- Crypto Nutshell
- Posts
- 🥜 The Melt-Up
🥜 The Melt-Up
PLUS: Inflation higher than expected
Today’s edition is brought to you by Polymarket
GM to all you crypto nuts. Crypto Nutshell #459 gettin’ ready to bang… 🧨 🥜
We're the crypto newsletter that's more exhilarating than swinging through the skyscrapers of New York... 🕷️🏙️
What we’ve cooked up for you today…
🏦 Tough times ahead
🫠 The Q4 melt-up
💪 HODLers holding on
💰 And more…
MARKET WATCH ⚖️
Prices as at 2:55am ET
Only the top 20 coins measured by market cap feature in this section
TOUGH TIMES AHEAD 🏦
BREAKING: Bitcoin slips lower alongside stocks after higher-than-expected inflation data
Yo what just happened?
Why did Bitcoin suddenly “crash” below $59,000?
Well there’s a simple answer…
Inflation data.
US September inflation data came in hotter than expected.
CPI rose by 0.2% in September versus forecasts of 0.1%
Year-over-year CPI was higher by 2.4% versus forecasts of 2.3%
Core CPI rose by 0.3% versus forecasts of 0.2%
Year-over-year core CPI was higher by 3.3% versus forecasts of 3.2%
Following this report, the price of Bitcoin (and other stocks) immediately fell.
But why did this worse than expected inflation data cause the price of Bitcoin to fall?
Well, this news basically just lowered the chances that the Fed would cut interest rates by 0.50% again in November.
In fact, it’s got some market analysts wondering if the Fed might even pause rate cuts all together…
Taking a look at the data from CME FedWatch, the chances of a 0.50% rate cut in November have gone to zero.
And the odds of no rate cut have shot up from 0% all the way to 16.7%.
However, a 0.25% rate cut is still the most likely outcome. (83.3% chance)
Offsetting this disappointing CPI data was some weak employment data.
Jobless claims shot higher to 258,000 last week from 225,000 previously.
That’s the highest they’ve been in 14 months, and blew out expectations of 230,000.
(Hurricane Helene likely had a large impact on this data)
As you can see the market finds itself in a tough time:
Will the Fed continue cutting rates?
Is the economy strong or weak?
Who will win the US election?
As we’ve said time & time again: the markets hate uncertainty.
We’re expecting Bitcoin to be range bound until at least the US election is over.
DON’T TRUST THE POLLS, TRUST THE MARKETS 🤑
Prediction markets have taken the crypto world by storm, and one stands above the rest…
Polymarket is the world's largest prediction market and your ultimate source for unbiased, real-time election forecasts. 📰
But what sets Polymarket apart is its accuracy.
Here’s a quick taste of what Polymarket traders have nailed so far:
Biden dropping out of the election
Kamala Harris’ nomination
VP running mates
And countless other real-world events
Need even more proof? Here’s one for you…
When the Fed cut interest rates by 0.50%, 92% of economists had predicted a 0.25% cut. 😢
But 52% of Polymarket traders knew better and got it right. 😃
For data-driven insights you can trust, Polymarket is where the truth comes to light.
*Forecasts available worldwide, trading not available in the U.S. and other restricted jurisdictions.
THE Q4 MELT-UP 🫠
At the end of last year, Matt Hougan predicted Bitcoin would trade above $80,000.
With less than 3 months to go, he still thinks that’s true…
Matt Hougan is the Chief Investment Officer at Bitwise. They currently have the 5th largest Bitcoin ETF.
This week, he broke down 3 things that need to happen before the end of the year for Bitcoin to melt-up to over $80,000.
The good news?
It’s not much.
1. Election: Anything But A Democrat Sweep
Like it or not, the U.S election is a huge deal for crypto.
Most investors assume the election is black & white. Trump = good for crypto, Harris = bad for crypto.
Matt disagrees. For Bitcoin to win, politicians just need to get out of the way:
“To thrive, Bitcoin doesn’t need politicians. It just needs them to get out of the way.”
The Democratic Party has conflicting views on crypto, such as Senator Elizabeth Warren building an “Anti-Crypto Army.”
Although small, this does pose a risk to crypto.
As long as Democrats don’t sweep both houses of Congress & the White House, this risk is neutralised.
PolyMarket currently has odds of a Democratic sweep at 18%.
2. Two More Interest Rate Cuts + More Global Stimulus
The number one reason people want Bitcoin?
You can’t trust the government with money.
