Weekly Crypto Wrap: 26th October 2023

TLDR

• Bitcoin skyrockets 18% in 2 days reaching a high of US$35,280.
• XRP jumps 7% after SEC drops charges against Ripple execs.
• Solana rallies 26% in a week with year-to-date gains of 170%.
• Vitalik Buterin: I haven't "sold" ETH for personal gain since 2018.
• Uniswap Labs’ fee switch yields US$350K in first week.

BTC Markets in the news 

Crypto growth and the quest for regulatory safeguards – Ausbiz.

Caroline Bowler, CEO of BTC Markets, discusses the potential for sustained Bitcoin growth due to its limited supply. She emphasises the need for cryptocurrency regulation and welcomes Australia's new legislation, aligning with global standards. This balanced approach focuses on intermediaries, boosting investor safety. Watch the full interview here.

BTC Markets announcements

Less than a week until the ASX Refinitiv 4th Markets Day for Charity.

Once again, BTC Markets is proud to represent the crypto industry in the ASX Refinitiv 4th Markets Day for Charity. Taking place on Tuesday 31st October, all trading profits from the day will be donated to charity. How to get involved? It’s easy! Just log in and trade on the day.

Join us and let’s raise a million dollars for those in need. Read more about this event.

Empowering clients to optimise high volume trades.

Our OTC desk is dedicated to assisting clients in a variety of ways, from repositioning their SMSF holdings, guiding them through EOFY or facilitating the release of additional capital during tax season.

We routinely help businesses engaged in crypto payments by collaborating with them to ensure they maximise the value of their frequent conversions to AUD.

Whether you're a seasoned trader seeking a discreet and efficient way to execute substantial positions or a business in need of a streamlined solution for managing your crypto portfolio, our OTC team is ready to assist you.

Schedule a call with our team of expert traders today.

BTC Markets sponsors Blockchain APAC's Crypto Assembly.

Considering the recent announcement by the Australian Treasury regarding proposed crypto regulation for Australian exchanges, engaging in government discussions has become more crucial than ever. That's why BTC Markets is a foundational sponsor of the Blockchain APAC Crypto Assembly event scheduled for November 23rd and 24th 2023 in Sydney.

As an active contributor to the crypto industry, we strongly believe in supporting its growth and advancement. Our sponsorship underscores our dedication to educating industry stakeholders and users, facilitating discussions on regulatory matters, and actively participating in the creation of legal frameworks that benefit all participants in this ever-evolving landscape.

Join us as key players in the industry share their wealth of experience, expertise, and unwavering passion for blockchain and cryptocurrencies. For more information, please visit the event page.

The ATO deadline is less than 1 week away!

Once again, it's that time of the year. If you're handling your own tax return, remember the ATO’s deadline is on October 31st, 2023. We offer a seamless integration with leading crypto tax specialist tools that cater to various reporting requirements. To discover more, please visit our tax help page.

The tokenisation of real-world assets.

A great piece from our Head of Finance, Charlie Sherry, as he discusses the tokenisation of real-world assets.

“RWAs is a broad term but the majority of use cases relate to real estate, private credit and treasuries. Let's take a look at some players in each of these categories.”

Read more about different use cases from treasuries to real-estate and the big players that are already in the space.

What is an Exchange-traded-fund (ETF)?

• Bitcoin ETFs are progressing towards approval in the US.
• An ETF is a financial product that tracks an assets performance.
• Major financial institutions like BlackRock are actively involved.
• Broadly seen as a positive sign for the cryptocurrency market.

With all the buzz around the pending approval of a Bitcoin Exchange-Traded Fund (ETF) in the US, many people are wondering what are they and how does it impact the price of Bitcoin? Learn more in our ETF deep dive.

State of crypto

• Bitcoin’s price surges 18% in two days amid ETF frenzy.
• BlackRock using ticker symbol IBTC in ETF anticipation.
• US court questions the SEC's stance on Bitcoin ETF.
• Bitcoin dominance at levels not seen since April 2021.

In an action-packed week for the crypto markets which saw Bitcoin’s price surge almost 18% in two days, peaking at US$35,280 just after noon in Tuesday's trading session.

This surge in price can be attributed to a series of significant news events that drove Bitcoin's value to levels not witnessed since May 2022. Notably, the ongoing evaluation by the U.S. Securities and Exchange Commission (SEC) regarding the approval of spot Bitcoin exchange-traded funds (ETFs) has sparked enthusiasm and heated discussions within the finance community.

