Iran’s missile attack on Israel last week missed most of its targets, but it did hit Uptober. While there’s been a recovery, expect volatility in the event of a counterattack by Israel. Geopolitical tensions aside, macro conditions aren’t looking too bad, with the US economy gaining 254K jobs, well ahead of expectations of 140K. Interest rates are on their way down, China has begun to inject stimulus into its flagging economy, and the FTX creditor repayment plan has been approved. Bitcoin finishes the week up 1% to trade around A$92,288 (US$62,670), while Ethereum is down 5% to A$3,594 (US$2,415). Altcoins had a mixed week, with Solana, Dogecoin and Cardano all falling by around 4%. The biggest loser, however, was XRP, falling a staggering 12%. This comes as the SEC appeals its lost securities case against XRP’s parent company, Ripple. The Crypto Fear and Greed Index is at 50 or neutral.
From the IR OTC Desk
Bitcoin remains range bound, bouncing between US$ 60k and US$ 65k – a place it’s been in since mid September. The rally we have enjoyed since the Fed first cut rates seems to have abated, and even though the futures market is pricing in an 86% chance of a 25bp cut to the cash rate in November, this is less than expected, and the broader market is down as a result. Why is the fed likely to “only” cut by 25bps? To answer this, we must look at those pesky job numbers that were released this week, showing a strong economy – unemployment down by 0.1% and nonfarm payroll up 254k! This is over 100k more than expected.
In Australia, high interest rates continue to dampen consumer spending, with the likelihood of an interest rate cut in 2024 disappearing before our eyes. Singapore’s tech labour market will take a hit as Samsung lays off staff as part of a wider set of regional layoffs, reflecting weaker performance and the challenges faced by tech companies amid global competition.
In Australia (AEST)
- Nothing of note
In the US (AEST)
- Thursday 5am FOMC minutes
- Thursday 11:30pm CPI data
In NZ (AEST)
- Wednesday 12pm Official cash rate announcement
In China (AEST)
- Nothing of note
For any further information, please feel free to reach out.
In Headlines
Ethereum’s path to enhanced scalability
With Solana nipping at its heels, the Ethereum community has been seriously considering improving the L1. The big argument against increasing bandwidth requirements was the impact on solo stakers and decentralisation. Still, in a thread on the topic, cofounder Vitalik Buterin suggested a compromise of lowering the 32 ETH minimum for staking while temporarily increasing bandwidth requirements. A few days later, a new Ethereum Improvement Proposal was introduced to slash block times from 12 seconds to 8, and the blob limit to 9. Ethereum researcher Justin Drake supported the proposal because it would increase throughput by 50% and make DEXs 1.22x more efficient. Outside of social media bearishness, fundamentals are looking good for ETH, according to a viral Reddit post.
Satoshi revealed?
HBO’s new film Money Electric: The Bitcoin Mystery claims it will reveal Satoshi Nakamoto’s identity tomorrow. Filmmaker Cullen Hoback previously claimed to have identified the people behind QAnon in his series Q: Into the Storm and has promised to “land on a specific name”. Polymarket betting strongly favoured the late cryptographer and privacy advocate Len Sassaman earlier in the week. Still, Bit Gold and smart contract creator Nick Szabo is in front, with Adam Back and Paul Le Roux attracting bets, too. The film screens on HBO around lunchtime tomorrow AEDT.
Join us at the Australian Crypto Convention
Meet us at the Australian Crypto Convention on November 23-24, 2024 in Sydney. It’s going to be an unmissable two-day event, where we’ll talk about all things crypto, discuss the latest trends, network with like-minded crypto enthusiasts, and learn from the industry’ leading voices.
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Polymarket is the election winner
Polymarket’s all-time volume has topped US$2 billion (A$2.96B) after US$486 million (A$719M) was bet in September, mostly on the outcome of the US election. Expect an even higher number this month, with US$161M (A$238M) bet in the first five days. Overnight, a whale placed a huge bet on Donald Trump winning, and his odds surged by 8.6% to take a 54% to 45.4% lead over Democratic candidate Kamala Harris.
SWIFT action on crypto
The global interbank network SWIFT has announced it will run digital asset transaction trials with banks in the US, Europe and Asia next year. Initial use cases will focus on payments, foreign exchange, securities and trade. “For digital assets and currencies to succeed on a global scale, it’s critical that they can seamlessly coexist with traditional forms of money,” said SWIFT chief innovation officer Tom Zschach.
Memecoin Supercycle
All of a sudden, the words ‘Memecoin Supercycle’ are the talk of crypto X thanks to a viral presentation from Murad Mahmudov at Token2049. The concept is that memecoins will lead the next crypto bull market (even though ‘supercycle’ was previously referred to as a mythical, never-ending cycle). Given the difficulty retail traders have making money on VC-backed coins, memecoins are seen by many as a fairer alternative that builds strong communities. “If you don’t make poor people rich or if you don’t make middle-class people richer, you don’t have a community.” Mahmudov said, arguing that “every single listing on Binance” this year is down except memecoin Dogwifhat and memecoin trading platform Jupiter.
SEC appeal undermines XRP ETF chances
The SEC filed an appeal in the Ripple case on the same day that Bitwise filed an application with the SEC for an XRP ETF. However, the two events may not be connected, as the SEC’s deadline to appeal in the case was October 7. In that case, the judge famously declared the XRP token itself was not a security bolstering the chances of ETF approval. However, the appeal over its status may now drag on until early 2026, and analysts say the best hope for an XRP ETF would be for Donald Trump to win the election and disrupt the SEC’s war on crypto. “If Trump wins, we could see other coins as ETFs, in my opinion,” said Eric Balchunas, Bloomberg ETF analyst.
Coinbase leverages Ripple appeal
Coinbase has used the SEC’s appeal in the Ripple case to urge Judge Katherine Polk Failla to allow its interlocutory appeal motion. The exchange, which is being sued over the illegal trading of securities, suggests that having both appeals running at the same time would provide the courts with “…a full account of the legal and practical implications of the SEC’s litigating position.” Interlocutory appeals, which come before the case is even decided, are rarely granted.
FTX repayments to begin
The judge in the FTX bankruptcy case has approved a repayment plan, clearing the way for 98% of creditors to receive at least 118% of the cash value of their claim within 60 days. Up to US$16.5B (A$24.4B) will be distributed. Creditors are being paid back at the time of the collapse, which is much less than the crypto is now worth.
Is Sui the Solana killer?
VanEck’s September report shows strong results for monolithic (all in one) blockchains, with price increases for Solana (14%), Sui (118%) and Aptos (23%). While Solana has been touted as an Ethereum killer, Sui is even more performant and scalable, with some calling it a Solana Killer. It’s based on the Move language developed at Facebook. The blockchain got surprise support from Cardano founder Charles Hoskinson this week, who said the network deserved “great success”. “It’s what Solana should have been,” he said. “I still think Cardano’s approach is superior for a long list of reasons, but Sui has some real innovations.” However, Sui raised a lot of money from VCs and has a high FDV (fully diluted valuation), and three-quarters of the supply is yet to hit markets.
Until next week, happy trading!
