Crypto Catching Up, Bitcoin Dominance Soaring & AI-Bot Shills Token

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This Week’s Top Stories

“Trump with a 62.5 percent chance of winning on Polymarket” – Thursday, 17 October

• Donald Trump’s chances of winning the U.S. elections jumped to over 60 percent this week as the betting volume on Polymarket crossed $2 billion on the platform. Trump reached his highest chance of winning on Polymarket since August this Wednesday, while the latest NBC polls show a tie at 48 percent.
• Crypto market participants are eagerly awaiting the upcoming U.S. elections, and many hope for Donald Trump to win, as he has been vocal about his stance on Bitcoin and cryptocurrencies. While Kamala Harris has also spoken positively about crypto in the last few weeks, it is less certain how her administration would position itself regarding digital assets.

“ECB cuts rates and Lagarde says inflation is on track” – Thursday, 17 October

• The ECB cut interest rates by another 25 basis points. The ECB lowered its key interest rate from 3.5 to 3.25 percent, which was in line with market expectations. Headline inflation in the eurozone dropped to 1.8 percent in September, falling below the ECB’s 2 percent target for the first time in three years.
• While inflation is declining, economic activity in the eurozone also came in lower than expected. However, the ECB only discussed a 25-basis-point cut despite the recent slowdown in economic activity.

“The FBI in the news again: They caught the SEC Twitter account hacker from January!” – Thursday, 17 October

• A 25-year-old Alabama man was arrested on Thursday for hacking the U.S. Securities and Exchange Commission's X (aka Twitter) account earlier this year as part of an alleged conspiracy to manipulate bitcoin prices.
• The post on X spiked Bitcoin’s price by over $1’000 and raised questions about the security measures within the SEC, such as two-factor authentication (2FA) or similar protections.

A Quick Crypto Overview: Bitcoin Dominance On a Surge!

Bitcoin is trading around $68’000 at the time of writing, and Ethereum is sitting at $2’620. Crypto prices have increased significantly since last week. Do you remember how we were wondering whether crypto would eventually catch up with the U.S. stock market in light of the positive sentiment following the U.S. rate cuts? Well, it seems like we did catch up – at least a little. While the S&P 500 has reached another new all-time high, Bitcoin is still trading below its March highs but is very close to its 2021 high of $69’000.

Bitcoin dominance has surged again this week, draining liquidity from altcoins across the board. BTC dominance is up more than 2.5 percent this month alone. Crazy! The question is, when will it stop, and when will alt season kick off? Or will we see the “Everything season” as Matt Hougan has predicted on his Verified Podcast appearance this year? Time will tell!

Chart of the Week: Gold With A New All-Time High!

Gold has been on an absolute tear this year; it’s trading above $2’700 for the first time ever and is up more than 40 percent since October of last year. As you can see in the chart below, it has only moved upward since the start of the year. Isn’t Bitcoin supposed to be the digital gold? The question is: Will Bitcoin follow in gold's footsteps over the coming months? Will Bitcoin really surpass gold, as Alex Krüger mentioned when he joined us on the Verified Podcast in February?

On-Chain Forensics: Have You Heard Of Terminal Truth?

Back in July this year, Marc Andreessen gifted $50,000 in Bitcoin to an AI bot on X (formerly known as Twitter). The Andreessen Horowitz co-founder gave the AI bot, Terminal Truth, the $50,000 grant to fulfill its goals. You can read their initial conversation here. As we understand it, the bot operates in a twilight zone of semi-autonomy, with the human behind it approving its posts and deciding who it interacts with. For some reason, when it received Andreessen’s grant, the bot promised to spread the “Goatse Gospel.”

Now, fast forward a couple of months to this week: Some crypto degens created the $GOAT token and started shilling it to the AI bot, which then began tweeting about it heavily and even officially endorsed it. $GOAT exploded in price and is currently up more than 2 million percent this week, with a market cap of $350 million.

Digital Asset Fund Flows: Bitcoin Spot ETFs With Huge Numbers This Week!

Last week, digital asset investment products saw inflows of $407 million, a significant shift from the previous week, as we noted in last week’s Wrap. The week ended with a strong Friday, and this week it appears that sentiment toward Bitcoin has finally shifted completely.

On Monday, Bitcoin spot ETFs saw net inflows of $555 million, followed by three strong days with around $400 million of net inflows each—making it a very impressive week so far. BlackRock’s IBIT alone saw nearly $400 million in net inflows on Wednesday. This week is shaping up to be one of the strongest for Bitcoin spot ETFs in a while.

Ethereum spot ETFs are not yet seeing much action. Although they recorded net inflows on three out of four days this week, the size of these inflows is somewhat negligible, especially compared to Bitcoin’s flows. Sentiment toward ETH still seems rather negative, which isn’t surprising, as Ethereum is trading at its lowest levels compared to Bitcoin since 2021.

There’s a good chance that inflows for Ethereum will increase once it finds a bottom relative to Bitcoin. The Bitcoin dominance chart could also provide insight, as dominance just reached its highest level since 2021 this week. Let’s keep an eye on it!

Market Sentiment: Crypto Caught up With U.S. Stock Market

Last week, we discussed how the divergence in market sentiment between the crypto and U.S. stock markets had reached extreme levels not seen in a long time. Now, the crypto markets have caught up, and both are in "greedy" territory. The crypto Fear and Greed Index is at 73, while the CNN Fear and Greed Index for the stock market is at 71.

The last time the crypto index was above 70 was in July, when we were trading at the same levels as we are today. Interestingly, this week, AAII members indicated that they are starting to feel less bullish about the stock market over the next six months. The percentage of bullish members dropped from 49 to 45 percent compared to the previous week.

Other Relevant News

• The Mt. Gox trustee postponed the deadline to repay creditors by one year to October 31, 2025. – Link
• Monochrome Asset Management is preparing to launch Australia's first Ethereum spot ETF. – Link
• SUI price rally sparks $400M insider selling allegations. – Link
• World Liberty Financial, backed by DJT, generates just $9 million in first-day WLFI token sales. – Link
• Grayscale files to convert mixed crypto fund with Bitcoin, Ether and Solana into ETF. – Link
• Quantity Funds launches STKD Bitcoin & Gold ETF, that exposes investors to both assets through their respective futures and ETFs. – Link
• Canary Capital files S-1 for Litecoin spot ETF. – Link

Looking Ahead: Will This Time Be Different?

Bitcoin is trading at a critical price level. As we mentioned in an earlier Weekly Wrap, the market structure of Bitcoin has shifted in terms of price action. Bitcoin reached a higher high in September, followed by a higher low last week, and now another higher high this week. BTC is still trading just shy of its 2021 high and below its current all-time high from March this year.

The total market capitalization for crypto has reached a new multi-month high this week, marking its highest level since July. Bitcoin dominance is also on a tear, up more than 2 percent this month alone.

While the market is looking more like “Uptober” now, participants are closely watching Bitcoin’s price action. Technically, BTC remains within the same price range it has been in since March, and in the past, it has consistently rejected the $70’000 level, trending downwards afterward. Will this time be different?

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

Monday, 21 October 2024

• Cosmoverse, Dubai

Wednesday, 23 October 2024

• Eurozone – ECB President Lagarde Speaks
• Cardano Summit, Dubai

Thursday, 24 October 2024

• U.S. – Initial Jobless Claims

Friday, 25 October 2024

• U.S. – Atlanta Fed GDPNow
• Lugano Plan B Forum 2024, Lugano