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GM to all you crypto nuts. Crypto Nutshell #450 duckin’ for cover…  🪖🥜

We're the crypto newsletter that's more nostalgic than toys coming to life when you’re not looking... 🧸🚀

What we’ve cooked up for you today…

• 🤔 Uptober cancelled?

• 🤷 Bitcoin or gold?

• 📈 Still a long way to go

• 💰 And more…

MARKET WATCH ⚖️

Only the top 20 coins measured by market cap feature in this section

UPTOBER CANCELLED? 🤔

BREAKING: Middle East tension causes huge crypto market shakeup, $489 million liquidated

Well that wasn’t the start to “Uptober” we were expecting…

Bitcoin fell during US trading hours as headlines of escalating tensions in the Middle East caused investors to dump risk assets.

At the time of writing, Bitcoin is down ~3.45% and sitting around the $61,000 mark.

It wasn’t just Bitcoin and crypto that felt the effects.

The S&P 500 also fell ~1.16% on the day.

But we’ve been here before.

If you can remember back to April of this year, this exact same situation occurred:

And again in August:

Both times, Bitcoin bounced back.

Last week BlackRock released a research report on Bitcoin. (Checkout our breakdown of it here)

And in that research report, BlackRock highlighted Bitcoin’s response to major geopolitical events.

BlackRock found that Bitcoin often recovers back to its prior level within days or weeks. And in many cases it rallies even further.

But that’s a getting a little ahead of ourselves…

So far this “crash” (if you can even call it that?) has only seen Bitcoin fall by ~3.45%.

And it’s also worth pointing out that Bitcoin is holding up impressively well.

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BITCOIN OR GOLD? 🤷

The FED is cutting interest rates. China is blasting stimulus. The potential of World War 3 is brewing.

This means one thing is for sure: The dollar is cooked. 👨‍🍳

Investors are looking to hedge against currency risk. Historically, that hedge has been gold.

But now, there’s a new kid on the block: Bitcoin.

Which is better?

That’s what Matt Hougan answered in his latest update.

Matt Hougan is the Chief Investment Officer at Bitwise.

With global tensions high, he broke down Bitcoin vs. Gold.

At their core, Bitcoin and gold are fundamentally similar. They are both forms of money, outside of governmental control.

You can’t print more gold and you can’t change Bitcoin’s 21 million supply cap.

However, Hougan argues they play a different role in investors portfolio. It comes down to a simple decision, which would you prefer:

More returns for essentially the same risk?

or

Same returns for less risk?

Hougan demonstrated this with two seperate portfolios simulated over the last 10 years.

The first, with a Bitcoin allocation:

As you can see in the ‘Since Inception’ column, as your Bitcoin allocation increases, your returns dramatically increase.

Now, look at the ‘Standard Deviation’, it barely rises.

The conclusion:

By allocating to Bitcoin, you get more returns for essentially the same risk.

Compare this with a gold allocation:

As you can see in the ‘Since Inception’ column, as you increase gold allocation, your returns remain pretty much the same.

Now, look at ‘Standard Deviation’, this decreases as you add in more gold.

This means, by allocating to gold, your returns stay the same, but risk decreases.

So which is better?

Depends what you want.

If you want more more returns for essentially the same risk? Bitcoin.

If you want the same returns, but less risk? Gold.

Neither answer is right or wrong, but to Matt, the better choice is obvious:

We agree with Matt.

We’d choose more returns for the same risk everyday of the week. 🚀

STILL A LONG WAY TO GO 📈

How about a quick dose of hopium to close out todays newsletter?

The chart below was posted to X by Julien Bittel, Head of Macro Research at Global Macro Investor (GMI).

And it’s a simple one…

This metric spikes when Bitcoin reaches a cycle top. (it’s that easy!)

And its track record is seriously impressive…

Just look how well those spikes align with Bitcoin’s prior cycle tops. (it’s almost perfect?)

Right now, this metric is nowhere near that of previous tops.

Meaning we’ve still got a long way to go.

But if you’re like us, you’re probably wondering how this metric is calculated.

What data is it pulling from?

Well, unfortunately we don’t have the answer to that question for you today.

This metric is locked behind a $20,000 per year subscription…

So there’s a bit of “trust” involved when taking a look at this metric from Julian.

But regardless, it’s still an extremely interesting indicator.

And we’re all hoping he’s right…

CRACKING CRYPTO 🥜

Bitwise registers XRP ETF trust filing in Delaware. Bitwise filed for a XRP trust on Sept. 30, following Grayscale launching its own trust and Ripple win in court on August.

Crypto exchange Gemini to close all customer accounts in Canada. The US-based crypto exchange told Canadian users they have 90 days to withdraw funds before it closes all customer accounts on Dec. 31.

EigenLayer's EIGEN Token Slides 12% After Debuting at $6.51B FDV. The token initially rose to $4.26 but has since fallen back to $3.77.

Crypto faces 'hangover' from venture capital 'glut' during previous bull market: Multicoin's Tushar Jain. Multicoin Capital Managing Partner Tushar Jain said many crypto startups were overvalued by venture capitalists during the bull market.

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”)

MEME CORNER 😂

Because what would the crypto world be without its share of memes?

Trivia Answer: A) 10,000 🥳

On May 22, 2010, Laszlo Hanyecz paid 10,000 Bitcoin for two Papa Johns pizzas in what is largely considered to be the first purchase ever made with BTC.

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HOW DID WE DO? 🤷

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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.

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