US equities registered a second consecutive week of gains as major US financial institutions kicked off the earnings season on Friday. Banks such as JPMorgan, Citi and Wells Fargo announced higher-than-expected third quarter profits while smaller US banks continue to experience headwinds. Against the backdrop of the developing conflict in the Middle East, elevated inflation and rising rates, JP Morgan CEO Jamie Dimon said that “his may be the most dangerous time the world has seen in decades.” US inflation remained elevated in September as gas and rents kept prices high. The CPI reading rose by 3.7% for the 12 months ended in September, slightly above consensus expectations for a 3.6% rise. On a monthly basis, prices grew 0.4%. Meanwhile, Fed minutes showed that officials remain divided on future rate rises. Meanwhile, Bitcoin continues to outperform ether and other altcoins, as its market dominance approaches a multi-year high amid the current risk-off sentiment given its perception as “digital gold”. The world’s largest digital asset by market capitalization is up 66% this year, compared with a 32% gain for ether. According to TradingView data, which uses the top 125 coins by market cap, BTC now accounts for almost 51%.
Despite the recent US futures-based ETH ETF approval, investors continue to favor BTC over ETH, in part due to higher futures premiums and the increased probability of a spot bitcoin ETF approval. From a cross-asset perspective, the strong performance versus altcoins cannot belie the fact that BTC registered a loss of 11.1% over the third quarter 2023. Compared to other asset classes, BTC underperformed both equities and most sovereign and corporate bond sectors, with the exception of long-term US Treasuries, which lost roughly 12% over the same timeframe. Nevertheless, given BTC’s strong year-to-date (YTD) gains to the tune of 60%, it continues to far surpass returns for every other asset class. From the perspective of Bitcoin veterans, the cryptoasset is currently following a well-known pattern seen in previous cycles, and there is significant anticipation around the reward halving set to occur in April 2024, as an important price cycle marker.
In Bitcoin ETF news, Reuters reported on Friday that the SEC will not appeal a recent high profile court ruling that found it was wrong to reject an application from Grayscale Investments to convert its GBTC Trust into spot Bitcoin ETF.
Previously, the District of Columbia Court of Appeals in Washington in August ruled that the SEC was wrong to reject Grayscale’s proposed ETF, in a case that has been closely watched by the industry. Well-informed Bloomberg analyst James Seyffart expects a dialogue between the SEC and Grayscale to begin next week.
Market Overview
The global cryptoasset market capitalization currently amounts to roughly $1.09 trillion – compared with $1.13 trillion last week, with bitcoin accounting for more than 48%. Among the Top 30 cryptoassets by market cap, Monero (XMR) outperformed, gaining about 1.4% over the week. The price of bitcoin (BTC) fell by 4.1% to $26,875 while the price of ether (ETH) dropped by 5.8% to $1,547. The total value locked (TVL) in DeFi is sitting at roughly $36.5 billion, with Ethereum (excluding Layer 2s) currently accounting for about 54% of TVL.
This Week’s Headlines
- OpenAI CEO Sam Altman tells Joe Rogan that US government is waging war on crypto
- Real-estate-backed stablecoin Real USD (USDR) depegs and price crashes by 50%
- Paul Tudor Jones says “I like bitcoin and I like gold” amid geopolitical instability
- JPMorgan‘s blockchain-based collateral settlement application goes live in with BlackRock/Barclays trade, Bloomberg reports
- JPMorgan initiates research coverage of Bitcoin miners CleanSpark, Marathon Digital, Riot Platforms and Cipher Mining
- Crypto exchange Bitstamp to end Canadian services in January
- Bitfinex owner iFinex offers to buy back shares worth $150 million, Bloomberg reports
- Ark Invest refiles Bitcoin ETF application, includes more details on custodian
- CoinList launches multi-chain staking fund for US accredited investors
- Social-token platform Stars Arena drained of $2.9 million in AVAX tokens
- Pfizer-backed VitaDAO launches community-funded biotech firm Matrix Biosciences
- Alameda co-head Caroline Ellison testifies in week 2 of the SBF trial
- Amazon Web Services (AWS) and Immutable team up to advance Web3 gaming
Notable Deals and Fundraising
- Crypto prime broker Membrane Labs raises $20 million from Brevan Howard, Point72, Jane Street and others
- Tokenized RWA platform untangled raises $13.5 million in a round led by Fasanara Capital
- Account Labs raises $7 million for Google account wallets
- Crypto-powered fantasy horse racing project Game of Silks raises $5 million
- Crypto on-chain analytics firm Parsec raises $4 million in a seed extension funding round
- L1 project Initia receives a pre-seed investment from Binance Labs
