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This Week’s Top Stories

“FTX Customers Will Get Back Billions” – Monday, 7 October

• John Dorsey, a judge in the U.S. Delaware Bankruptcy Court, has approved FTX's bankruptcy plan, marking the end of the proceedings after the exchange collapsed two years ago.
• According to the plan, almost all FTX creditors will receive 119 percent of the amount of their allowed claim as of November 2022, when the exchange filed for bankruptcy protection. While this is very positive news, there are some creditors who remain unhappy with the deal, as crypto prices have increased significantly since November 2022.

“HBO found Satoshi! (NOT!)” – Tuesday, 8 October

• HBO filmmaker Cullen Hoback has named Peter Todd, a Bitcoin core developer, as who he believes to be the real Satoshi Nakamoto. Todd of course has already denied this claim and stated that Hoback is “grasping at straws”.
• While the Bitcoin community has not expected much from these claims – since similar accusations have surfaced before with no substance and are unlikely to be any different this time – there has been some activity around the story in the memecoin sphere and on Polymarket, as crypto degens always love a new opportunity to gamble on such news.

“The FBI created its own Token To Take Down Crypto Market Manipulators” – Wednesday, 9 October

• According to Reuters, federal prosecutors in Boston have filed charges against four cryptocurrency companies and 14 individuals, including Gotbit, ZM Quant, CLS Global, and MyTrade, along with their leaders and employees. This marks the first criminal prosecution of financial services companies for market manipulation and sham trading in the crypto sector.
• There has been speculation about whether the FBI has been active in the crypto space over the past few years and this case finally sheds some light on this: The FBI has actually created their own coin, called "The NexFundAI Token", and enlisted the services of the indicted firms to take down the market manipulators.

A Quick Crypto Overview: Octover?

Maybe you’ve read our latest article on Bitcoin’s seasonality and the potential impact of the halving, U.S. elections, and Fed rate cuts on Bitcoin’s price action over the coming months. So, you might be wondering: when will this “Uptober” start? Currently, the price action certainly feels more like “Octover.” Let’s take a look at Bitcoin’s price action and compare it to the same time last year. Interesting? Of course, this doesn’t necessarily mean anything, and it doesn’t make it hurt any less when looking at the S&P 500 reaching new all-time highs on a daily basis. Will crypto catch up, or is this time different, with digital assets failing to capture some of the positive sentiment after the U.S. rate cuts? Time will tell.

Have you looked at the price of MicroStrategy’s shares (MSTR) lately? While Bitcoin is still trading within its sideways range, just above $60’000 at the time of writing, MSTR is approaching a new multi-year high, trading just below $200. MicroStrategy’s stock is up a staggering 1’300 percent since its 2022 lows, while Bitcoin is up a little more than 300 percent in the same period. Is the sole reason for this price surge in MSTR not MicroStrategy’s exposure to Bitcoin itself? Very interesting, and some Bitcoiners might wonder why that is. Michael Saylor doesn’t really care, does he? He owns both, and his net worth has increased tremendously over the last two years. Well played, Michael! By the way, MicroStrategy’s all-time high was reached in March 2000 and sits at $333, adjusted for the stock split.

What’s Happening On-Chain? Murad the New Main Character with “The Memecoin Supercycle”

The world of memecoins is a story richer this week. While you surely have witnessed the craze in memecoins especially on Solana over the past few weeks, you might not have heard of Murad, the new main character in the memecoin trenches, as crypto twitter would say it. Murad presented his personal view on memecoins at this year’s Token 2049 in Singapore, titled “The Memecoin Supercycle” and the recording went viral with over 1.6 million views on X alone. In his presentation, he argues for memecoins and against pretty much any other token, for various reasons. Some of the memecoins he mentions have skyrocketed in value over the past weeks, leaving many to wonder: What does this mean for the crypto market in general? Is Murad right, should we all just hold memecoins?

While only you can answer this question for yourself, ZachXBT, the famous on-chain investigator, discovered and published some of Murad’s wallets, revealing that Murad holds more than $24 million in memecoins. ZachXBT argues that Murad uses his large following on X to pump illiquid, low capitalized memecoins for his own benefit. And while there might be some truth to it, as of today, Murad is still holding most of his memecoins and continues to stick to his plan, as presented in his presentation.

