The US stock market and A-shares are continuously receiving positive news, AI momentum is strong, and the entire Web3 cycle remains in a bull market.
Written by: FMGResearch
Cryptocurrency Market Summary
From September 15 to October 7, BTC experienced a significant surge, rising from around $57,000 to a peak of about $66,000, primarily due to the US government's interest rate cut announcement. Coupled with the strong performance of the AI sector associated with Web3, and the entire Web3 cycle still being in a bull market, off-market funds continue to maintain a bullish sentiment towards cryptocurrencies.
The US stock market is rising, with non-farm employment data significantly exceeding expectations, adding 254,000 jobs (expected 150,000), and the unemployment rate falling to 4.05%. The continued low unemployment claims data brings positive prospects for a market rebound.
In terms of regulation, the US SEC Chairman has maintained a consistent strategy without showing a more restrictive regulatory approach. However, with the US elections approaching, it remains uncertain whether Gary Gensler can continue as SEC Chairman, which brings uncertainty to the future development of the cryptocurrency industry.
I. Market Overview
1.1 FutureMoney Group DePIN Index
The FutureMoney Group DePIN Index is a quality token index constructed by FutureMoney, selecting the 24 most representative DePIN projects. Compared to the last report, the NAV value has slightly increased from 9.07 to 10.12; while the Spot Price has seen a significant increase, attributed to the rapid rise of the TAO token, which surged from around $300 to $600.
1.2 Cryptocurrency Market Data
From September 15 to October 7, stablecoins remained stable at around $159 billion. Additionally, BTC's proportion of the total cryptocurrency market capitalization has also remained stable, with a slight increase compared to early September, currently at 56.57%.
Observing the trend of contract positions from Coinglass, since September 15, the total BTC contract open interest has increased from $30.9 billion to $34 billion. From September 15 to September 25, BTC contract positions experienced the first round of increase, peaking at $35.5 billion, followed by a significant drop starting October 1, falling to $31.8 billion, and then beginning to recover towards the end of the National Day holiday.
The total ETH contract positions followed a similar trend to BTC, starting from $10.3 billion on September 16, rising to $12.5 billion on October 1, and then declining during the National Day holiday. As of now, ETH contract positions stand at $11.5 billion.
Recently, influenced by the initial interest rate cut news, the lack of new narratives in the Web3 environment, and favorable policies in the traditional financial market A-shares, BTC has seen a net outflow of $162 million in spot trading over the past 15 days; contract net outflow was $171 million.
1.3 CPI and Other Data and Market Reactions
There are two relatively positive macro data points:
- Macro: The recent macro data feedback has been quite good. Since late September, the three major US stock indices have repeatedly opened higher, with the Dow Jones index continuing to rise after dipping below 40,000 points on September 11, climbing from 41,153 points to 42,261 points.
As of September 28, the number of initial unemployment claims in the US was 225,000, expected to be 220,000, with the previous value revised to 219,000. This figure is the lowest in the past four months. The actual CPI index for the end of September was reported at 260.28, expected to be 260.33, with the previous value at 259.92.
Analysts at Saxo Bank stated that if Democratic candidate Biden wins, inflation will be pushed higher. Attention should be focused on the new CPI index in mid-October. The US non-farm employment data significantly exceeded expectations, with an increase of 254,000 jobs (expected 150,000), the unemployment rate falling to 4.05%, and average hourly wages remaining strong, raising questions about whether the Federal Reserve's decision to cut rates by 50 basis points last month was wise.
In the cryptocurrency sector: The improvement in traditional market data has had a relatively weak response in the cryptocurrency field, possibly due to the policy-driven rise in US and A-shares and the tense situation in the Middle East leading to the exit of speculative funds. However, there is a noteworthy phenomenon in the US stock market: cryptocurrency concept stocks are leading the gains in the US stock concept sector, with an increase of 5.93%. This reflects that the entire cryptocurrency sector is still viewed positively by major funds. The current overall trend can be seen as a good opportunity for observation and accumulation.
Sectors worth positioning: Whether in the traditional US stock market or the Web3 sector, AI is the strongest narrative. Additionally, blue-chip DeFi based on ETH is gradually gaining attention. Furthermore, the DePIN sector is aligning with the current Consumer logic advocated in Web3. After cooling for about four months, DePIN is showing new momentum.
II. Hot Market News
2.1 Powell: If the economy develops as expected, there will be two more rate cuts this year, totaling 50 basis points
Federal Reserve Chairman Powell spoke about the economic outlook, stating that the Fed is not in a hurry to cut rates quickly, and the rate-cutting process will be gradual "over a period of time," with decisions made based on data. Before the November meeting, there will be two employment reports and one inflation report released, and all factors will be considered in the final rate decision in November. If the economy develops as expected, there will be two more rate cuts this year, totaling 50 basis points.
2.2 The rise of Memecoins begins to spread to Bitcoin
$PUPS $ORDI $SATS, led by $PUPS, Bitcoin Memecoins (inscriptions, runes) are gaining attention again.
2.3 Japan to assess cryptocurrency regulations, potentially paving the way for cryptocurrency ETF launch
Japan plans to evaluate the effectiveness of its cryptocurrency regulations, with this review taking place over the next few months, potentially paving the way for the country to launch cryptocurrency exchange-traded funds (ETFs).
An official from Japan's Financial Services Agency (FSA) stated that the review will assess whether the country's current regulatory approach under the Payment Services Act (PSA) is sufficient. The PSA was originally enacted in 2009, and Japanese lawmakers have amended the PSA multiple times to address changes in the financial services landscape brought about by the emergence of digital currencies.
The legislation recognizes Bitcoin and other cryptocurrencies as legal property. It also requires cryptocurrency exchanges to register and comply with the country's anti-money laundering (AML) and counter-terrorism financing (CFT) regulations.
Meanwhile, Aptos Labs announced the formal acquisition of HashPalette Inc. with the aim of entering the Japanese blockchain market.
2.4 Musk changes Twitter avatar to a personal photo with US election elements
The background features the American flag, and Musk is wearing a "MAKE AMERICA GREAT AGAIN" hat.
III. Regulatory Environment
3.1 This week, the US Congress held its first hearing on Decentralized Finance (DeFi)
SEC Chairman: Reiterates that Bitcoin is not a security, emphasizes that existing laws grant the SEC the authority to regulate cryptocurrencies
Gary Gensler, Chairman of the US Securities and Exchange Commission (SEC), reiterated in an interview that Bitcoin is not a security, and investors can now express their views on Bitcoin through ETF products. Gensler declined to comment on the Bitcoin strategic reserve plan proposed by Trump, citing his responsibilities and the election season. He insisted that existing laws grant the SEC the authority to regulate the cryptocurrency sector and stated that "disliking the rules does not equate to having no rules." Gensler also pointed out that the cryptocurrency industry faces challenges in building trust, as several industry leaders have gone to prison or gone bankrupt. He emphasized that without investor protection and trust, it is difficult for the innovation sector to survive.
This data is sourced from: Coinshare, Coinglass, Coinmarketcap, Sosovalue, X
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