It is apparent that institutions are closely monitoring these developments, with industry leaders such as JPMorgan suggesting approvals could come within months, potentially preceding the final deadline for the Ark 21Shares application on January 10.

Among the 12 applications under consideration, key players include Grayscale, 21Shares & Ark, BlackRock, Bitwise, VanEck, Wisdomtree, Invesco & Galaxy, Fidelity, Valkyrie, Global X, Hashdex, and Franklin. This diverse range of applicants underscores the broad industry interest in spot Bitcoin ETFs.

The impact of these products on the crypto market has already become evident after a recent social media post by Cointelegraph claiming the SEC had approved BlackRock's spot Bitcoin application. The speculation triggered a substantial surge in Bitcoin's price, resulting in nearly US$100 million in liquidations within the hour. After market participants debunked the news, Bitcoin's price held steady at its pre-fake news level, a departure from the historical pattern of retracement.

According to Ernst & Young's global blockchain leader, Paul Brody, the approval of a Bitcoin ETF is expected to trigger a substantial surge in demand from institutional investors. One SEC commissioner expressed bewilderment at the years-long delay in introducing a Bitcoin spot ETF, highlighting the long-awaited nature of this regulatory advancement.

Wrapping up the news week, Grayscale has emerged victorious in a legal battle against the SEC regarding a spot Bitcoin ETF. As a result, Grayscale's application to convert its GBTC into a spot ETF will be subject to re-evaluation by the SEC.

Crypto market sentiment has soared into the greed zone, currently sitting at 71 on the Crypto Fear & Greed index as Bitcoin dominance hits highs not seen since April 2021, at 54.35%.

The weekly crypto close.

During the last trading week, the crypto market saw a sea of green candles across the board with all majors closing in positive territory.

Bitcoin (BTC) closed at US$29,992.46, exhibiting an impressive gain of 10.45%.

Ethereum (ETH) followed suit, closing at US$1,663.70, gaining 6.80% whilst XRP displayed a positive trend, concluding the week at US$0.5226 surpassing a psychological resistance level and reflecting a gain of 7.22%.

Litecoin (LTC) demonstrated a similar pattern, closing at US$65.26, increasing 5.89% and Cardano (ADA) secured a closing price of US$0.2639, registering a gain of 6.71%.

Notably, Solana (SOL) exhibited a substantial surge on the week, closing at US$29.05 and experiencing a remarkable gain of 32.47%.

Bitcoin continued to affirm its bullish momentum, closing its ninth consecutive weekly green candle, posting a 2.11% increase, and closing at 52.11% dominance for the week.

Simultaneously, the total cryptocurrency market capitalisation gained an impressive 8.16% during the week and ultimately closing at a valuation of US$1.124 trillion.

Year-to-date in the crypto space.

Solana (SOL) remains the top performer, demonstrating an impressive gain of 224.87%, as Bitcoin (BTC) follows with a gain of 109.21%. XRP (XRP) has shown resilience and growth, recording a 64.09% increase.

Ethereum (ETH), is sitting on a 49.84% increase on the year, with Cardano (ADA) showing modest growth at 14.85%. Unfortunately, Litecoin (LTC) continues to remain in negative territory, experiencing a decline of 1.75% on the year.

*The weekly trading stats as of Monday, October 23rd at 11:00 am AEDT, based on data from Tradingview in USD.

**Year-to-date performance as of Thursday, October 26th at 11:00 am AEDT, based on data from Tradingview in USD.

Crypto news

Bitcoin rockets to US$35K as ETF excitement grows.

Investors are chomping at the bit to buy Bitcoin amid renewed hope that a spot Bitcoin exchange-traded fund (ETF) will be granted approval in the near future. In the US, industry insiders are predicting that the Securities and Exchange Commission (SEC) will approve all applications for spot Bitcoin ETFs together. The speculation of the past few weeks has frenzied the market and is reflected in Bitcoin's recent price boom.

On Monday alone, publicly traded crypto funds worldwide absorbed over US$61 million in new capital, enough to account for more than 10% of all net deposits in crypto funds since the start of the year. Once again Bitcoin (BTC) came out on top, with most of the fresh liquidity directed towards Bitcoin funds.

Buy Bitcoin on BTC Markets.

XRP price pumps after SEC drops charges against Ripple executives.

