Market situation
The cryptocurrency market fell 1.8% in 24 hours to $2.17 trillion, causing a decline in bonds and stocks, due to a decline in investors' risk appetite. However, Bitcoin, which has lower risk among cryptocurrencies, has improved its position compared to the overall market during the same period, and currently accounts for 56.9% of the market capitalization of all currencies, which will increase from April 2021. This is the highest value since March. That share has been largely taken by Ethereum. , which now accounts for 13.5% of the total market, was also last seen three and a half years ago.
Technically, Bitcoin sold above its 200-day moving average, showing bearish strength. However, as the latest risk-off episode has been driven by strong data, there is still a tendency to view this as a short-term correction for now. Although this is a formal reason for the sell-off, strong employment remains a positive factor, with further demand for final consumption and investment expected. So far, the threat to cryptocurrencies is a combination of new price increases and signs of economic downturn. We'll probably find out in economic reports this week and next. However, it is nothing but a risk.
news background
According to CoinShares, investments in crypto funds fell by $147 million last week after three weeks of inflows. Investments in Bitcoin fell by $159 million. Ethereum fell by $29 million while Solana rose by $5 million. Investments in funds that handle multiple crypto assets increased by $29 million, marking the 16th week of inflows. Since June, these products have become popular among investors who prefer investing in a diversified basket of assets rather than individual assets.
After a tough start to last week, the options market is signaling bullish sentiment in the fourth quarter. QCP Capital is optimistic that October will be solid given the expected rate cuts and the correlation between Bitcoin and equities. UBS said China announced a new economic stimulus package of 1.5 trillion to 2 trillion yuan ($213 billion to $285 billion) on October 8-18, with a further 8 trillion yuan ($1.14 trillion) in 2025. It is expected to add an additional $1 billion.
Crypto Insights noted “one of the highest levels of crypto optimism” among investment fund managers this year. The number of funds investing in cryptocurrencies exceeded 1,600.
PwC notes that the UAE has abolished VAT on all cryptocurrency transactions, making digital assets on par with traditional finance (TradFi).
Pavel Durov said Telegram users bought up to 600,000 “rare” gifts in the first few hours of the launch. The developer promises that in the future “rare” gifts will be able to be converted into NFTs on the TON blockchain and traded as tokenized assets.
