The total cryptocurrency market capitalization grew by 8% in September, driven by positive sentiment from the Federal Reserve’s interest rate cut and improving U.S. labor market data, Binance released a market insights report. wBTC maintains a strong market position, with weekly trading volume hitting a record high. ETH, on the other hand, faces the dilemma of rising issuance rates and challenging deflation narratives.
Crypto market cap grows 8%, best September since 2019
The total cryptocurrency market capitalization grew by 8% in September, its best September performance since 2019. Mainly driven by positive sentiment from the Federal Reserve's interest rate cut and improving U.S. labor market data, the People's Bank of China also lowered interest rates and deposit reserve ratios to combat deflationary pressures, injecting 1 trillion yuan into the banking system. These favorable global macroeconomic developments led to a rebound in major stock markets and cryptocurrency markets. However, future economic reports and central bank policies are still worthy of attention.
wBTC weekly trading volume reaches all-time high
wBTC continues to maintain strength in the market, with weekly trading volumes exceeding 100,000 in recent weeks, reaching all-time highs. The supply of wBTC is stable at over 152.4K, accounting for over 65% of the total wrapped Bitcoin market share. Despite facing challenges from new competitors such as Coinbase’s cbBTC, wBTC has maintained its market dominance. However, the report also mentioned that wBTC’s new “multi-jurisdiction and multi-institution” custody model raises transparency and trust issues.
ETH issuance rate rises, deflation narrative challenged
In September 2024, the issuance rate of ETH continued to rise, reaching an annualized rate of 0.74%, the highest level in two years, which moved ETH away from its previous deflationary state. The main reason comes from lower network activity due to lower fees for layer 2 solutions, lower transaction fees and burns preventing continued deflation of ETH, resulting in an increase in daily net supply.
The supply of ETH is no longer decreasing, which challenges its Ultrasound Money narrative. This narrative aims to create a system that resists inflation while preserving purchasing power.
In order to return to its deflationary state, the ETH mainnet needs to increase activity. However, the report also notes that as L2 solutions grow, users are increasingly gravitating toward these scale-out solutions with better availability and lower costs.
RWA hits new highs
Total on-chain RWA reached an all-time high of $12 billion (excluding the $175 billion stablecoin market). Private credit is the largest segment of the market, accounting for approximately 70% of all RWA value ($9.1 billion), thanks in large part to a fintech company called Figure. Tokenized Treasuries have also experienced explosive growth in 2024, from $769 million at the start of the year to over $2.2 billion in September, a growth that may have been impacted by U.S. interest rates at 23-year highs (until the recent rate cut).
(Binance Research: Overview of RWA development and understanding the technical risks and limitations of asset tokenization)
This article Binance analysis in September: wBTC transactions continue to hit highs, and ETH’s deflation narrative is challenged first appeared on Chain News ABMedia.