Ripple Labs’ Chief Executive Brad Garlinghouse and co-founder Chris Larsen have had all charges dropped against them, in a lawsuit filed by the US Securities and Exchange Commission (SEC).

In its December 2020 lawsuit, the SEC accused Ripple of illegally raising more than US$1.3 billion in an unregistered securities offering by selling XRP, alleging that the company had violated US securities law.

According to a court filing on October 19th, the SEC will no longer pursue the claims that both Ripple’s CEO and Co-Founder aided and abetted the company in violating securities laws related to the sale of the cryptocurrency XRP. The filing noted that the SEC will continue to pursue its claims against Ripple.

Back in July, Judge Analisa Torres ruled that Ripple Labs’ programmatic sales of XRP tokens to retail investors, did not qualify as financial securities. Judge Torres granted the SEC the opportunity to file an interlocutory appeal, earlier this month rejected the agency’s motion to overturn her ruling, arguing that the regulator failed to meet its burden to show that there were controlling questions of law or substantial grounds for differences of opinion.

Following news reports of the court filing, Ripple’s XRP token hit US$0.52, surpassing a key psychological resistance level, and reflecting a gain of 7%. On Thursday, XRP logged its best daily percentage gain in three months, driven by an inflow of buyers from the spot market. 

The SEC and Ripple Labs have until November 9th, to reach a resolution regarding the institutional sales of the token.

Buy XRP on BTC Markets.

Solana rallies 26% in a week despite FTX sale fears.

SOL continues to "assert itself as the altcoin of choice," according to CoinShares Head of Research, James Butterfill, and has seen a significant increase in network activity and price action over the past four weeks.

Rising activity on the Solana blockchain, an influx of liquidity towards SOL investment products and a tech upgrade that reduced validator hardware requirements and added optional zero-knowledge-compatible encryption, are all likely contributors to its rally in price.

"Solana's recent surge in inflows, coupled with a consistent rise in daily active users for four consecutive weeks, underscores the enthusiasm for this overlooked upgrade," 21Shares analysts said.

Last month, a US bankruptcy court granted the FTX-Alameda estate permission to liquidate its huge crypto holdings, including around US$1.16 billion in Solana tokens and adding to fears of an influx of SOL on the market. Investor sentiment eased last week as the FTX estate staked roughly 5.5 million SOL worth approximately US$122 million at the time.

"The Alameda FUD turned out to be less severe than anticipated," Lucas Outumuro, Head of Research at blockchain intelligence platform, IntoTheBlock, told CoinDesk.

The Solana community is set to have its annual ‘Breakpoint’ gathering in Amsterdam from October 30th to November 3rd, with keynotes from industry leaders at Circle, Google Cloud, Visa, and Greenpeace. For more information click here.

Buy SOL on BTC Markets.

Vitalik Buterin: I haven't "sold" ETH for personal gain since 2018.

In a bid to ease speculation surrounding recent Ethereum (ETH) transfers, Vitalik Buterin, co-founder of the Ethereum blockchain, took to social media this week to address concerns in the crypto community.

In a post on Warpcast, the Ethereum co-founder asserted that rumours around his personal selling of ETH were misleading. According to Buterin, these transactions are mainly charitable donations made to organisations and projects, requiring the transfer and sale of ETH to pay for operational expenses.

“Regular reminder: If you see an article saying "Vitalik sends XXX ETH to [exchange]", it's not actually me selling, it's almost always me donating to some charity or nonprofit or other project, and the recipient selling because, well, they have to cover expenses. I haven't "sold" ETH for personal gain since 2018.”

Whether the wider crypto community will be appeased by this clarification is yet to be seen. Many observers have perceived the transactions as selloffs, contributing to a bearish market sentiment among Ethereum investors as of late.

In addition to supporting the Ethereum Foundation and its affiliated businesses, Vitalik Buterin manages a charity called Kanro, providing funding to a variety of projects via a US$70 million multi-signature wallet. Kanro’s mission revolves around researching global solutions for the pandemic and potential future epidemics, the charity primarily receives funding from Crypto Relief.

Speaking in a recent AMA (ask me anything) on Farcaster, Buterin said he’s concerned that “the big techno-political questions of the 21st century just get decided by whatever happens in AI over the next decade”, rather than through the decentralised ideals that the crypto industry is built upon. He worries about the existential risks that stem from the technology’s advancement, and “how/if the Ethereum community could productively engage on them.”

Buy ETH on BTC Markets.

Uniswap Labs’ fee switch yields US$350k in first week.

