Inside crypto’s autumn rally
After October’s marketwide rally, is crypto winter finally thawing? [Robin Mathlener via Unsplash]
There’s never a dull moment on the blockchain. Here’s what you need to know this week:
Could crypto winter finally be over? With BTC, altcoins, and even NFTs getting boosts, “Uptober” lived up to its billing.
What young Americans think about crypto. Coinbase’s latest State of Crypto report examined how Gen Z and Millennials experience the financial system.
This week in numbers. The renewed popularity of Bitcoin’s Wikipedia page, the value of crypto transactions in North America, and more stats from the week.
AN UPTOBER TO REMEMBER
Crypto markets are rallying — here’s what analysts think might happen next
Last week, bitcoin broke the $35,000 level for the first time in 18 months, and prices have mostly remained above $34,000 since. At the same time, a variety of altcoins, decentralized finance (DeFi) platforms, and even NFTs have also surged.
All of which has left traders with one big question: Is “crypto winter” over, or is this just a temporary swing? Let’s dig into the data. (As always, keep in mind that past performance doesn’t indicate future returns.)
Analysts see signs that bitcoin’s bull phase might have room to grow.
With bitcoin climbing around 30% this month, analysts are pointing to technical indicators that show the cryptocurrency might continue trending upward.
Additionally, there are signs that BTC whales are making moves, with onchain transactions of $100,000 or more rising to the highest level of the year, with 23,400 happening just last week. These transactions appear to be driven in part by optimism over the approval of a “spot” bitcoin ETF, which according to a new report from financial services firm Cantor Fitzgerald is bitcoin’s “most important short term catalyst.”
In theory, geopolitical instability and high global interest rates are narratives that crypto was built to address. And, indeed, while crypto has risen in the past month, the S&P 500 has fallen 3%, with crypto markets increasingly decoupling from traditional markets.
Crypto trading volumes hit highs last seen in March.
After months of historically low volatility, trading volumes for the broader crypto market are beginning to rise again, with volumes on centralized exchanges reaching $24 billion over the weekend — the highest daily trading volume since March 27, and more than twice as high as two weekends prior.
DeFi platforms are also beginning to rise, with transaction volumes hitting their highest point since March. The total value locked (TVL) in DeFi protocols grew by $7 billion (to $42 billion) in the past two weeks — which is especially notable given that DeFi’s TVL had just hit a multiyear low in October.
Solana, Chainlink, and Avalanche have all seen strong gains alongside Bitcoin’s rally.
Solana, which sank as low as $8 last year in the wake of the FTX collapse, rose more than 20% last week and briefly crossed the $35 mark. Web3 services protocol Chainlink recently passed $11.50 for the first time in 16 months and clocked a gain of over 60% last week. And “layer 1” Ethereum alternative Avalanche gained nearly 15% last week and is up 25% in the past month overall.
The bottom line…
The month of “Uptober” lived up to its billing, with a number of tokens roaring back to life after months of dormancy.
And while nobody can predict the future, some market watchers are more optimistic than they’ve been in a long time — and not just because of the potential for Wall Street to get a spot BTC ETF approved.
Bitcoin’s next halving — in which BTC’s miner reward is cut in half to help make the original cryptocurrency resistant to inflation — is currently expected in April. As a recent Morgan Stanley report notes, “Historically, most of bitcoin’s gains come directly after a ‘halving’ event that occurs every four years.”
STATE OF CRYPTO
Why young Americans are optimistic about crypto
Last week, Coinbase released its latest State of Crypto report, “To Update the Dream, Update the System.” The report — which examined how Gen Z and Millennial Americans experience the current financial system and where they see shortcomings — found that younger generations view crypto as an important tool to help them take more control of their finances.
Labels like “lazy generation” miss the point, the report concludes: Instead of following conventional paths, younger Americans say they’re “adopting new, flexible models of work, ownership, and finance that don’t rely on legacy middlemen.” What does this outlook mean for Millennial and Gen Z views on crypto? Let’s dive into some of the key points that Coinbase’s research uncovered.
Both Gen Z (ages 18—25) and Millennial (26—40) Americans are disillusioned with the traditional finance system, with only 7% saying the financial system works very well for people like them.
38% of young Americans say crypto and blockchain can increase economic opportunities for them in ways traditional finance can’t, versus 26% of older people.
31% of Millennials and Gen Z own crypto, versus just 12% of Baby Boomers and Gen X.
About two in five younger Americans (39%) say politicians should support technologies like cryptocurrency and blockchain to help future generations, versus 28% of older Americans.
The bottom line…
Young people are taking their futures into their own hands and building new paths to prosperity, and crypto plays an important role.
Meanwhile, their views are likely to shape American politics in the years ahead. Gen Z and Millennials account for 40% of the US voting-age population today, and are on their way to becoming a majority by 2028. Already, more than half of them (51%) say they’re likely to throw their weight behind crypto-friendly candidates in 2024.
NUMBERS TO KNOW
$1.2 trillion
Value of crypto transactions in North America between July 2022 and June 2023, accounting for 24.4% of global activity during that period, according to a new Chainalysis report. “North America’s crypto market is more driven by institutional activity than any other region’s with a whopping 76.9% of transaction volume driven by transfers of $1 million or more,” the report notes.
13,490
Number of views Bitcoin’s Wikipedia page received on October 24 — the most traffic since mid-2022. “Bitcoin's recent rally and the potential for a spot ETF has people more interested in the asset,” reports The Block. “The newfound interest can be shown in more casual ways, like more people visiting Bitcoin's Wikipedia page."
15
Age, as of October 31, of Satoshi Nakamoto's Bitcoin whitepaper, which outlines the core mechanics of the cryptocurrency. Next up, Bitcoin will celebrate the 15th anniversary of the first transaction ever recorded on the network on January 3. The message inscribed in the “Genesis Block” referenced a newspaper headline about the Great Recession, a key factor in Bitcoin’s creation: “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.”
TOKEN TRIVIA
How often is Bitcoin’s blockchain updated with new transactions?
A
Every 10 minutes
B
Every 60 minutes
C
Once per day
D
Twice per day
Find the answer below.
Trivia Answer
A
Every 10 minutes
