Market Watch
Things to Watch This Week (Sept 15 - Sept 19)
U.S. FOMC Interest Rate Decision (Sept 17)
This week's main focus will be the Federal Reserve interest rate decision, where the question is not whether they will cut by 25bps, which is nearly 100% as of time of writing, but rather if the quarterly dot plot, the snapshot of policymakers' projections for the path of interest rates, indicates the likelihood of 3 cuts for 2025.
Random Musing This Week
Bitcoin Four Year Cycle Theory
In recent times, a theory that has been making the rounds in crypto circles is the idea of the four year cycle, where a pattern has arisen that show the previous two cycles both lasted exactly 1064 days. If the pattern repeats, we're roughly just over one month away from a cycle top on Bitcoin (mid-Oct 2025).
Institutional Era
Much debate has ensued in order to show how the crypto industry is in a different state than during these previous two cycles. Since January 2024, Bitcoin’s volatility, profit-taking patterns, and drawdowns have compressed dramatically, reflecting a shift from retail-driven booms and busts to institutional-grade market behavior. Furthermore, the regulatory environment is vastly different, with near-universal adoption of Bitcoin by nations versus the oppression that the industry faced not that long ago.
Some are also pointing to the fact that other on-chain metrics are not showing signs of exuberance. For example, the Bitcoin MVRV (Market Value to Realized Value), a metric that helps identify when Bitcoin's exchange traded price is above or below "fair value," is not showing the peaks it exhibited in the past market tops. Several other metrics could be pulled to indicate a similar sentiment that Bitcoin price is far from overbought at its current value.
Nevertheless, if we're to believe that the current Bitcoin era is different this time due to the institutional adoption that was lacking from before, we'll still need to see more inflows from these institutions. Spot BTC ETF inflows have resumed in recent times, albeit by a slight amount. We'll want to see more sustained and higher levels of inflows if we're to believe that BTC demand can overcome significant sell pressure should we start to see large levels of profit-taking begin in the next few months from cautious investors.
Recap of Top Stories (Sep 8 – Sep 12)
Interesting
Bo Hines named CEO of Tether's new US arm as company unveils USAT stablecoin
Commentary: Bo Hines, the former Executive Director of the White House Crypto Council under President Donald Trump, has been named as CEO of Tether's newly created U.S. unit, according to an announcement on Friday.
USAT is designed to be a U.S.-regulated, dollar-backed stablecoin and a complement to USDT, which has about $169 billion in circulation. The token will be issued by crypto infrastructure firm Anchorage Digital, while Cantor Fitzgerald will also play a role.
Coinbase seeks court order over SEC’s alleged deletion of Gensler texts
Commentary: Coinbase has asked the federal court to order an "expedited proper search" of Gary Gensler’s deleted text messages, after the Office of Inspector General revealed that the Securities and Exchange Commission had erased a year’s worth of his communications.
In a court filing Thursday submitted through History Associates, Coinbase referenced a Sept. 3 report from the Inspector General, saying that the SEC had "excluded officials’ text messages when processing FOIA requests, even though many qualified as agency records subject to FOIA."
FTX estate redeems $45 million worth of Solana from staking: on-chain data
Commentary: The FTX and Alameda estate has redeemed another tranche of Solana from staking, blockchain analytics provider EmberCN reported. According to on-chain data cited by EmberCN, the bankrupt crypto entities redeemed about 192,000 SOL, worth roughly $44.9 million, from staking positions on Thursday. The latest transfer follows the familiar monthly schedule that has characterized FTX and Alameda's asset liquidation process, said EmberCN.
Avalanche Foundation eyes $1 billion to set up AVAX treasury firms in US
Commentary: Avalanche Foundation, the non-profit group behind the Layer 1 blockchain, is in "advanced discussions" to establish two cryptocurrency treasury companies in the U.S., according to the Financial Times.
The FT report, citing two sources familiar with the matter, stated that the foundation's deal with investors involves launching one crypto treasury company and converting an existing company into a treasury vehicle. Avalanche Foundation reportedly aims to raise $1 billion and is expected to close the deals in coming weeks.
Paxos pitches PayPal, Venmo rails in bid to issue Hyperliquid USDH stablecoin
Commentary: Paxos Labs published an updated version of its proposal to issue Hyperliquid’s upcoming USDH stablecoin amid a competitive bidding process against other stablecoin issuers.
The V2 proposal from Paxos, unveiled Tuesday, outlines a plan to scale the Hyperliquid ecosystem globally. This includes a partnership with PayPal aimed at expanding USDH distribution by integrating the stablecoin into PayPal's checkout and payment channels.
Cboe to list continuous bitcoin and ether futures
Commentary: Cboe Global Markets plans to launch continuous bitcoin and ether futures, the exchange said on Tuesday. Continuous futures are different from traditional futures in that they don’t need frequent rolling. They are instead set up as single contracts that last up to 10 years, which can make it easier when managing positions.
"These contracts will be cash-settled and aligned to real-time spot market prices through daily cash adjustments, using a transparent and replicable funding rate methodology," Cboe said in a statement. They will begin trading Nov. 10, pending regulatory review.
Upcoming Market Events
September 17 - U.S. FOMC Interest Rate Decision
September 23-24 - Korea Blockchain Week
September 26 - CME Expiry
October 1-2 - Token 2049 Singapore