part of broader efforts to combat digital sex crimes, has already involved international cooperation, adding further pressure to the market.

Despite the bearish outlook, major Toncoin investors, or "whales," are increasing their holdings. Data shows a significant rise in Toncoin balances among wallets holding between 1 million and 10 million TON. This accumulation coincided with the news of Telegram founder Pavel Durov’s arrest in France. In contrast, smaller investors seem to be offloading their assets, as wallets with 10,000 to 1,000,000 TON have seen a decrease in balances.

Toncoin, with a circulating supply of over 2.5 billion and a total supply exceeding 5.1 billion, is integral to The Open Network’s ecosystem, particularly within the Web3 infrastructure of Telegram Messenger. As the legal issues unfold, the TON Foundation’s goal to empower users with control over their digital identity, data, and assets by 2028 faces new challenges. Investors and market participants are closely monitoring these developments, as TON navigates a complex period of uncertainty.

Disclaimer: Our content does not constitute financial advice. It is only intended for informational and educational purposes.