The price of Bitcoin broke to new annual highs this week, reaching almost $35k amid ongoing enthusiasm surrounding a potential spot Bitcoin ETF. While other cryptoassets also had a strong week, most altcoins failed to keep up with the gains in BTC, resulting in a multi-year high in Bitcoin’s dominance in terms of its market cap vs. the overall crypto market cap. Many a trader was caught off guard by the BTC rally given more than $220 million in short liquidations on Wednesday. Unsurprisingly, Bitcoin mining stocks also rallied but are still far from their YTD highs seen in July. Meanwhile, the weakness is US equities persists as the earnings season entered full swing. Corporate earnings were mixed this week, with tech stocks suffering a two-day selloff in the wake of Alphabet (Google) and Meta earnings reports. Although both companies reported better-than-expected results, investors were concerned about their outlook which resulted in a selloff in both stocks. Similarly, Amazon’s cloud business also underwhelmed but overall, the company’s stock rallied today after it recorded its best quarter since 2021. Both large US automakers GM and Ford were also in the spotlight this week after withdrawing their 2023 guidance against the backdrop of labor strikes and higher potential losses on electronic vehicles. Meanwhile, the Fed’s preferred inflation metric, Personal Consumption Expenditures (PCE), showed US prices continued to cool in September after rising 3.4% yoy in line with expectations. PCE (+3.4% in September) is a critical data point the central bank is likely to consider in the context of its next interest rate decision next week.
This week, BlackRock’s proposed iShares spot bitcoin ETF appeared on a list maintained by the Depository Trust and Clearing Corporation (DTCC) with ticker “IBTC”. While the SEC has yet to approve the ETF, the listing created additional optimism among the traders. Bitcoin also outperformed most altcoins which led to the highest level in Bitcoin’s dominance in the cryptoasset market in more than two years. The ratio of BTC market cap vs. total crypto market cap has increased to 51.5%, according to data by The Block. The enthusiasm in Bitcoin also lead to increased activity in options markets, with crypto derivatives platform Deribit’s open interest at an all-time high and CME bitcoin futures open interest surpassing 100,000 BTC for the first time.
Despite the recent rally, Bitcoin bulls appear unfazed by this week’s price action, with long-term holder supply reaching new ATHs. A significant proportion of Bitcoin supply has now recovered, switching from being held “in-loss” to “in-profit”. The percent of supply in profit jumped by a massive 4.7 million BTC, according to crypto analytics firm Glassnode, equivalent to 24% of the total circulating supply. Conviction among the long-term holder cohort seems unchanged and profit-taking was largely absent. The long-term holders aggregate holdings broke to a new all-time-high of 14.899 million BTC. Likewise, as shown by Glassnode, Bitcoin’s short-term holder (STH) cost basis is also now in the rear view mirror at $28k, putting the average recent investor into an average profit of +20%. Analysts often consider these “cost-basis” models in a similar light to technical levels in that they reflect zones of psychological importance, and thus an area where investor behavior may shift.
Market Overview
The global cryptoasset market capitalization currently amounts to roughly $1.3 trillion – compared with $1.13 trillion last week, with bitcoin accounting for more than 51%. Among the Top 30 cryptoassets by market cap, Chainlink (LINK) outperformed, gaining about 46% over the week. The price of bitcoin (BTC) rose by 14.5% to $33,720 while the price of ether (ETH) increased by 10% to $1,765. The total value locked (TVL) in DeFi is sitting at roughly $42 billion, with Ethereum (excluding Layer 2s) currently accounting for about 54% of TVL.
This Week’s Headlines
- More than 100 US lawmakers, including Elizabeth Warren pen letter to prevent crypto usage by terrorist organizations, citing incorrect WSJ article
- Crypto “not the vast majority” of terrorism funding, says US Treasury Deputy Secretary Wally Adeyomo
- Elliptic says scale of crypto-based terrorism funding is exaggerated
- US Senators set in motion bipartisan proof-of-reserves bill (PROOF Act)
- Crypto-friendly House Majority Whip Tom Emmer dropped out of US House Speaker race on Tuesday despite winning the nomination
- SBF begins his defense against criminal charges,tells jury he didn’t take FTX customer moneybut “a lot of people got hurt”
- BlockFi can begin repaying creditors after emerging from bankruptcy
- US Court confirms Grayscale ruling, says SEC must re-review bid for spot bitcoin ETF
- Grayscale and FTSE Russell launch crypto indices product
- Crypto AUM jump to $31.7 billion, according to benchmark administrator CCData
- dYdX chain officially launches on mainnet as standalone Cosmos Layer 1
- Mastercard teams up with MoonPay for Web3 push
- US judge orders Ryder Ripps and Jeremy Cahen to pay Yuga Labs $1.6 million in damages in “copycat” NFT lawsuit
Notable Deals and Fundraising
- Web3 security firm Blockaid comes out of stealth after raising $33 million in a seed and a Series A round
- Call of Duty-style crypto video game Shrapnel raises $20 million in a round led by Polychain
- Web3 gaming company Forge raises $11 million to unlock rewards for gamers
- Web3 healthcare information platform Rymedi raises $9 million in Series A funding
- Treasury management protocol Aera Protocol raises $8 million in a token sale
- Nocturne Labs raises $6 million in seed funding from Vitalik Buterin, Bain and others to enable private accounts on Ethereum
- Web3 game studio Moonveil Entertainment secures $5.4 million in seed round
- NASD raises $3.3 million seed round for asset issuer chain Noble
- Hong-Kong-based Anboto Labs raises $3 million in funding, launches non-custodial trading platform
- OTC platform STIX raises $2.7 million to improve price discovery and secondary-market liquidity
- Nym Technologies attracts $300 million in crypto fund commitments for privacy infrastructure