Uniswap Labs, the company behind the largest decentralised crypto exchange, Uniswap (UNI), announced last week that they would begin to impose a 0.15% fee on trades involving ETH, USDC and other tokens.

The fees went live on Tuesday 17th October, and have since generated over US$133k for Uniswap Labs, averaging roughly US$60k per day. According to a flash report from Blockworks Research, the fee has the potential to rake in upwards of US$33 million per year, based on year-to-date volume. Only swaps that are executed through Uniswap Labs’ frontend are subject to the fee charge.

Uniswap is the largest decentralised exchange, boasting US$3 billion in total value locked (TVL) and has processed US$1.73 trillion in aggregate lifetime trading volume. Uniswap founder Hayden Adams announced on X (formerly Twitter) that the protocol will be implementing a 0.15% swap fee on their web app and wallet interfaces for the very first time.

The fee is different from Uniswap’s existing “protocol fee”, which is managed by governance voters, and is being imposed by Uniswap Labs to “sustainably fund our operations,” according to a blog post. For now, the fees apply to 11 assets, only when two of those assets are traded in a paired pool, and only if the user is trading on the Uniswap mobile app or web frontend. Swaps from stablecoins to stablecoins are excluded from this initial charge.

Assets subject to the fee include “[ether] ETH, USDC, WETH, USDT, DAI, WBTC, EUR, GUSD, LUSD, EUROC, XSGD,” and both the input and output tokens must be among those subject for the fee to be collected. Most of the fees to date have been generated through transactions on the base layer, Ethereum.

Buy UNI on BTC Markets.

The week ahead: upcoming economic events

October 26th: European Central Bank Interest Rate Decision & Press Conference. United States (US) Durable Goods Order & GDP Growth Rate.

October 27th: US Core PCE Price Index. US Personal Income & Personal Spending.

October 30th: Germany’s Inflation Rate.

October 31st: China’s NBS Manufacturing PMI. Bank of Japan's Interest Rate Decision. France’s GDP Growth Rate & Inflation Rate. Germany’s GDP Growth Rate. Italy’s GDP Growth Rate & Inflation Rate. European Area GDP Growth Rate & Inflation Rate.

November 1st: China’s Caixin Manufacturing PMI.

November 2nd: US ISM Manufacturing PMI. US JOLTs Job Openings. US Fed Interest Rate Decision & Press Conference. Australia’s Balance of Trade.

Economic Calendar (tradingeconomics.com)

Market reflections

Australia

• Aussie inflation rate rose 1.2% in September and 5.4% annually. 
• Uptick in overall employment but fell short of market expectations.
• PMI lowest in 21 months due to drop-in private sector activity.

In September, the monthly Consumer Price Index (CPI) indicator surged by 1.2%, resulting in an annual increase of 5.4%, highlighting the persistent inflationary challenge faced in Australia.

The incoming Reserve Bank of Australia (RBA) governor, Michele Bullock, might be forced to implement a 13th interest rate hike due to the unexpected acceleration of inflation. It's important to mention that this inflation rate remains below the peak of 8.4% recorded in December 2022.

The Composite PMI (the weighted average of manufacturing and service sector PMIs) has hit its lowest point in 21 months, driven by a substantial drop-in private sector activity. This decline was a result of reduced new orders, a weakened demand environment, inflationary pressures, and high-interest rates.

In employment data for September, there was a slight uptick in overall employment, but it fell short of market expectations. Part-time employment witnessed an increase, whereas full-time employment saw a decrease. Concurrently, the participation rate declined from the record high of the previous month. Meanwhile, the underemployment rate also experienced a slight decrease. Additionally, there was 0.4% drop-in monthly hours worked across all job categories.

Global

• Big tech earning season delivers robust sales results for Q3 2023.
• US Fed Chair warns further rate hikes could be on the horizon.
• Japan records a decline in its annual inflation rate for September.
• The German economy sees mixed result as contraction continues.
• UK sees an increase in unemployment, as retails sales fall.

This week, investors’ attention turned to earnings season for major tech companies, including Alphabet, Microsoft, and Snap with all three reporting robust sales results for the third quarter of 2023. These strong results signify a turnaround for these tech giants, following a challenging 2022 that led to cost-cutting measures and layoffs due to reduced spending by advertisers and clients amid macroeconomic concerns.

