China stimulus hopes power BTC

Hola folks!

The past week was a mixed one for global crypto investors. The crypto markets were volatile due to stronger-than-expected US inflation and renewed hopes of a China stimulus package. 

The crypto market initially reacted negatively to the higher US inflation data and was buoyed by hopes of a Chinese stimulus package that would boost crypto. Today’s newsletter highlights the major developments witnessed by the crypto market in the week gone by. 

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Bitcoin (BTC) started the week on a high note, jumping above $64,500 during Monday’s Asian trading hours. This 3% rise in the past 24 hours was fueled by renewed hopes of a China stimulus package and increased demand for Bitcoin-based assets. 

The BTC rally followed remarks from Chinese Finance Minister Lan Fo’an, who hinted at new measures to support the property sector and potential government borrowing. As a result, Chinese stocks ended the morning session higher, providing additional momentum for the crypto market. Ethereum (ETH) and Solana (SOL) mirrored BTC’s rally, both rising by 3%, while XRP and Binance Coin (BNB) remained flat. Data from CoinGlass revealed that over $100 million in short positions were liquidated, as traders betting against a price increase were caught by surprise.

On the memecoin front, speculative interest surged over the weekend, as discussions of a potential “supercycle” gained traction among traders. Memecoins have been drawing attention amid low volatility in more established sectors like layer-2 solutions and storage, alongside growing skepticism around tokens backed by venture capital, which are increasingly seen as overpriced and risky for retail investors. 

At the same time, US reported stronger-than-expected economic data last week, with both CPI and PPI readings coming in above forecasts. Despite initial confusion, markets concluded that core inflation trends remained stable, pushing US equities to all-time highs and leading to a continued curve-steepening. High-beta stocks and the US dollar also broke out further, as markets priced in an 85% chance of a 25-basis-point rate cut by the Federal Reserve in December.

MicroStrategy’s stock has surged 1,700% since it first began accumulating Bitcoin, far outperforming BTC itself, which has gained roughly 500% over the same period. This outperformance can be attributed to the company’s leveraged strategy and additional cash flows from its software business. 

In other notable developments, Australia's first spot Ether ETF is set to launch on Tuesday, marking a significant move for institutional crypto adoption.

Meme coins like SPX6900 and Neiro have seen explosive four-digit percentage gains, and Solana’s latest meme coin sensation, Retardio, has risen by triple digits. Amid this frenzy, approximately $500 million worth of tokens are set to unlock soon, which could increase market supply and impact prices. 

Adding to the mix, Vitalik Buterin sold another $1.6 million worth of memecoins, a portion of which is being donated to charity—bringing his total donations to $884,000 over the past 10 days. 

Uniswap’s new layer-2 blockchain, Unichain, could also shake things up, potentially generating close to $500 million annually for Uniswap Labs and token holders by capturing fees that would have gone to Ethereum validators. Meanwhile, Ripple made waves in the stablecoin market with the launch of RLUSD, as stablecoin liquidity reached unprecedented levels in September. 

Lastly, the Mt. Gox repayment deadline has been postponed to 2025, allaying fears of immediate selling pressure from the $2.8 billion in Bitcoin still held by the defunct exchange. This delay could help stabilize BTC in the short term, even as the broader crypto market navigates a wave of volatility and speculation.

• BTC $64,607 ⏫ 2.28%

• ETH $2,525 ⏫ 2.79% 

• XRP $0.5388 ⏫ 0.67%

• NEIRO $0.001963 ⏫ 37.08%

(All data here is as of 3.04 p.m., 14 October 2024)

Before we conclude, here’s a quick look at some important news from around the crypto world.

• Ethena Labs, the entity responsible for developing and maintaining USDe, has proposed bringing onboard SOL as part of the synthetic stablecoin’s mix of collateral that forms its treasury. USDe differs from stablecoins such as Tether’s (USDT) or Circle’s (USDC) because it is a synthetic stablecoin and not backed by fiat assets at a 1:1 ratio. Read more here. 

• Proposed on Oct. 5 by Ben Adams, co-founder of Illyriad Games, the new Ethereum improvement proposal (EIP) would reduce slot times from 12 seconds to eight seconds,  allowing the network to process more transactions over time. A new upgrade proposal for Ethereum could improve network throughput by 50%, enhancing its ability to compete with speed-focused blockchains like Solana. Read more here. 

That’s it for now. Thanks for sticking around.

See you later, folks! 👋

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