Strengths
- Of the cryptocurrencies tracked by CoinMarketCap, the best performer for the week was Zcash, rising 149.58%.
- Bitcoin rose to $120,000 for the first time since setting a record high seven weeks ago as speculation increases that the U.S. government shutdown will drive investors to safe-haven assets. Bitcoin’s historical outperformance in the month of October, which has earned the nickname “Uptober,” is adding to the bullish sentiment with the token having gained in nine of the past 10 Octobers.
- Rothschild & Co. Redburn analyst raised the recommendation on Coinbase Global to buy from neutral. The price target is set to $417, which implies a 12% increase from Thursday’s close.
Weaknesses
- Of the cryptocurrencies tracked by CoinMarketCap, the worst performing for the week was DoubleZero, down 19.92%.
- Bitcoin’s attempt to reclaim its record high looks fragile and easily susceptible to a selloff in a stretched stock market. The cryptocurrency climbed above $120,000 for the first time since August, bringing it within 4% of its all-time high of $124,514.
- New York lawmakers propose taxing crypto miners based on their electricity usage. The bill suggest that the crypto miners’ taxes will be funneled to the state’s Energy Affordability programs that cut energy costs for low and moderate income New Yorkers.
Opportunities
- The tokenization of assets is set to rewire financial services, according to Robinhood’s CEO. Tokenization will expand the addressable market from low-single-digit trillions to tens of trillion of dollars. Proponents of tokenization believe it has the potential to widen access to illiquid assets while cutting fees.
- Nomura Holdings plans to expand in Japan’s digital-asset market through a subsidiary, as crypto trading in the country heats up. The subsidiary, Laser Digital Holdings is preparing to apply for a license to offer crypto trading services for institutional clines in Japan.
- Cryptocurrencies are looking forward to a strong October on seasonal trends, IPOs, a wave of fund inflows, Trump family backing and regulatory catalysts. Buzz over “Uptober” where Bitcoin averaged 23% gain in October in the past decade is building amid rising deal flow.
Threats
- Regulators from Alabama to Montana are warning that crypto market-structure legislation currently before Congress could diminish their ability to pursue wrongdoers. The draft of the Senate’s market-structure bill doesn’t give state agencies implicit authority to supervise crypto companies and changes the definition of what an investment contract.
- Abu Dhabi’s Agriculture and Food Safety Authority has reaffirmed a ban on cryptocurrency mining across farms in the emirate, warning that violators face stiff penalties and disconnection from government services.
- The European Systemic Risk Board (ESRB) has passed a recommendation to ban multi-issuance stablecoins, which are stablecoins issued jointly in the bloc and other jurisdictions. The proposed ban was championed by the European Central Bank, and the ESRB guidance will pressure the region’s authorities to implement the restrictions or explain how financial stability can be preserved in their absence.
