In markets
Despite the US government shutdown, Uptober has lived up to its name so far, with Bitcoin seeing its second-best start to the month ever, climbing to a new all-time high on October 5, and bettering it the following day by reaching A$189,637 (US$125,989).
Fabian Dori, Chief Investment Officer at Sygnum Bank, believes the political dysfunction behind the shutdown actually encouraged investors to turn to BTC as a store of value as their faith in traditional institutions faltered. The shutdown also helped avoid one potential landmine, with the Bureau of Labor Statistics unable to release its September jobs report. Meanwhile, Jeff Bezos became the latest high-profile figure to worry publicly about an AI bubble, with one breathless report claiming the bubble was 17x larger than the Dotcom one.
Nobody outside of crypto appears to have paid much attention to Bitcoin’s new all-time high, with Google search interest for Bitcoin remaining low. This is arguably a good thing, as retail FOMO to new ATHs is often followed by a crash. Bitcoin finishes the week up 9.3% to trade around A$188,700 (US$124,847).
Ethereum is also within sight of a new all-time high, following a surge overnight after Grayscale announced staking for its Ether ETF. It finishes the week up 11.4% to trade around A$7,108 (US$4,702). Dogecoin and BNB also hit double-digit percentage increases. The Crypto Fear and Greed Index is at 70, or Greed.
In Headlines
Revenue falls in September
Blockchain network revenue fell across the board in September due to reduced volatility, according to VanEck. Ethereum network revenue fell by 6%, Solana’s fell by 11%, and Tron plunged 37% — but as it deliberately reduced gas fees by 50% in August, this was still a good result. Tron took US$3.6 billion (A$5.4B) in fees over the last year, while Ethereum generated US$1 billion (A$1.5B).
Bitmine adds to stack, Strategy makes big profits
Tom Lee’s Bitmine this week added another 179,251 ETH to its bags bringing its total to 2.83 million. In just a few months, the firm has cornered 2.34% of the ETH supply. Lee said that following Token2049 he was even more confident “the two Supercycle investing narratives remain AI and crypto” and ETH was best placed to benefit from the themes which would “play out over decades.” Meanwhile, Strategy announced a US$3.9 billion (A$5.9B) increase in the value of its Bitcoin across the third quarter.
Grayscale ETH ETF adds staking
Grayscale has become the first major issuer to add staking to its Ether ETF. Given its ETHE product has 2.5% fees, that’s not likely to be a major drawcard; however, staking is a welcome addition to its Ethereum Mini Trust ETF, which only has a 0.15% fee. Ethereum surged 4.5% on the news, with BlackRock and other issuers likely to follow suit soon. 10x Research’s head of research, Markus Thielen, said: “This would mark a monumental structural shift in how institutional capital flows into Ethereum, unlocking a new era of yield-driven participation.” It remains to be seen how much ETH the ETFs can actually stake, or how much they will need to be able to borrow, as they need to be able to quickly cover redemptions despite the often very long queue to exit staking. SharpLink ETH treasury company pointed out that it can stake 100% as it’s not bound by the same rules.
Record week for crypto fund inflows
Globally, digital asset funds attracted a record US$5.95 billion (A$9B) last week according to CoinShares. Most of that went to the US Bitcoin and Ether ETFs, with the Bitcoin ETFs hauling in US$3.24 billion (A$4.9B) in inflows last week, which is the highest number this year. BlackRock’s IBIT entered the 20 largest ETFs after its assets neared A$150B (US$100 billion). The Ethereum ETFs saw US$1.3 billion (A$2B) in inflows.
Everybody is launching a Perp DEXs
Hyperliquid has been the standout crypto project of the past year, and everybody wants in on the action. Perpetual futures DEX trading volumes crossed US$1.14 trillion (A$1.72T) in September for the first time. DeFi Llama delisted perp DEX Aster, for having suspiciously large volumes that corresponded closely to Binance’s perp markets. The volume on Aster has been ten times higher than Hyperliquid lately, despite having just a fraction of the open interest. It’s not really on-chain either, and neither is Pacifica on Solana, which is operated by former FTX employees. A new ZK L2 project called Lighter has just launched mainnet and claims to be faster and have higher security than Hyperliquid. OG project Synthetix is about to launch perps on Ethereum mainnet (using an off-chain orderbook) while Aptos is testing out Decibel, which promises to be on-chain and private. And for good measure, Tron’s Justin Sun has launched SunPerp, claiming to have the lowest trading fees.
Thailand’s new crypto ETF rules
Thailand’s Securities and Exchange Commission is drafting new ETF rules so they can be offered by local mutual funds and institutions from early next year. Secretary General Pornanong Budsaratragoon said the ETFs won’t just be Bitcoin. “Our possibility now is to broaden the criteria for the crypto, such as a basket of cryptocurrencies,” she said. “We want to have a broader supply of those crypto assets in the ETFs.”
Taiwan’s new crypto rules
The Financial Supervisory Commission (FSC) of Taiwan has released new anti-money laundering guides for crypto exchanges and firms. The new laws require all crypto firms to register with the government and provide a risk assessment report each year. On September 30, the FSC opened the crypto ETF market to local professional investors.
Where to next?
The only month to see better average Bitcoin returns than Uptober is November, which sees an average 37.64% return. Overall, crypto analysts seem positive about what lies ahead for prices in the near term. SwissBorg founding partner Alex Fazel agrees the best is yet to come, because we haven’t seen the euphoric stage of the cycle yet. “We won’t see a long bear market anymore… We’re going to see a very extended bull run but with really big corrections along the way.” The altcoin season indicator is at 69, which is just below the mark that would indicate altseason. Billionaire Paul Tudor Jones believes we are about to see a monster rally, just like the one that saw the Nasdaq double in six months during the Dotcom bubble, with a crash following soon after. But, that’s standard practice for crypto markets anyway.
Until next week, happy trading!
