Dispatch #215: Bitcoin’s Dream Tandem
Oct 25•4 min read
In this patch of your weekly Dispatch:
- Ethereum’s future 🔮
- Solana’s solid performance 🏅
- Inflation's defeated ❓
Dear Dispatch readers,
You may have stumbled upon a certain publication on X. If you’re still wondering what that's all about, rest assured you needn’t wait much longer. In fact, that new vantage point will be taking over Dispatch pages too. Starting November 5, we’ll be publishing on Tuesdays for a more forward-looking perspective on the week.
The Big Idea
Retail and Institutions Together on Bitcoin?
Let’s address the bad news first. Unfortunately, there has been no Bitcoin breakout this week, despite a promising start that saw BTC nearly touch $70,000. In fact, traders betting on a price rise faced the second-largest day of liquidations in October. However, this news isn't as grim as it seems for Bitcoin.
A Liquidity Hunt: Bitcoin's recent price fluctuations can be attributed to a “liquidity hunt” following its surge to near all-time highs. After breaching $69,000 last week, the market began to flush out leveraged long positions, forcing traders to sell or liquidate as prices reversed, analysts report to the media. This temporary downward pressure is often seen as a healthy correction, clearing speculative excess before the market stabilizes.
Retail and Institutions in Tandem: Both retail and institutional demand for Bitcoin are on the rise, CryptoQuant analysts note. Retail interest gained momentum in October, with on-chain activity from smaller investors increasing by 13% over the past 30 days, nearing levels seen before Bitcoin's all-time high in March 2024. Simultaneously, institutional investors have steadily increased their exposure throughout the year – spot Bitcoin ETFs have surpassed $20B in total net inflows for the first time, following an impressive week of $1.5B in new investments. This dual demand surge signals renewed optimism across both segments.
Looking Ahead: Bernstein analysts predict that Bitcoin could reach $200,000 by the end of 2025, driven by accelerating institutional adoption and the success of spot Bitcoin ETFs. They describe this estimate as "conservative," emphasizing that demand from major institutions and innovative financial products will push Bitcoin to new heights over the next two years.
With only a week left in October, those “uptoberish” vibes may or may not materialize with a new jump above $70,000. That said, Glassnode analysts highlight Bitcoin’s first price momentum since June with many investors returning to unrealized profits.
Holding Bitcoin has always been a Big Idea on these pages.
The Latest In…
Vitalik’s Master Plan (Parts 2 & 3)
Kaiko Research has flagged concerning trends for Ethereum, citing sluggish institutional interest and a widening volume gap compared to Bitcoin. This may have prompted founder Vitalik Buterin to outline future developments.
The Verge aims to enhance accessibility through stateless verification, enabling nodes to run on smaller devices like smartphones and simplifying solo staking.
- The Scourge addresses centralization risks in Ethereum’s proof-of-stake system. Buterin proposed Proposer-Builder Separation (PBS) to reduce 51% attack risks and transaction censorship by distributing block construction tasks among validators, fostering a more secure network.
The Latest In…
The Defeat of Inflation?
After rampant inflation in recent years, are we finally seeing a return to normal? That’s what the International Monetary Fund (IMF) asserts, highlighting that the battle against inflation is nearly won. The IMF projects a decline to 3.5% by the end of 2025, down from a peak of 9.4% in Q3 2022. This improvement is attributed to a resilient global economy, with growth expected to hold steady at 3.2% in 2024 and 2025.
While lower inflation could positively impact risk assets like cryptocurrencies, concerns linger over geopolitical tensions, particularly in the Middle East. The IMF calls for a "policy triple pivot" to manage interest rates, government spending, and productivity reforms while cautioning that the global growth outlook remains at its weakest level in decades.
The Latest In…
Solana: а Star in the Charts
Solana (SOL) has risen 11% in the past week, outpacing the overall crypto market, according to the CoinDesk 20 Index. This surge has pushed SOL to a new all-time high against Ethereum (ETH) and its highest price against Bitcoin (BTC) in over two months. The price rise is fueled by a resurgence of activity in Solana-based meme coins, with transaction fee revenues surpassing $4M per day, notes K33 Research’s David Zimmerman. At the same time, active users have reached over 8M, and open interest in SOL futures exceeds $3.09B.
The Latest In…
Welcome, ApeChain!
ApeCoin DAO has launched ApeChain, a new Ethereum layer-2 network, causing APE token prices to more than double. The mainnet includes decentralized apps and games, like a meme coin launchpad and trading simulator. Built with Arbitrum tech to lower Ethereum fees, ApeChain offers features like easy account creation, gas-sponsored transactions, and cross-chain transfers via LayerZero’s OFT standard. The DAO also allocated $70M for "The Banana Bill" to fund projects and launched a rewards program called "Spotlight."
The Week’s Most Interesting Data Story
A “Euphoric Bull Run” in the Making
Bitcoin (BTC) is gaining momentum, attempting to break through the $69,000 price zone and signaling a potential euphoric bull market. According to Glassnode, Bitcoin has recently surpassed the 200-day and 111-day moving averages, key indicators for investors. The AVIV Ratio remains constructive, suggesting strong profitability and ample room for growth as Bitcoin aims for a sustained rally above its previous all-time high.
Hot Topics
What the Community Is Discussing
Bitcoin whale sightings!
A good ol’ BTC ETF supply shock.
More on inflation…
What to Watch for Next Week:
Bitcoin: another attempt at Mount ATH?
Altcoin season in late 2024?
Macro and crypto: a new reality ahead?