Calm Before The Storm

Hey LinkedIn,

No, you’re not imagining things—it's a quiet market. But you shouldn’t tune out, as it's shaping up to be a volatile period. ??

Can't ignore the obvious

A long list of data points are telling us the same message: there just isn't much interest in crypto at the moment.

It's not worth going through all of these—as they all tell a similar story—so we'll just include Google search volumes for 'bitcoin' and 'cryptocurrency'.

Why Q4 looks rosier

The quietness can be partially explained by seasonality, with August and September often the quietest and least eventful months of the year.

Encouragingly, past market data suggests that the sleepy season is nearing its end, with Q4 by far BTC's best quarter, as per Coinglass, based on the median (+57%) and mean (+89%) averages.

We should expect more altcoin updates, with seven significant conferences happening in the next few months, headlined by Solana Breakpoint next week!

Perhaps most importantly, the U.S. rate easing cycle is coming, with the Fed expected to cut rates for the first time since 2020 next week.

Finally, as we’ve stated before, the coming election cycle could heavily impact crypto.

Traditionally, election cycles have correlated with a crypto rally, regardless of the winning party. But this time feels slightly different, with a Trump win widely seen as extra bullish for crypto.

Although we're trying to keep ourselves in check, considering crypto received zero mentions in this week's presidential debate.

Patience Is The Name Of The Game

As our Head of Research & Content, Matt Willemsen, highlighted last month, the strategy remains clear: survive the rest of Q3 and gear up to thrive in Q4 (and beyond). With brighter days ahead, we're positioning ourselves for some more exciting times ahead.

Bitcoin ETFs suffer longest streak of outflows to date

What happened? $1.2B flowed out of the ETFs over eight trading days ending September 8. The streak ended earlier this week.

Why does it matter to you? Although it might seem negative on the surface, ETF adoption remains “unprecedented,” according to ETF analyst Eric Balchunas, with $17B inflows year to date.

Clash over DeFi in first-ever U.S. Congressional hearing

What happened? Bipartisan support for DeFi was clearly lacking as a subcommittee of the House Financial Services Committee gathered for a 90-minute hearing devoted to DeFi.

Why does it matter to you? The future of DeFi in the U.S. remains unclear. How the U.S. eventually regulates DeFi will almost certainly have a major impact on the sector's growth potential.

Japanese companies continue to step into crypto

What happened? Japan’s largest electricity company, Tokyo Electric Power, has started using excess renewable energy to mine Bitcoin. In the same week, three large Japanese financial institutions—MUFG, SMBC and Mizuho—announced an upcoming trial of a cross-border stablecoin transfer platform.

Why does it matter to you? Crypto continues to be adopted and gain legitimacy in many areas of the world. This latest news from Japan builds on Sony's recent move to build its own Ethereum L2, Soneium. (The tech giant is also preparing to launch a crypto exchange.)

?? On Our Radar: Swift Ongoing Crypto Experiments

Swift, arguably the world's most important and heavily used financial network, continues to test Ethereum, Chainlink and Avalanche infrastructure.

• MPLX, the native token of Metaplex, was purchased by multiple crypto funds, including Pantera Capital and ParaFi Capital.
• TON hit record-high transactions despite the token price falling 30% after the arrest of Telegram co-founder and CEO Pavel Durov.
• Ether.fi launched a “cash card” offering up to 8% cash back on transactions.
• Friend.tech shut down, despite the protocol having made $44M in fees in 1.5 years—most of which came in the opening months.
• Ethereum Name Service integrated with PayPal and Venmo for crypto payments, starting in the U.S.
• EigenLayer plans to distribute 86M more tokens in season 2 of its ‘stake drop’.
• Aave proposed onboarding Coinbase’s wrapped Bitcoin product (cbBTC), which is set to launch in the coming weeks.
• DRIFT, the native token of Drift Protocol, has been accumulated by Solana-focused venture capital firm, Multicoin Capital.
• Coinbase launched cbBTC, available on the Base ecosystem.

Thanks for reading the Weekly Shift.

We hope you've enjoyed it, and look forward to seeing you next week!

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