When the government prints money & cuts interest rates, the value of the dollar goes down. 📉
This makes the price of Bitcoin go up. 📈
The market still currently expects an additional 50bps in interest rate cuts by the end of the year. (FOMC meetings in November and December)
However, as mentioned at the start of this newsletter further rate cuts aren’t necessarily a 100% guarantee anymore…
(Unfortunately Matt published this report just before the inflation data was released)
The market is also expecting further monetary stimulus from China as well.
“If it gets both, I suspect we will get our Q4 rally. If we don’t, I think the disappointment could weigh on the market.”
The good news?
If we can count on the government for anything, it’s printing more money. 🖨️
3. Crypto: No Major Negative Surprises
The final thing Bitcoin needs to get to $80,000 by the end of the year is no major surprises.
No massive lawsuits. No FTX blow-ups. No more previously locked coins coming onto the market.
“If we can make it through the end of the year without similar shocks, I’d expect new all-time highs and beyond.”
Although less than 3 months remaining, all these events are more likely than not to happen.
Which means we might just get our $80,000+ melt-up… 👀
HODLERS HOLDING ON 💪
Yesterday we took at look at the amount of Ethereum available for sale on exchanges. (Check that out here in case you missed it)
So today, it’s only fair that we do the same for Bitcoin.
As always, here’s how to interpret this metric:
Decreasing exchange balances: Bullish indicator as it signals a shift towards long-term holding 🐂
Increasing exchange balances: Bearish indicator as coins being transferred to exchanges are more likely to be sold 🐻
Currently there is 2,986,012 Bitcoin available for sale on exchanges.
That’s ~15.11% of the entire circulating supply.
However, year-to-date has seen this metric stay somewhat flat, falling by only 2,167 BTC. (~$130.24 million at todays prices)
Interestingly as a percentage there’s actually less Ethereum sitting on exchanges than Bitcoin. (10.31% vs 15.11%)
Regardless, that means that 84.89% of the circulating Bitcoin supply is NOT on an exchange.
And that is MASSIVE. 💪
Long-term holders are still holding on. 😎
CRACKING CRYPTO 🥜
Crypto tops fixed-income on ETF investor wishlist. Crypto is second only to equities and for millennial investors it tops the list, the survey said.
Four Reasons Ether ETFs Have Underperformed. ETH ETFs haven't gained the same traction as BTC ETFs, even seeing net outflows this week. Tom Carreras investigates why.
SEC charges Cumberland DRW with acting as 'unregistered dealer' in crypto transactions. The U.S. Securities and Exchange Commission said Cumberland DRW LLC acted as a dealer without being registered when trading $2 billion of cryptocurrencies.
Ripple files notice for cross-appeal in ongoing SEC clash over XRP. The notice for appeal follows SEC's on filing in Oct. 2.
WHAT WE’RE READING 📚
Want to get even smarter? Check these out.
p.s. all completely FREE (one click subscribe link)
Raremints (link) - Daily crypto news
Bitcoin Breakdown (link) - Twice weekly Bitcoin news
Crypto Pragmatist (link) - Actionable alpha 3x a week
The Hustle (link) - Get Smarter on Business and Tech
Your Next Breakthrough (link) - Personal growth with Mark Manson
The Neuron (link) - AI trends and tools to keep you ahead
CAN YOU CRACK THIS NUT? ✍️
Select your answer below and you’ll be redirected to the results page. (answer explanation can be found after “Meme Corner”)
The data in a blockchain gets stored in ________ . |
MEME CORNER 😂
Because what would the crypto world be without its share of memes?
Trivia Answer: B) Blocks 🥳
In a blockchain, data is stored in a decentralized manner across a network of computers or nodes where blocks are chained together. Each block stores transactions, and when a block is full, a new block is created and linked to the previous one, forming a chain.
GET IN FRONT OF 64,000+ CRYPTO INVESTORS
Advertise with Crypto Nutshell to get your product or brand in front of the crème de la crème of crypto investors. Crypto Nutshell readers are high-income earners who are always looking for unique or interesting offers.
HOW DID WE DO? 🤷
We read every comment submitted in this poll and love to hear what you guys have to say. 😁 (bonus points for suggestions 🍪)
What did you think of today's Newsletter?Don't worry, you won't hurt our feelings... 🥲 |
NUTCASE REVIEW OF THE DAY 🔍
DISCLAIMER: The content of this newsletter is not financial advice. This newsletter is strictly educational and is not investment advice. Please be careful and do your own research.
Reply