Recently ZachXBT accused another famous crypto twitter figure, Ansem, of promoting low-market-cap memecoins to his 500’000 followers. Stay vigilant out there and make sure you do your own research. While memecoins may seem to promise the quick buck, trading them comes with high risks, as we have pointed out many times in the past.

Digital Asset Fund Flows: Multi-Asset Products with 16th Week of Net Inflows

Looking back at last week, digital asset investment products saw minor outflows totaling $147 million during a week coinciding with downward price action for Bitcoin and the crypto market.

Swiss investors appear to be among the most convinced crypto believers in the world, as digital asset investment products in Switzerland saw inflows of $35 million last week, while the U.S. experienced outflows of more than $200 million. Bitcoin and Ethereum products both saw net outflows last week while multi-asset products saw net inflows for the 16th straight week, with almost $30 million of net inflows.

While traditional markets have been on a tear this week, the crypto markets are struggling. This price action is also reflected in this week’s ETF flows. While Monday was a very positive day for Bitcoin, with $235 million in net inflows into BTC spot ETFs, the other days saw small net outflows. Ethereum flows continue to remain low, with minor net outflows.

It is worth keeping an eye on the flows into these spot ETF products. In the coming weeks, the 13F filings in the U.S. will be published, revealing which companies have added to or reduced their exposure to BTC and ETH spot ETFs over the last quarter.

Market Sentiment: Crypto and Stocks Are Diverging Apart

Crypto market sentiment is starting to diverge from that of the U.S. stock market, which is no surprise, as U.S. stocks have been on a tear again this week. The fear and greed index for the crypto market has fallen back into fear territory today (32), while the CNN index for U.S. stocks is at greed levels (69), nearing extreme greed. This divergence between crypto and stocks over the last few weeks is noteworthy, as it hasn’t been this extreme for quite some time. It’s something to keep an eye on!

Other Relevant News

• Uniswap Developer Unveils Own Layer-2 Network, Unichain, Built on Optimism Tech. – Link
• Vitalik donates memecoins, that were sent to his address to charity, among them 10 billion MOODENG. – Link
• According to Politico, if Trump wins the presidential election, Robinhood Chief Legal Officer Dan Gallagher may become the next US SEC Chairman. – Link
• The UAE exempts crypto transactions from value added tax. – Link
• Crypto exchange Cryptocom has filed suit against the U.S. SEC. Its decision to sue the SEC follows receipt of a Wells notice from the Commission staff. – Link
• After Bitwise filed an S-1 registration statement for an XRP ETF last week, crypto investment firm Canary Capital also filed a registration statement for a spot XRP ETF with the U.S. SEC. – Link
• Bitfinex deemed ‘sole victim’ eligible for recovery of $7.4 billion Bitcoin from 2016 hack. – Link
• A 'substantial majority' of Fed favored large cut in Sept, FOMC minutes show. – Link
• Inflation rate hit 2.4% in September, topping expectations. – Link

Looking Ahead: Will Crypto Catch Up?

While stock market participants are celebrating “Uptober” crypto traders are somewhat wondering what this seasonality meme is all about, because currently it feels more like “Octover”, except for memecoin degens, maybe? Memecoins have been in the spotlight again over the last few weeks, with some of them performing really well, certainly better than Bitcoin and many other cryptocurrencies this week. One of the questions now is whether the crypto market will catch up with the stock market. Or what happens when the stock market slows down? Will crypto then take over? It might also be worth keeping an eye on news surrounding the U.S. government and its BTC holdings, as there are some rumors circulating that they might currently be selling their bitcoin stash. This could potentially explain of the current price action and divergence from the price action of U.S. stocks.

Looking back at last year, Bitcoin and the broader crypto market also struggled through mid-October before gaining momentum toward the end of the year. It will be interesting to see how Bitcoin and crypto perform as we approach year-end, especially since this period has historically been very positive for Bitcoin, particularly in combination with the halving cycle.

Below, you can find some of the key data releases and events to watch out for next week.

Monday, 14 October 2024

• Switzerland – PPI

Thursday, 17 October 2024

• Eurozone – CPI, Core CPI
• U.S. – Initial Jobless Claims
• Japan – CPI, Core CPI
• China – GDP