HERE we are in Uptober as it’s being called and just possibly things are beginning to stir.
Bitcoin has been as low as $59,000 but has clawed its way back, ending with a nice jump in the last few days to around $68,000 as we speak.
Will it follow through? The consensus was if it got beyond $65,000 then the game was afoot, but my natural caution makes me think there are still too many imponderables and fences to jump for an out-and-out moonshot. But as ever with crypto, and Bitcoin in particular, you never know…
What of the overall crypto market in 2024? Coinbase and Glassnode have produced a very interesting report on what has happened this year. We are all probably aware of it, but I always think seeing it written down and codified sort of makes it real.
Their basic premise is that the crypto market has matured in 2024. I don’t think anyone would argue with that statement, as we now have ETFs and a growing number and value of transactions in the space.
As a result, the market as a whole is both deeper and more accessible. Volatility – the curse of crypto – has also dropped dramatically. Back in 2021, crypto volatility was of the order of 130%. That now stands at around 60%. For comparison the year to date VIX for the USA stands a tad higher than that.
Stablecoins and BTC continue to gobble market share. That isn’t very surprising as using stablecoins to shift cash about is an absolutely standout way to go. Try sending a US bank account $20,000 and see how long it takes and how much it costs. I sent someone this amount yesterday in USDT which cost me $1.99 and took 28 seconds – it’s a no-brainer.
Around $5billion flowed into crypto (ie out of tradfi) in the last quarter and this looks as if it will continue. That alone should have a beneficial effect over time. Of course, it could just as easily go into reverse, and indeed it might.
Despite a better underlying tone, Ethereum has struggled and has lost a lot of ground. It is down around 15% against BTC, and as a result you could be forgiven for thinking it is a spent force, but you would be quite wrong.
Ethereum has long been the “go to” platform for layer-2 applications. Every man and his dog say it’s expensive and rubbish and what have you, but it remains the preferred platform for more than 60% of all layer-2 applications with about 40 other platforms covering the remainder. There is a continuing and burgeoning Ethereum ecosystem which will bolster it in the future.
So if we step away from crypto and think real world, as I said a while ago, crypto needs to find and operate real world uses. My view would be this is starting to happen more and more and institutions are starting to see there is value to be had in crypto which perhaps was not there before.
At the same time the original ethos of crypto is (I think) being eroded, in so far as the ETFs represent mega institutional engagement, which I’m sure in time will swamp the fragmented and unregulated areas of crypto.
Regulatory clarity is starting to make things much simpler both for the individual and the smaller institutional investor and is for sure what will make the difference in time between the mere “boosters” and the serious money men, who have an inbuilt desire to make things work profitably and securely. Good luck for the last quarter!
And, of course, Happy Uptober.
Temple Melville is CEO of The Scotcoin Project CIC
