Bitcoin and cryptoassets had another strong week, increasing the likelihood of a Q4 rally. BTC reclaimed $66,000 this morning, fueled by large ETF inflows and favorable global macroeconomic conditions, such as lower US inflation. The Fed’s preferred inflation gauge, the personal consumption expenditures (PCE) index, came in slightly below expectations at +2.2% year-on-year for August, signaling cooling price pressures. This bodes well for additional rate cuts in Q4. In Asian markets, Chinese equity indices had their best week in years, buoyed by China’s plans for a large stimulus package. Despite these positive factors, Bitcoin’s price gains remains somewhat subdued compared to altcoins as it inches closer to its all-time high.
As we approach the fourth quarter of 2024, we expect continued growth for Bitcoin and the broader cryptocurrency sector, supported by institutional adoption, more favorable market conditions, and positive political developments. Vice President Kamala Harris recently pledged her support (see below) for the crypto sector during a pitch to donors in New York City, marking a significant embrace of the industry by a major 2024 presidential contender. Meanwhile, former President Donald Trump, who recently visited the Bitcoin-themed bar Pubkey, is gaining traction in the polls, adding further optimism to the political landscape surrounding crypto.
After a period of underperformance, ETH has outperformed BTC since the US Federal Reserve’s 50 basis point rate cut last Wednesday. This momentum coincides with a notable increase in the open interest-weighted perpetual futures funding rate for Ether, indicating growing demand for long positions and increasing optimism among traders about a potential price rise. Meanwhile, US spot Bitcoin ETFs recorded daily net inflows of over $365 million on Thursday, marking the largest inflows since late July and extending the positive streak to six consecutive days. BlackRock’s Bitcoin ETF has also seen remarkable growth, with the asset manager’s Bitcoin holdings increasing to nearly $23.7 billion following recent acquisitions of $35 million worth of Bitcoin and $6.4 million of Ethereum earlier this week.
Market Overview
The global cryptoasset market capitalization currently amounts to roughly $2.43 trillion – up from $2.3 trillion last week, with bitcoin accounting for 53.7%. Among the Top 30 cryptoassets by market cap, Shiba Inu (SHIB) outperformed, gaining about 47% over the week. The price of bitcoin (BTC) rose by 5.2% to $66,200 while the price of ether (ETH) increased by 6.3% to $2,726. The total value locked (TVL) in DeFi is sitting at almost $90 billion, with Ethereum (excluding Layer 2s) accounting for about 56% of TVL. Arbitrum One remains the largest Layer 2 by value locked, accounting for 37.5% of the $39 billion in assets.
This Week’s Headlines
- Kamala Harris says US should become “dominant” in blockchain, reiterates “digital assets” in economic plan
- Former Alameda CEO Caroline Ellison sentenced to two years for her role in the collapse of FTX
- SEC Chair Gary Gensler warns crypto industry “will not long persist” without investor protection
- Gary Gensler grilled over crypto regulation, handling of DEBT Box case in heated congressional hearing
- Ethena plans to launch new stablecoin backed by BlackRock‘s tokenized BUIDL fund
- Guggenheim and blockchain platform Zeconomy issue $20 million of tokenized commercial paper on the Ethereum blockchain
- Robinhood considers a potential stablecoin, Bloomberg reports
- PayPal enables US business accounts to buy, hold and sell crypto
- BNY Mellon moves closer to offering crypto ETF custody services, Bloomberg reports
- SEC postpones decision on BlackRock and Bitwise spot Ethereum ETF options
- Crypto losses due to hacks and scams fall to $413 million in Q3, according to Immunefi
- Tornado Cash co-founder Roman Storm to face trial as US judge rejects dismissal
- Hamster Kombat token goes live for trading with airdrop to 131 million user accounts
Notable Deals and Fundraising
- Celestia Foundation raises $100 million in a round led by Bain Capital Crypto
- Polymarket reportedly seeks $50 million in funding and mulls token amid surging election bets
- Cross-chain wallet protocol Infinex raises $65 million with new Patronage fundraising model
- Layer 1 network and rollup project Initia raises $14 million Series A at a $350 million token valuation
- Solana DePIN Mawari Network raises $10.8 million in new funding
- Decentralized Science (DeSci) project AminoChain raises $7 million is pre-seed and seed financing from a16z and others
- Web3 gaming studio Darkbright raises $6 million to build life sim RPG Smolbound
- Bitfarms and Riot Platforms reach settlement agreement in takeover saga
