In September 2024, the cryptocurrency market saw both technological advancements and economic influences from global markets. The highlight of the month was the significant economic stimulus introduced by China, which, along with other events, impacted cryptocurrency prices.

Key Events: Rate Cuts in both China and the US

The U.S. Federal Reserve implemented a 50 basis point rate cut during its September 2024 meeting, marking the first rate reduction in four years. This cut reduced the federal funds rate to a range of 4.75% to 5%, shifting the Fed’s stance from fighting inflation to preserving employment and economic growth. The decision came as inflation approached the Fed's target of 2%, allowing policymakers to focus more on supporting the broader economy.

At the same time, China also unveiled a major economic stimulus package that cut mortgage rates and reserve requirements for banks. They have also injected 800 billion yuan (approximately $113 billion) to support Chinese stocks and announced plans to create a stock market stabilization fund. This move aimed to boost liquidity and provide support to struggling sectors, such as real estate.

These rate cuts had a notable impact on financial markets, driving gains in major U.S. stock indices, including the S&P 500 and the Nasdaq, as well as China stock indices like the CSI 300 and the Hang Seng Index. A global environment of lower rates and increased liquidity is a potential positive driver for prices, particularly for assets like Bitcoin, which often benefits from such macroeconomic conditions

Market Overview

Despite some favorable tailwinds, key cryptocurrencies like Bitcoin and Ethereum saw slight declines due to geopolitical tensions in the Middle East.

Bitcoin (BTC): Bitcoin's price fluctuated around $61,000 throughout September. Historically, Bitcoin has been positively correlated with liquidity, so the increased global liquidity mentioned previously had a mild supportive effect​.

Ethereum (ETH): Ethereum saw a drop of about 4.5%, closing the month at around $2,385. This decline was driven by reduced DeFi activity and outflows from key Ethereum-based products​.

Major Hacks and Security Issues

September was a difficult month for crypto security, with over $120 million stolen in a series of high-profile hacks:

BingX: A Singapore-based exchange that lost approximately $44 million in a single incident, making it the hardest-hit platform of the month.

Indodax: One of Indonesia’s largest cryptocurrency exchanges, also reported an $18 million loss, making it the third-largest hack of the month.

These attacks follow a broader trend of Asian exchanges being targeted, as hackers continue to exploit security gaps in the region’s rapidly growing crypto markets. Institutions would do well to learn more about more stringent security measures they can adopt in the face of this threat.

Technological Developments

Flow (FLOW) Crescendo Network Upgrade: On September 4, Flow completed a major upgrade aimed at improving transaction efficiency and reducing costs, helping make it more competitive in the blockchain space​.

EOS Hard Fork: EOS underwent a hard fork on September 25, aimed at enhancing governance and network functionality. This change is expected to improve user experience and possibly drive adoption.​

MakerDAO Stablecoin Launch: MakerDAO introduced its new USDS stablecoin and the Sky governance token on September 18, part of its broader effort to stabilize and grow its ecosystem.

Looking Ahead

September 2024 saw a mix of technological progress and economic shifts affecting the crypto market. While hacks and price declines created challenges, increased liquidity from China and the US and continued blockchain innovation offer hope for future market recovery.

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