Bitcoin Outpaces Gold Amid Market Optimism
Another eventful week on the crypto market this week. After two weeks of uncertainty revolving around the digital assets’ world, investors finally experienced some relief throughout the week, as macro and geopolitical tensions showed signs of easing.
The week began with currencies showing a slight increase in value, as investors began to price in a potential deal between the U.S. and Chinese Governments. President Trump and President Xi are expected to meet next week, which could result in a breakthrough on trade negotiations.
A surprising inflation report came out amidst the government shutdown, with the BLS revealing that inflation in consumer prices rose more slowly than anticipated in September.
Despite some setbacks, most currencies ended the week on a high note. Bitcoin is currently at $113k, up by almost 4% in the last seven days. Heading into the final week of October, optimism is finally returning to cryptocurrencies.
Signs that crypto and gold are operating on a risk-off/risk-on rotation became even more glaring this week. After reaching new all-time highs in the previous weeks, the precious metal was outperformed by Bitcoin this week.
Regulatory Moves of The Week
The Federal Reserve held a crypto conference on October 21, assessing how digital assets can help push innovation as payment providers.
Governor Waller confirmed that the Fed is studying a ‘skinny’ master account to support non-bank financial institutions, including fintechs and crypto firms, in accessing the Federal Reserve’s payment systems
Meanwhile, regulators have their hands full with over one hundred crypto exchange-traded product applications. After the success of Bitcoin and Ethereum ETFs, the market can expect to see over 200 crypto ETPs by 2026.
And finally, one of the most talked-about developments of the week, President Trump pardoned Binance founder Changpeng Zhao, after his conviction for violating U.S. anti-money laundering laws.
Institutional Developments
Institutions continued to ramp up their exposure to digital assets. To kick it off, FalconX, one of the leading crypto prime brokerages in the market, acquired 21Shares in a major deal that signals deeper interest in regulated crypto investment products.
Bitcoin mining firms continue to expand their infrastructure, despite taking a heavy hit to their market value in October. Meanwhile, Vanguard, a historically opposed firm to crypto investing, increased its “BTC exposure by proxy” after buying more MicroStrategy stock.
Finally, JPMorgan is another legacy financial firm that is slowly becoming more crypto-friendly. This week, JPMorgan announced that it will begin to accept Bitcoin and Ethereum as collateral for institutional loans.
While this week didn’t show a strong rally or anything of that matter, it paved the way for a potential shift in investor sentiment for the last part of the year. Next week, the meeting between Trump and Xi — as well as other macroeconomic developments, is promising to set the tone for what could be a pivotal moment in global markets.
