Casey Wagner

Bitcoin and ether remained in positive territory on Wednesday afternoon, while altcoins sustained their dominance. Analysts suggest this may signal the onset of a period marked by a heightened appetite for risk.



Polygon (MATIC) and Chainlink (LINK) posted double digit gains Wednesday. Solana, which had previously been leading the rally, slowed to lose around 0.7% over the week. SOL remains up more than 85% over the past 30 days. 



Leverage is up, analysts say, meaning traders are once again borrowing to make their investments. Binance this week launched a Tether earn <a href="https://www.binance.com/en/earn">product</a>, promising lenders 13% annual percentage yields.&nbsp;



<a href="https://blockworks.co/price/gmx">GMX</a> with Arbitrum DAO on Wednesday launched an incentive program that could earn traders as much as 75% in annual yield on tokens such as Ripple (<a href="https://blockworks.co/price/xrp">XRP</a>) and Solana (<a href="https://blockworks.co/price/sol">SOL</a>).&nbsp;



Traders are allocating more to smaller tokens, according to data from CoinShares. Last week, Solana clocked $11 million in inflows and Chainlink raked in $2 million, representing 17% of total assets under management.&nbsp;



For Solana, net buying has been led by Coinbase, with 2.2 million tokens market-purchased between Oct. 18 (the start of the rally) and Nov. 6, according to data from Kaiko. Investors also put money into Polygon and Cardano, which saw increased flows of $800,000 and $500,000, respectively, last week, CoinShares data shows.&nbsp;



Bitcoin continues to attract investors, buoyed by bond yields which have dipped recently but remain high. Noelle Acheson, author of the &#8216;Crypto is Macro Now&#8217; newsletter, <a href="https://blockworks.co/news/bitcoin-price-rally-bond-yields">cites sustained enthusiasm for exchange-traded funds</a> as a contributing factor.



“We can see that the BTC annualized daily basis on Binance is at its highest since the excitement surge of June, <a href="https://blockworks.co/news/blackrock-files-bitcoin-etf">when BlackRock filed its spot BTC ETF proposal</a>,” Acheson said. “It’s also worth looking at the BTC basis, which reflects the premium implicit in futures pricing and can be taken as a gauge of sentiment – a positive basis means traders are feeling optimistic that the price will rise.”&nbsp;



<a href="https://blockworks.co/news/bitcoin-etf-price-rally">ETF optimism could be premature though</a>, and yield-farming hype aside, a lot is still riding on macroeconomic conditions, Craig Erlam, senior analyst at Oanda said. Investors are battling hawkish commentary from central banks around the world, Erlam said, against downbeat economic expectations and speculation around rate cuts next year.



“Even if central banks were of the view that rates could fall next year, it would be unrealistic to expect them to say so at this stage as it would confuse and undermine their message that rates must stay higher for longer,” he added.&nbsp;



Futures markets are still overwhelmingly banking on the Fed holding rates where they are, with CME data pricing a 90% likelihood of a pause at the next policy-setting meeting in December.



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Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



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Bitcoin may be riding the ETF wave, but altcoins are where the rally really is 

Macro and macroeconomic conditions joined forces this week to create what appears to be a perfect storm for bitcoin’s price.&nbsp;



The price of bitcoin surged above $34,000 Tuesday for the first time since May 2022 as US bond yields hit a 16-year high and ongoing optimism about the prospects of a bitcoin ETF continued to grow.&nbsp;



Bitcoin (<a href="https://blockworks.co/price/btc">BTC</a>) rallied nearly 14% in less than 24 hours between Monday and Tuesday, largely fueled, analysts say, by news that a <a href="https://blockworks.co/news/grayscale-sec-gbtc-etf">spot bitcoin ETF may be here soon</a>.&nbsp;



The iShares Bitcoin Trust was listed on the Depository Trust and Clearing Corporation, which clears Nasdaq trades, on Monday, Bloomberg Intelligence ETF analyst Eric Balchunas <a href="https://x.com/EricBalchunas/status/1716529570759704832?s=20'">announced</a>, sending traders into a frenzy. (It has since <a href="https://blockworks.co/news/blackrock-ibtc-bitcoin-etf">been removed</a>.)



Read more: <a href="https://blockworks.co/news/blackrock-ishares-bitcoin-etf">BlackRock takes apparent new step in bitcoin ETF prep</a>



This development, in and of itself, does not mean an ETF is launching. But it was enough to move markets, according to <a href="https://blockworks.co/speaker/noelle-acheson">Noelle Acheson</a>, former head of research at Genesis Trading and author of the Crypto is Macro Now newsletter.



“This doesn’t necessarily mean that the ETF (ticker symbol IBTC) will start trading today, nor that it is imminent,” Acheson said. “But, you know, maybe. The possibility is waking up some investors.”



On the macroeconomic side, rising US bond yields —&nbsp;perhaps counterintuitively —&nbsp;have coincided with bitcoin’s rise.&nbsp;



“In theory, rising yields would be bad for BTC because they signal a tightening of monetary liquidity (which punishes risk assets), they draw funds away from non-yielding assets, and they boost the US dollar which is the denominator of the most-quoted BTC/USD pair,” Acheson said.&nbsp;



Early in the trading session Monday, US bond 10-year yields rose above 5% for the first time since 2007 before falling to around 4.8% Tuesday, coinciding with bitcoin’s rise.&nbsp;



Bond yield moves managed to push stocks higher, too, Tom Essaye, founder of Sevens Report Research noted. The Nasdaq Composite and S&amp;P 500 indexes were trading about 0.8% and 0.7% higher Tuesday, coinciding with the 10-year’s decline.&nbsp;



Global moves — namely the Bank of Japan’s upcoming policy meeting — are also playing into US equity market moves, Essaye said, although its impact on crypto is less notable.&nbsp;



“While a lot of the early rise in the 10-year yield to 5.00% was momentum driven, there was a fundamental reason, too: the Bank of Japan,” Essaye said. “There is ‘chatter’ in the market that the BOJ may increase the limit on the 10-year Japanese Government Bond (JGB) at the meeting later this week.”&nbsp;



Still, crypto investors seem to be concerned about missing out on the rally, according to Acheson, so volatility should be expected.&nbsp;



“Let&#8217;s remember that BTC liquidity is not exactly high these days, so it wouldn’t take much to trigger strong moves,” Acheson added. 



