Weekly News Digest for Oct 19-25
Market Update
This past week, the cryptocurrency market displayed a mix of bullish momentum and cautious optimism, particularly for Bitcoin, which neared its $69K resistance level but struggled to break through, closing just shy at $68,998. Bitcoin’s price surge led to significant liquidations of short positions, highlighting robust bullish sentiment. Meanwhile, meme coins like GOAT and APE experienced triple-digit gains, capturing market interest alongside a surge in Bitcoin Ordinal sales by 1,816%, indicating growing diversity in digital collectibles. Ethereum held steady with key support around $2,700, showing a balanced but positive trend. Analysts are split, with some forecasting Bitcoin to surpass $100K due to factors like upcoming elections and institutional adoption, while others see potential for a bearish turn if it fails to hold current support levels. Overall, the week showcased both optimism for long-term gains and cautiousness around near-term resistance barriers.
News of the Week
U.S. spot bitcoin exchange-traded funds (ETFs) experienced substantial inflows, with a collective gain of $294.29 million on a single day, while ether ETFs saw a significant outflow of $20.8 million. Blackrock's IBIT led with an inflow of $329.03 million, contributing to its total of $23.17 billion since January, whereas spot ethereum ETFs, notably Grayscale's ETHE, experienced large outflows. This trend emphasizes a growing investor preference for bitcoin ETFs over ether ETFs, as bitcoin reserves in ETFs amount to $65.34 billion compared to ether's $7.39 billion.
Central banks are likely buying Bitcoin as a hedge against the inflation caused by their own debt-management policies, which aim to devalue fiat currencies. Despite public criticism, Bitcoin's attributes such as being inflation-resistant and sanction-resistant make it appealing to central banks, especially in geopolitically sensitive areas. As the financial system evolves with the rise of cryptocurrencies, central banks may find themselves compelled to adapt by including Bitcoin in their reserves to remain relevant.
Veteran investor Paul Tudor Jones is optimistic about gold and bitcoin as hedges against inflation, with their solid performances validating his stance. He expressed zero interest in fixed income and emphasized commodities are under owned, holding a portion of BTC in his portfolio while highlighting U.S. fiscal weaknesses. Notably, ahead of the 47th U.S. election, Jones' predictions gain particular attention due to his past accurate market trend forecasts and his caution regarding the U.S. economic situation.
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Bitcoin's network hashrate has reached a record-breaking 725.88 exahash per second (EH/s), representing a significant growth of 62.55% over the past year. This increase in computational strength has brought Bitcoin's difficulty close to its all-time high, with an expected 4.36% increase in the next difficulty adjustment. The mining landscape remains competitive with Foundry USA and Antpool leading in hashrate contributions among 60 active mining pools.
Jeff Park, Bitwise's head of alpha strategies, suggests that a Donald Trump victory in the 2024 U.S. election could propel Bitcoin prices towards $92,000, a speculation shared by other analysts and financial institutions. Park's prediction is based on applying merger arbitrage-style probability mathematics, correlating Bitcoin's price with Trump's political standing. The optimism for a significant Bitcoin price increase with a Trump win is also echoed by other Bitwise executives and is contrasted with predictions of lower Bitcoin prices should Harris win instead.
Bitcoin's fee spike has caught attention as onchain transaction fees soared over 354% from $0.81 to $3.61, correlating with the cryptocurrency's price holding steady above $68,000. Despite a queue of 213,015 unconfirmed transfers in the mempool, typical median fees and high-priority transaction costs remain significantly lower than the average. The increase in fees has already resulted in Bitcoin miners earning $27.54 million in October, surpassing September's total onchain fee revenue, which reflects the dynamic interplay of market behaviors such as supply, demand, and miner incentives.
Bitcoin offers an ethical alternative to government-controlled fiat currencies that have historically funded wars, inflated economies, and depleted savings through strategies that undermine democracy and economic stability. Its decentralized nature promotes freedom by enabling transparent, peer-to-peer transactions without central control, aligning with non-aggressive principles and fostering financial autonomy and innovation. Ultimately, separating money from the state, much like the separation of church and state, could lead to enhanced freedom and prosperity by rejecting coercive financial practices and embracing voluntary exchanges.
Ripple's legal chief confirmed that XRP's status as not a security remains unchanged despite the SEC's appeal against the July 2023 court ruling. The SEC is challenging several decisions including that XRP distributions and sales by Ripple executives did not violate securities laws, igniting further legal disputes. Ripple is preparing to file a cross-appeal regarding institutional sales, with both parties bracing for an extended legal battle that could significantly affect cryptocurrency regulation.