In Markets
After getting a little too carried away with the prospects of victory for pro-crypto Presidential candidate Donald Trump, crypto markets dropped six days in a row as polls remained stuck at 50/50 and prediction market odds tightened. However, Coinshares reports digital asset investment funds took US$2.2 billion (A$3.3B) in inflows over the past week, suggesting institutional confidence, while the Kimchi Premium for Bitcoin is back in South Korea, where it’s trading 2.2% higher than elsewhere. Elsewhere, Iran has suggested it may hit Israel again, which would likely affect crypto markets. “Uptober” lived up to its name, but Bitcoin’s 11% monthly gain was half the historical average. Bitcoin finished the week down 4% from seven days ago to trade around A$103,434 (US$68,382), while Ethereum fell 8% to A$3,653 (US$2,391). Solana dropped 11%, alongside XRP (-4%), Dogecoin (-3%), Cardano (-5%), and Shiba Inu (-7%). The Crypto Fear and Greed Index is at 70, or Greed.
In Headlines
Who will win and what happens to prices?
Polymarket was this week accused of elevated levels of wash trading. However, CoinDesk reports these are likely just traders hoping for an eventual Polymarket token airdrop rather than a manipulation attempt. In the final hours before the poll later today, Polymarket has Trump’s odds of becoming President at 59.4% (a 3.9% surge today) while it tips Democratic candidate Kamala Harris has a 72% chance of winning the popular vote. However, respected pollster Nate Silver’s election model has Trump on just 50.4% to win, and he notes that Harris has been gaining in recent days. If Trump does win, global investment firm Bernstein tips US$80K to US$90K (A$121 to $137K) in the next few weeks, while if Harris wins, Bitcoin could fall as low as US$50K (A$76K). Either way, the firm says Bitcoin will hit a US$200K (A$304K) price by the end of 2025. But Charles Edwards, founder of the Capriole Fund argues prices will likely trade sideways if Harris wins, as it’ll be “more of the same leadership.” In the three elections to date, the poll has set a new Bitcoin price floor.
Pension fund invests in ETH ETFS
The State of Michigan’s Retirement System has become a top five holder of Grayscale’s Ethereum ETF and Mini Trust ETF. It has just tipped US$11 million (A$16.7M) into the Ether ETFs, more than its existing holding of US$7 million (A$10.6M) in Ark’s Bitcoin ETF. “Pretty big win for Ether which could use one,” said Bloomberg ETF Analyst Eric Balchunas on X. Meanwhile Florida’s chief financial officer Jimmy Patronis requested a report on whether the Florida Retirement System should invest in Bitcoin. The state already holds US$800M (A$1.2B) in Bitcoin.
Singapore doubles down on tokenisation
The Monetary Authority of Singapore (MAS) is introducing new measures to advance tokenisation in financial services. The regulator says it is developing market infrastructure and industry frameworks to encourage asset tokenisation. It has already seen “strong interest” in areas such as fixed income, FX, and asset management. Leong Sing Chiong, deputy managing director (Markets and Development), said MAS aims to “scale tokenised markets on an industry-wide basis.”
Bitcoin ETFs going gangbusters
BlackRock’s Bitcoin ETF saw a whopping US$875 million (A$1.33B) inflows in a single day on October 30, the highest recorded since its launch on January 11. It capped 13 straight days of inflows for IBIT. Most of last week’s US$2.22 billion (A$3.37B) inflows into the Bitcoin ETFs flowed into BlackRock’s IBIT. Traders are now speculating that a billion-dollar inflow day may soon come.
MicroStrategy’s 21/21 plan
MicroStrategy has unveiled its 21/21 plan to raise US$42 billion (A$64B) over the next three years to buy more Bitcoin. It will raise US$21 billion (A$32B) in equity and US$21 billion in fixed-income securities. MicroStrategy’s president and CEO, Phong Le, said the firm plans to buy more Bitcoin “in a manner that will allow us to achieve higher BTC Yield.” MicroStrategy reported that its current yield this year to date is “17.8%”, with plans to achieve an annual BTC yield of 6% to 10% between 2025 and 2027.
Immutable hit with Wells Notice
Blockchain gaming platform Immutable has been hit with a Wells Notice by the SEC, indicating it’s likely to be sued over securities violations. Details are scarce, but Immutable believes the agency is targeting the listing and private sales of the IMX token in 2021. “We received this within hours of our first conversation (with the SEC) on a timeline clearly accelerated to land before an election,” Immutable wrote. Other firms hit with a Wells Notice this year include OpenSea, Crypto.com, and Uniswap. Trump promised to fire crypto-hating SEC boss Gary Gensler on day one if he wins. The Blockchain Association estimates the crypto industry spent almost half a billion dollars (US$426M/A$647M) in defensive litigation over 104 cases brought by the SEC against crypto firms between 2021 and 2023.
Outflows from ETH to SOL overstated
Much has been made of outflows of TVL from Ethereum to Solana, but Michael Nadeau, founder of the DeFi Report, argues it’s “not really” happening. While Solana has seen US$2.36 billion (A$3.6B) inflows from Ethereum year to date, around 42% flowed straight back to Ethereum. He says the flow from Ethereum to Solana represented a “modest” 2.7% of Ethereum’s TVL. By contrast, he said the vast majority (83%) of the US$6 billion (A$9.1B) net outflows from Ethereum this year went straight to Ethereum’s Layer 2 chains. And some L2s are starting to catch up with Solana on TPS and costs, with Starknet’s mainnet peaking at 857 transactions per second during a recent gaming stress test. CEO of Starkware Eli Ben-Sasson said: “This is not a narrow story of ‘success on Starknet.’ It’s an illustration that scaling on blockchain is taking big leaps forward, and that the rails are getting ready for mass use.”
Until next week, happy trading!