Updated, Oct. 24, 2023 at 13:00 — Added the Blackrock&#8217;s proposed ETF is no longer listed by DTCC.



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Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.

A crypto perfect storm? Bond yields, ETF news collide with bitcoin rally

On this episode of Blockworks&#8217; podcast &#8220;<a href="https://youtu.be/YCYafT9OWOw" target="_blank" rel="noreferrer noopener">On the </a><a href="https://youtu.be/wUPLNh2oGXM" target="_blank" rel="noreferrer noopener">Margin</a>,&#8221; Michael Ippolito, Blockworks&#8217; co-founder, and Jack Farley, video journalist, are joined by Harley Bassman otherwise known as &#8216;The Convexity Maven&#8217;. 



Harley has spent over 35 years working at some of the largest firms including Merrill Lynch, Credit Suisse, PIMCO and now Simplify Asset Management. With an expert understanding of options, volatility &amp; derivatives, we invited Harley for a masterclass on how investors can hedge in this market environment. 



Harley shares his insights into M2 money supply growth&#8217;s effect on inflation, how demographics predict bond yields, what investors outlook should be for the traditional 60/40 portfolio, and using the yield curve to predict recessions.



They also covered: 



<ul class="wp-block-list"><li>How to hedge in this environment</li><li>QE&#8217;s effect</li><li>And so much more</li></ul>



Watch the full episode below! 👇



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<iframe loading="lazy" title="What Rising Inflation Means for Stocks and Bonds | Harley Bassman and Jack Farley" width="1024" height="576" src="https://www.youtube.com/embed/YCYafT9OWOw?feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen></iframe>
</div></figure>



&#8220;On the Margin&#8221; is a two-part show.&nbsp;Once a week, Mike interviews industry experts, and then at the end of the week, he is joined by a co-host where they break down the top crypto and macro stories. Episodes go live every Wednesday and Saturday morning.



Subscribe to On the Margin today on <a href="https://podcasts.apple.com/us/podcast/on-the-margin/id1558223079" target="_blank" rel="noreferrer noopener">Apple</a> or <a href="https://open.spotify.com/show/2yFL2nSsQucf1rzdEKbFZY" target="_blank" rel="noreferrer noopener">Spotify</a>, or watch episodes on <a href="https://youtube.com/playlist?list=PLvER9nHSRN3xVs_p-dl7L7K_ZgL6lSudu" target="_blank" rel="noreferrer noopener">YouTube</a>.



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Get the day’s top crypto news and insights delivered to your inbox every evening.&nbsp;<a target="_blank" href="https://cms.blockworks.co/newsletter/?source=end" rel="noreferrer noopener">Subscribe to Blockworks’ free newsletter</a>&nbsp;now.

Podcast: What Rising Inflation Means for Stocks and Bonds | Harley Bassman, Jack Farley

Today&#8217;s episode of <a href="https://youtu.be/Yhbs2zt-OJY" target="_blank" rel="noreferrer noopener">On the Margin</a> Weekly Roundup with Mike Ippolito and Mark Yusko has a special guest — Blockworks&#8217; own video journalist Jack Farley. 



<meta charset="utf-8">With bond yields plummeting and tech stocks selling off hard, Mike and Jack make sense of the recent bout of market volatility. They also discuss market anomalies such as stay-at-home darlings like Zoom ($ZM) failing to serve as a hedge against bad Covid-19 news, and the tremendous surge in the VIX despite the fact that the S&amp;P 500 is only a few points below its all-time high.



They also talk about yield curve flattening, inflation’s threat to the 60/40 portfolio, and why bitcoin’s dominance might fade over time in the crypto universe.



Watch the full episode below! 👇



<figure class="wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio"><div class="wp-block-embed__wrapper">
<iframe loading="lazy" title="Why Investors Are Running Away From Stocks | Weekly Roundup" width="1024" height="576" src="https://www.youtube.com/embed/Yhbs2zt-OJY?feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen></iframe>
</div></figure>



On the Margin is a two-part show.&nbsp;Once a week, Mike interviews industry experts, and then at the end of the week, he is joined by co-host Mark Yusko where they break down the top crypto and macro stories. Episodes go live every Wednesday and Saturday morning.



Subscribe to On the Margin today on <a href="https://podcasts.apple.com/us/podcast/lyn-alden-explains-connection-between-inflation-bitcoin/id1558223079?i=1000513411286" target="_blank" rel="noreferrer noopener">Apple</a> or <a href="https://spoti.fi/3bTa9uw" target="_blank" rel="noreferrer noopener">Spotify</a>, or watch episodes on <a href="https://youtube.com/playlist?list=PLvER9nHSRN3xVs_p-dl7L7K_ZgL6lSudu" target="_blank" rel="noreferrer noopener">YouTube</a>.



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Get the day’s top crypto news and insights delivered to your inbox every evening.&nbsp;<a target="_blank" href="https://cms.blockworks.co/newsletter/?source=end" rel="noreferrer noopener">Subscribe to Blockworks’ free newsletter</a>&nbsp;now. 



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Bond Yields