BTC Breaks Through $68,000 Resistance Level, Nvidia Sets New Historical High, Funds Continue to Flow into the Cryptocurrency Market.
Cryptocurrency Market Summary:
1. Since the National Day, the overall cryptocurrency market has been on the rise. BTC has broken through the $68,000 resistance level, returning to the $70,000 mark and even setting new highs. Based on the previous halving events, BTC tends to reach new highs within 10-15 months after each halving. With the uncertainty surrounding the upcoming US presidential election, there is a high probability of a new round of cryptocurrency market surge after the election.
2. Currently, the data for US CPI and initial jobless claims shows mediocre performance, making it difficult to provide strong support for further interest rate cuts. However, the fundamentals are still positive, and it cannot be ruled out that there may be further downward testing before BTC takes off, leveraging on uncertain market sentiment.
3. Nvidia and the AI sector are driving the surge in US stocks, and the AI concept deserves close attention.
Market Overview:
1.1 FutureMoney Group DePIN Index:
The FutureMoney Group DePIN Index is a high-quality token index constructed by FutureMoney, selecting the most representative 24 DePIN projects. Compared to the previous report, the NAV value has decreased slightly from 10.12 to 9.79. The Spot Price has also declined due to the price correction of DePIN application projects this week, while storage and infrastructure-based DePINs such as Storj and IOTA still have strong upward momentum.
1.2 Cryptocurrency Market Data:
From October 7th to October 16th, stablecoins remained stable at around $159 billion. The proportion of BTC in the total market capitalization of cryptocurrencies has slightly increased to 57.42%.
Observing the trend of position changes in the Coinglass contract, the open positions of BTC contracts across the network have increased since October 7th, from the previous $34 billion to $38.5 billion. In the days after the National Day holiday, the BTC contract positions experienced repeated fluctuations, and with the upward surge of BTC on October 11th, the contract positions began to steadily rise.
The overall open positions of ETH contracts across the network have increased in the past week, from around $11.5 billion on October 7th to around $12.8 billion on October 15th.
Currently, the trend of BTC is in a phase of confidence recovery. With the recent breakthrough of BTC’s interim high, new entrants who have made profits have exited, and the overall improvement of the cryptocurrency fundamentals has led to a net outflow of BTC spot positions to some extent. As of now, BTC spot positions have a net outflow of $167 million, while ETH spot positions have a net inflow of $151 million; BTC contract positions have a net inflow of $2.031 billion, while ETH contract positions have a net inflow of $587 million.
1.3 Judging the Market based on CPI Data and Market Reactions:
1. Macro Perspective: On October 11th, the US Bureau of Labor Statistics announced that the US CPI rose by 2.4% year-on-year in September, slightly lower than the previous value of 2.5% but higher than the expected value of 2.3%, the lowest level since February 2021. In addition to the strong non-farm payrolls report last week, this may intensify the debate within the Federal Reserve on whether to make a small rate cut next month after a substantial rate cut in September or to pause the rate cut.
The number of initial jobless claims increased by 33,000 to 258,000, far exceeding the expected 230,000. This is the highest number of claims since early August 2023. One of the reasons for the increase may be the impact of Hurricane “Helen”, with a significant increase in unemployment claims in Florida and North Carolina, and a surge in claims in storm-affected states such as Tennessee, Virginia, and Kentucky.
2. Cryptocurrency Perspective: In the past week, BTC has shown a short-term bottoming rebound, quickly rebounding from around $59,000 and breaking through the $69,000 resistance level. At the same time, BTC spot ETF liquidity has increased, attracting more institutional investors to enter the market. Overall, while US stocks continue to hit new highs, the increase in global market uncertainty has significantly increased market risk aversion, leading to a flow of funds into BTC as a safe haven asset. Against the backdrop of increasing political and economic uncertainty globally, the cryptocurrency market will continue to be supported by capital inflows, especially with a positive outlook for BTC in the long term, which may test new price highs in the coming months.
3. Sectors Worth Considering: Based on the performance of US stocks on October 14th, driven by technology stocks and chip stocks, the US stock indexes collectively closed higher, with the Dow and S&P hitting new highs. With the overall rise of chip stocks, Nvidia has set a new historical high. Therefore, the AI sector is still the strongest narrative in the current Web3. In addition, the RWA concept closely related to traditional finance is also gaining popularity.
Hot Market News:
2.1 Fed Committee Member Daly: Must Protect Economic Growth, Open to Only One More Interest Rate Cut this Year
FOMC committee member and President of the Federal Reserve Bank of San Francisco, Mary Daly, stated that based on the median estimate released in September, officials still expect the Federal Reserve to further reduce borrowing costs by 50 basis points over the remaining time in 2024. With inflation cooling down, last month’s rate cut was a “course correction” for policy, emphasizing that interest rates are still restrictive. Daly also mentioned last week that she believes the Federal Reserve may cut interest rates one to two more times this year, each time by 25 basis points.
2.2 Carrie Lam: Promoting the Application of Artificial Intelligence in Central Bank Digital Currency and Virtual Asset Trading
Carrie Lam, the Chief Executive of the Hong Kong Special Administrative Region, stated that the government will continue to promote the policy stance and guidelines for the application of artificial intelligence in innovative financial services such as central bank digital currency, mobile payments, virtual banks, virtual insurance, and virtual asset trading.
The measures include: 1) Promoting the application of central bank digital currency in cross-border payments. The Hong Kong Monetary Authority is actively testing and exploring more technical solutions and scenarios related to cross-border trade settlement on various central bank digital currency networks, expanding the participation of public and private institutions. 2) Improving the regulation of virtual assets and transactions. The Financial Services and the Treasury Bureau will complete the second round of consultation on the regulation of off-exchange transactions of virtual assets and submit a virtual licensing system for virtual asset custodial service providers. 3) Promoting the tokenization of real-world assets and the digital currency ecosystem. The Hong Kong Monetary Authority is promoting the Ensemble project.
2.3 A16Z Invests $50,000 in AI Bot GOAT
GOAT is based on the OPUS large language model Truth Terminal, which is trained on data from websites such as Reddit and 4chan, mainly focusing on extreme subculture content. Its purpose is to debate the belief system generated by AI and combine it with meme elements. On July 9th this year, A16Z’s official Twitter interacted with Truth Terminal and made a $50,000 payment to it. As of now, the market value of GOAT tokens has exceeded $300 million, with a 24-hour increase of 133%.
2.4 Trump Family’s Cryptocurrency Project WLFI Token Sales Exceed $10 Million
The WLFI token sales of the Trump family’s cryptocurrency project, World Liberty Financial, have exceeded $10 million, reaching about 3.4% of its $300 million target. WLFI started its sales on October 15th, offering a total of 20 billion tokens. Six hundred and eighty-three thousand two hundred wallets currently hold WLFI, which is lower than the more than 100,000 registered users announced by the project team the day before the token launch.
Regulatory Environment:
TD Bank Fined $3 Billion for Failing to Report Suspicious Cryptocurrency Activities
The Financial Crimes Enforcement Network (FinCEN) of the United States stated that the banking giant TD Bank failed to report suspicious activities of an anonymous customer organization engaged in international cryptocurrency transactions. TD Bank processed over 2,000 transactions from a company named “Customer Group C” in a span of nine months, which was identified as a company “allegedly conducting business in the sales financing and real estate industries.” The organization lied to TD Bank about their international wire activity plans, claiming that their annual sales would not exceed $1 million. In reality, they conducted transactions worth over $1 billion through TD Bank.
As a result, TD Bank has violated the Bank Secrecy Act and faces multiple charges, including money laundering, and has been fined $3 billion.
