Weekly News Digest for Sep 28 - Oct 3
Market Update
The crypto markets experienced mixed price action this week. Bitcoin hit a peak of $66K on the back of cooling inflation data and interest rate cuts, but volatility ensued with the anticipation of a major options expiry and Middle East geopolitical tensions, dropping its price to $60,246 and causing significant liquidations. Ethereum held around $2,630, consolidating amid market uncertainty. Meme coins such as SHIB and MOODENG saw substantial gains initially, with MOODENG’s market cap reaching $305M before a steep correction of 45.6%. New tokens like hamster kombat (HMSTR) faced sharp losses, dropping over 50% from its peak. Despite a dip in the market early in the week, optimism remains high, with predictions of a Bitcoin rally in Q4 and speculation of a $200K peak in the next 18 months.
Top Stories of the Week
BNY Mellon, a major custodian bank, is initiating custody services for bitcoin and ether for exchange-traded product (ETP) clients and is planning a major expansion into the crypto custody market. The bank's approach, reviewed and unopposed by the SEC, allows it to sidestep certain balance-sheet liabilities usually mandated for custodied crypto assets. BNY Mellon is looking to secure further regulatory approvals to scale up its crypto custody services, leveraging its position in the lucrative market for digital asset safekeeping.
The Middle East & North Africa (MENA) region is now a major crypto market participant, ranking seventh globally with $338.7 billion in cryptocurrency transactions. Türkiye, with its high engagement and stablecoin usage due to inflation, leads the region, followed by the UAE, which has a thriving ecosystem and forward-thinking regulations. Meanwhile, Saudi Arabia and Qatar are rapidly growing markets with increases spurred by blockchain advancements and evolving regulatory landscapes, signaling MENA's rising influence in the global crypto economy.
Bitcoin is entering a traditionally positive performance season, but increased demand is necessary for further growth. Spot exchange-traded funds in the U.S. have shown signs of rising demand by absorbing BTC, which may propel prices up in the last quarter of 2024. Cryptoquant suggests that if the demand recovers, bitcoin could potentially reach targets between $85,000 and $100,000 by the end of 2024.
Visa has launched the Visa Tokenized Asset Platform (VTAP) to facilitate the issuance of fiat-backed tokens on the Ethereum blockchain for banks. VTAP aims to digitize and streamline the trading of tangible assets like commodities and bonds via smart contracts. Spain's BBVA bank is set to pilot this platform in a live environment in 2025.
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U.S. spot bitcoin ETFs attracted $105.84 million in inflows, with Blackrock's IBIT taking the lead, while Fidelity's FBTC and Ark Invest's ARKB saw significant dips. Spot ether funds also saw an influx, adding $43.23 million, where Grayscale's Mini Ether Trust gained the most at $26.63 million. Despite this, ethereum ETFs have experienced total net outflows of $580.94 million since July 23, with the nine funds holding $7.03 billion in ether, representing about 2.26% of its total market cap.
Turkey has abandoned its plans to implement a new tax on stock market and cryptocurrency gains, as confirmed by Vice President Cevdet Yilmaz, who stated that the government will instead prioritize reducing tax exemptions to focus on economic reform. The decision to drop the proposed tax comes amidst ongoing efforts to stabilize the country's economy and combat a high inflation rate of 52%. These measures are part of a broader strategy that includes recalibrating public finances and a potential future lift of offshore swap regulations based on market conditions.
Blackrock, the world's largest asset manager, has accumulated 363,626.36 bitcoin, valued at over $24 billion, which approaches 2% of bitcoin's total supply, through its ETF, IBIT. Since its launch in January 2024, the fund has reached $21.3 billion in net inflows, despite slight discrepancies between reported and onchain bitcoin amounts. Blackrock has expanded its presence in the digital asset space with significant ether holdings in its ETHA ETF and a substantial role in the tokenized U.S. Treasury project, BUIDL.
The meme coin market has shown a resurgence, with Shiba Inu (SHIB) leading the charge with a 20% increase in price and $1.3 billion in spot trading volume, while Brett (BRETT) and Pepe (PEPE) have also seen substantial gains of 15% and 18% respectively. SHIB's momentum is partly attributed to a massive burn rate increase, removing nearly 2 billion tokens from circulation, while the meme coin market as a whole has grown by $10 billion in the past week. Additionally, a new player, Pepe Unchained (PEPU), is poised to enter the market upon the completion of its successful $15.5 million presale, promising a faster and more efficient blockchain experience.
Albert Castellana, CEO of Yeager.ai , advocates for decentralized AI as a means to integrate subjective decision-making into blockchain applications, reducing bias and manipulation risks. He differentiates between centralized AI, which tends to be opaque and prone to singular biases, and decentralized AI, which involves multiple models to democratize decision-making. Castellana stresses that while decentralized AI may currently be slower than centralized systems, its benefits in transparency, security, and reliability make it crucial for the future of autonomous applications and for regaining control over personal data.
Suze Orman, a financial advisor, recommends that "everybody should absolutely have exposure to bitcoin," despite its volatility and the contrary opinions of other investors such as Dave Ramsey and Warren Buffett. She believes the value of bitcoin will appreciate due to the interest from younger generations and its potential for significant returns, though she warns against investing more than 5% of one's portfolio in it. Orman suggests using bitcoin exchange-traded funds (ETFs) for added security and ease of management when compared to direct ownership of BTC.