Last Thursday, Federal Reserve (Fed) Chair Powell delivered a speech at the Economic Club of New York, advising markets that further rate hikes could be on the horizon. He emphasised the Fed's cautious approach, indicating that future policy adjustments will depend on incoming data, the evolving economic outlook, and risk considerations.

He acknowledged that tight monetary policy is exerting downward pressure on economic activity and inflation. However, he cautioned that persistent above-trend growth or a tight labour market could jeopardise progress on inflation and necessitate further monetary tightening.

Powell also noted that inflation remains elevated and achieving a sustainable return to the 2% inflation goal may require a period of subpar growth and some softening in labour market conditions. The Fed maintained the federal funds rate target range at a 22-year high of 5.25%-5.5% during its September meeting.

Across the rest of the globe, Japan recorded a decline in its annual inflation rate for September, marking the lowest reading since September 2022.

Mixed reporting results coming out of Germany this month with the latest preliminary survey revealing that business activity continued to contract for the fourth consecutive month in October. This contraction indicated a renewed decline in economic activity. Whilst the Ifo Business Climate indicator for Germany rose, marking the first increase in six months and exceeding market consensus. It also represented the highest level in the past three months, as companies have grown less pessimistic about their expectations for the coming months.

In the UK, it is anticipated that the Bank of England will maintain interest rates, responding to a rise in unemployment. Official data shows an increase in joblessness, as retail sales fell below market forecasts.

Finally, in its October meeting, the Bank of Canada decided to maintain the overnight rate at 5%, keeping borrowing costs at a 22-year high.

Compliance conversations

Fake news and its impacts on the crypto markets.

Fake news is a growing concern in the digital age, impacting various aspects of our lives, from politics to crypto and beyond. Anyone exposed to digital, you are likely aware of how misinformation can affect crypto markets and investor sentiment. Let’s delve into the issue of fake news, exploring its implications, and provide insights on how to spot it.

The spread of fake news.

In today's interconnected world, information spreads faster than ever. With the advent of social media, online news sources, and blogs, news can reach millions of people within seconds. However, this ease of dissemination has also given rise to the propagation of fake news.

Fake news refers to the dissemination of inaccurate or misleading information, often designed to deceive readers or viewers for various purposes, including personal agendas, financial gain, or simply for the thrill of mischief.

Implications for the crypto and finance world.

Fake news can have dire consequences, particularly in the world of crypto and finance. The rapid spread of fake news can lead to significant market fluctuations. For instance, a fake report about a major government banning cryptocurrencies can trigger panic selling, causing prices to plummet.

Spotting fake news.

Recognising fake news is essential in protecting yourself and your investments from misinformation. Here are some strategies to help you spot fake news:

• Check the source: Always verify the credibility of the source. Legitimate news outlets have a reputation for accuracy and accountability. Be cautious of information from unknown or suspicious websites and social media accounts.
• Cross-reference: Don't rely on a single source. Compare the information across multiple reputable news sources to confirm its authenticity. Genuine news typically appears on multiple credible platforms.
• Watch for biased language: Be wary of articles or reports that use emotional language, exaggerations, or sensationalism. These are often indicators of fake news.
• Check dates: Ensure that the news is current. Old news presented as recent can be misleading.
• Expert opinions: If possible, seek expert opinions and analysis on the subject matter. In the world of crypto and finance, experts can provide valuable insights into the validity of news.
• Use critical thinking: Analyse the content critically. Consider the motivations of the source and whether the information aligns with established facts.
• Consider the visuals: Fake news often includes manipulated images or videos. Be cautious of visuals that seem altered or out of context.

In a world driven by information, fake news poses a significant threat to both personal well-being and financial stability. By following the strategies outlined above, you can protect yourself and your investments from the damaging effects of fake news.

ASIC provides a checklist of common scams and ways to avoid them. To learn more, visit ASIC’s website.

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Disclaimer: The information provided in this email is for general purposes only. It should not be construed as professional financial advice from BTC Markets Pty Ltd. BTC Markets is not a financial adviser, and you should consider seeking independent legal, financial, taxation or other advice to ensure that the information relates to your unique circumstances. BTC Markets is not liable for any loss caused, whether due to negligence or otherwise arising from the use of, or reliance on, the information provided directly or indirectly, by use of this information contained within this email. Past performance is not an indicator of future performance. We note that we may, at any time, change the characteristics of the product. The information provided is intended for recipients in Australia. This information is not to be reproduced without permission.

Prices are accurate as of 11:00 AM AEST, on 26/10/2023.