“We are all part of a bigger game, and Bitcoin is one of the strongest levers in that. The systems that we are influencing, that we are exerting leverage on, [such as] payments and finance, will shape what the world of tomorrow looks like.“ – Edward Snowden
Biweekly News Roundup
Cryptocurrency traders suffered over $100M of losses from liquidations during the Oct. 9 market rout as digital asset prices tumbled amid an escalating Hamas-Israel conflict dampens investor confidence. This was the largest amount of long liquidations in a day since Sept. 11. The Blockchain Association said that the uncertainty surrounding the House Speaker along with the criminal trial of SBF and the war between Israel and Hamas could push bills like stablecoins to November or December. Hedge fund billionaire giant Paul Tudor Jones said, “As interest costs go up in the United States, you get in this vicious circle, where higher interest rates cause higher funding costs, cause higher debt issuance, which cause further bond liquidation, which cause higher rates, which put us in an untenable fiscal position.” However, the SEC scrapped its rejection of Grayscale’s spot bitcoin ETF application and dropped charges against Ripple leaders. BTC crossed the $30K mark during the morning hours on Oct. 20, extending its weekly gains to over 11%, with ether crossing the $1,600 mark. Tokens formed by the forking of Bitcoin, BCH and BSV jumped as much as 26% to lead gains among alternative tokens in a sign of possible irrational exuberance.
With digital asset recap Q3 2023, Bitcoin and Ether outperform the wider market amid regulatory pressure and the promise of ETFs. ProShares launched a new short Ethereum Futures ETF on Oct. 16. JPMorgan reported that the SEC is likely to approve spot Bitcoin ETF before Jan. 10, which is the final deadline for the Ark 21Shares applications. Matrixport said BTC will rise to as high as $56K if a BlackRock spot bitcoin ETF is approved. Digital asset investment funds witnessed inflows for the second week totaling $78M, the largest inflows since July, according to data from CoinShares. BTC has gained 66% year to date, compared with ether up 32% and SOL up 170%. Onchain data shows that crypto hODLers stash Bitcoin worth $1.35B each month. The total number of BTC held by long-term holders has reached a new all-time high, amounting to 76% of the cryptocurrency’s circulating supply. Bitcoin’s share of the overall crypto market cap hit 51.35%, marking its highest levels since mid-July. It indicates a relative weakness of supply-side pressure in the market and the potential for an exaggerated price rally. Bitcoin’s layer 2 Lightning Network has seen an estimated 1,200% growth in two years, with around 6.6 million routed transactions in August, a significant jump compared with August 2021’s 503,000 transactions. Standard Chartered Bank said that emerging uses for the Ethereum network in gaming and tokenization are among the drivers of what could be a 5X gain in Ether’s price over the next three years.
The Clarity for Payment Stablecoins bill is sensible legislation for technology that could help millions of people, says Circle’s Heath Tarbert, the former chair of CFTC. California Governor signed a crypto licensing bill “The Digital Financial Assets Law” on Oct. 13, set to take effect in July 2025. Following requests from its affluent customers, Ferrari has begun accepting cryptocurrency payments for its high-end sports vehicles in the U.S. and will expand the program to Europe. New European Union rules that let tax authorities share data on individuals’ crypto holdings were formally adopted by the bloc’s finance ministers on Oct. 17 and will enter into force 20 days later.
Digital asset manager 21.co said tokenized real-world assets (RWAs) could grow to a $10T market by 2030 as crypto converges to TradFi. Crypto is undergoing a maturation phase and more traditional institutions will use blockchains and build products on top of them. Crypto is transitioning from frenzy to synergy and through this transition, crypto will increasingly integrate with existing financial software and bring RWAs on-chain via tokenization. Currently, 21.co values the tokenized asset market at roughly $116B, with smart contract network Ethereum hosting nearly $60 billion of these assets, followed by Tron and Solana. Anthony Scaramucci, the founder and managing partner at SkyBridge Capital, said he expected Bitcoin to eventually become a $15T asset over the coming years, calling it “more valuable than gold.” Tesla’s earnings report shows the firm holding onto Bitcoin in Q3 2023. Morgan Stanley Wealth Management said on Oct. 17, “Based on current data, signs indicate that crypto winter may be in the past and that crypto spring is likely on the horizon.”