Market Summary

Markets continued their strong showing last week with the S&P and Gold both reaching new all-time highs, and BTC nearing the 69k mark. Bitcoin ETFs have seen six straight days of inflows totaling $2.383 billion since October 11th.

On the macro front, Chinese data continues to slow and the initial euphoria around stimulus measures seems to be fading. Following easing measures implemented in September, the PBOC cut benchmark lending rates by 25 bps on Monday. The ECB also met last week, cutting interest rates by another 25 bps to 3.25% as ECB President Christine Lagarde says the disinflationary process is well on track. The press conference alluded to worries over eurozone growth and risks around inflation undershooting the 2% target.

With US elections looming, financial markets are focused on the evolution of election probabilities, and the resulting consequences on the US and global economies. Polymarket odds showed Trump favored to beat out Harris, with a 61% to 39% likelihood at time of writing.

Also, it’s worth highlighting the ECB paper titled The Distributional Consequences of Bitcoin. The authors argue that Bitcoin’s appreciation could be 'fuelling the division of society'.

Crypto in Charts

BTC/USD has reached a critical resistance area over the weekend. We are currently testing the 68/70k level where the trendline off recent highs converges with internal trendline off Q4 ’23 and Q1 ’24 lows. A break above here would be bullish, opening up at least a test of previous highs. Price action since the August drawdown below 50k has been constructive as the market has put in higher highs and higher lows. More broadly, BTC has been contained within the ~50-75k range since March of this year and seems symptomatic of a protracted consolidation period after a decent rally beginning in Nov ‘23.

Source: TradingView

Notable Crypto News

ECB: Bitcoin Appreciation Could Be ‘Fuelling The Division Of Society’

Stripe acquires stablecoin platform Bridge for $1.1 billion in crypto's largest acquisition: TechCrunch founder | The Block

MicroStrategy stock's big premium to bitcoin holdings defended by analyst as ‘intelligent leverage’ | The Block

Bitcoin ETFs, crypto equities and retail sentiment 'scream risk-on,' Bernstein says | The Block

MetaMask and digital identity firm Space ID aim to simplify crypto | The Block

Global crypto investment products add $2.2 billion in weekly inflows amid US election optimism: CoinShares | The Block

The Macro Week Ahead

This week, we have a slew of Fed speakers to watch out for. The Bank of Canada also meets to decide interest rates and ECB President Lagarde makes 3 media appearances. It is worth highlighting Tuesday’s panel discussion about the future of cross-border payments which can be followed live via the following link:  The future of cross-border payments: faster safer together – safe and inclusive fast payments across borders (IMF/WB Annual Meetings in Washington, D.C., USA).

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