In Markets
After a sharp drop on the weekend due to Tether FUD and Israel’s tit-for-tat attack on Iran, Bitcoin has powered its way back to a three-month high above A$106.4K (the US$70K mark) thanks to optimism around the US election and Iran’s disinterest in escalation. The charts saw a Golden Cross, where the 50-day moving average exceeds the 200-day moving average, which often confirms a shift in momentum. At the time of writing, Bitcoin was up 5% for the week, trading at around A$106,049 (US$70,101). Elsewhere, bearish retail sentiment surrounds ETH, with Solana hitting fresh highs against it and ETH/BTC plumbing new lows. However, long-term holders and whales continue to have high conviction in the roadmap, and A$6.1B ETH (US$4B) has been withdrawn from exchanges to HODL in just a few weeks. Ethereum finishes the week down 2% to trade around A$3,878 (US$2,550). Solana gained 7%, with great metrics around usage and volume; XRP lost 3%, Cardano fell 4%, and Shiba Inu was down 1.5%. Dogecoin got a 14% bump this week after being mentioned in Trump’s campaign event, with supporter Elon Musk set to head up the “Department of Government Efficiency” (DOGE) in the Trump administration. The Crypto Fear and Greed Index is at 72, or Greed.
Source: news.com.au
From the IR OTC Desk
With the U.S. presidential election just a week away, it has dominated the national and international conversation, creating a tense atmosphere in both political and financial markets. This election’s significance is heightened by the close race (despite what betting markets suggest, more on that below) and the distinct economic policies each candidate brings, which could impact inflation, trade, and tax policies.
In traditional markets, yield on the 10 year treasury note continues its upward grind, passing above 4.25%. Several factors contribute to this increase, with persistent inflation and high government borrowing exerting upward pressure. Despite some progress in cooling inflation, core price levels remain elevated, keeping the Federal Reserve cautious about future rate cuts. The market is all but convinced we’ll see a 25bp rate cut on the 7th November.
All eyes were on Musk (again) this week, with him taking the stage to discuss a potential role leading a proposed “Department of Government Efficiency” (DOGE) in the U.S. government, an initiative he has championed with Donald Trump’s endorsement. Musk envisions a leaner federal structure by curtailing bureaucratic waste, streamlining operations, and modernising public sector efficiency. Of course this was welcome news for the cryptocurrency DOGE, which appreciated by almost 30% over the last few days.
On the desk, DOGE continues to be of great interest this week, as can be expected when outsized moves happen. USDT continues to sell, and continues to remain well under peg. With Bitcoin peeking over the US$ 70k level, we expect volumes to continue to rise, and eagerly await the outcome of the election.
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In Headlines
Trump’s odds on Polymarket
While opinion polls are essentially 50/50 and within the margin of error, meaning either candidate could win, much of the crypto industry seems convinced of a Trump victory. Polymarket forecasts a 65.9% chance of Donald Trump winning the Presidency, while rival Kalshi has him at 62%. Polymarket hired outside investigators to track down a French man who has reportedly bet more than US$30 million (A$45.6M) on a Trump victory via four linked accounts. It said it found no evidence of market manipulation and that the trader was just “taking a directional position based on personal views of the election.” Meanwhile, the New York Times claims that only US$100 million (A$152M) is currently wagered on the outcome of Polymarket, which is a much lower figure than the US$2.2B (A$3.3B) in volume for the market. The volume is because traders can buy and sell open bets after the odds change. And Robinhood has just announced it is opening up betting on the election to US residents.
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What happens after the election?
Pundits have chimed in with a range of predictions for the post-election period. Tyr Capital CIO Edouard Hindi cautions that a sell-off could occur no matter the result. “Profit-taking could weigh on the price of Bitcoin in the days following the result announcement,” he said. Standard Chartered tips that Bitcoin will fall if Harris wins but will still end 2024 at fresh highs around US$75K (A$114K). If Trump wins, it predicts a 10% rise within a few days, and if Republicans sweep Congress, then it will be US$125K (A$190K) by the end of the year. Meanwhile, Matthew Sigel, head of research at VanEck, told CNBC that Bitcoin may be repeating the pattern of the 2020 election, when it surged 120% between November and the end of the year. “This is a very bullish setup,” Sigel told CNBC. “We saw the exact same pattern in 2020 when Bitcoin lagged with low volatility and once the winner was announced, we had a high vol rally as new buyers came in.”
WSJ reports new probe into Tether
The Wall Street Journal reported that Tether Holdings Ltd is under investigation by prosecutors at the Manhattan US Attorney’s Office for possible violations of money laundering and sanctions rules. Tether wobbled a little off the peg, but CEO Paolo Ardoino said on Saturday that the “WSJ is regurgitating old noise” and that there is “no indication that Tether is under investigation.”
Microsoft to consider Bitcoin buy
Microsoft shareholders will get to vote in December on whether the software giant should look into buying Bitcoin for its reserves. The proposal was made by a think tank called the National Center for Public Policy Research, but the board has already recommended against approving it. Microstrategy’s Michael Saylor offered to help Microsoft CEO Satya Nadella with the decision. “If you want to make the next trillion dollars for $MSFT shareholders, call me,” he said.
AI agents are the next big thing
Thanks to the success of the bizarre AI-shilled memecoin Goatseus Maximus, which surged to a US$600M (A$912M) market cap in a few weeks, everyone is now taking the prospect of AI agents playing a big role in the industry. Virtuals Protocol’s AI agent Luna has even been tipping users crypto to get them to engage with her content. There’s a new service on Base called Based Agents that enables anyone to create an AI agent with a crypto wallet in about three minutes. But buyer beware, as critics point out, that the ‘AI memecoins’ that have emerged recently appear to have humans still firmly in charge.
Michael Saylor backs bank custody for Bitcoin?
Microstrategy chair Michael Saylor upset Bitcoiners this week with his comments in an interview suggesting that instead of self-custody, Bitcoin holders should rely on “too big to fail” banks that are “engineered to be custodians of financial assets.” Ethereum founder Vitalik Buterin called the comments “batshit insane” and argued Saylor was “explicitly arguing for a regulatory capture approach to protecting crypto.” Saylor later clarified his remarks by saying he supports self-custody for those who can manage it and the freedom to choose between it and custodians. Microstrategy stock has gained nearly 250% this year, far outpacing Bitcoin’s 60%.
Bitcoin ETFs outperform
Of the 575 ETFs launched in the US in 2024, six of the top 10 (and 14 of the top 30) by inflows are either Bitcoin or Ether ETFs. The four largest are all Bitcoin ETFs, and between them, they are closing in on amassing a total of 1 million BTC. The Bitcoin ETFs took in another US$997.6M (A$1.52B) last week, while the Ethereum ETFs were again negative by US$24.6M (A$37.4M) due to Grayscale, which has now bled US$3.052B (A$4.064B). ETH ETFs have seen negative daily inflows 61% of the time since launch.
Vietnam enters the race
Vietnam unveiled a National Blockchain Strategy to position itself as a regional blockchain leader by 2030. Led by Deputy Prime Minister Ho Duc Phoc, the strategy prioritises developing a robust blockchain ecosystem, investing in training and education, and promoting blockchain technology across various industries while encouraging international collaboration. The government is also working on new regulations for digital assets to align with international standards, enhance anti-money laundering efforts, and improve its standing with the Financial Action Task Force. This initiative reflects Vietnam’s prominent role in global crypto adoption, currently ranked fifth worldwide.
Until next week, happy trading!
