Market Overview

On Thursday, October 17th, the U.S. stock market saw the Dow Jones rise by 0.37%, while the other two major indices remained flat. Stock futures showed slight gains, particularly for Nasdaq Futures. Gold and oil prices also ticked up to around 2,725 USD/ounce and 71 USD/barrel, respectively.

Bitcoin held steady at around 68,000 USD. Despite some altcoins seeing a slight dip, BTC maintained its position, and the total cryptocurrency market capitalization reached 2.434 trillion USD.

The European Central Bank (ECB) cut interest rates by 0.25% for the third time this year, signaling that central banks globally are moving towards reducing rates after a period of aggressive hikes aimed at curbing inflation.

A recent filing by the SEC revealed that Morgan Stanley now holds 272.1 million USD worth of Bitcoin ETFs. More updates are expected soon regarding other companies holding BTC ETF stakes exceeding 100 million USD.

Thursday also marked another strong day for U.S. BTC spot ETFs, which saw net inflows of 470 million USD, largely driven by BlackRock's IBIT and ARKB from Ark Invest. ETH spot ETFs also experienced significant inflows, adding 48 million USD to their holdings.

According to Eric Balchunas from Bloomberg, U.S. Bitcoin ETFs have now surpassed 20 billion USD in total net inflows for the first time in nine months. To put this in perspective, it took gold ETFs nearly five years to reach a similar milestone.

These Bitcoin ETFs offer an important entry point for institutional capital into BTC. By issuing ETFs, these funds help ease selling pressure when large institutions offload their holdings. Simultaneously, the rising demand from BTC ETFs supports prices and could trigger a supply shock when demand outstrips the limited supply available on OTC markets.

As Bitcoin’s price climbs, both BTC and ETH ETFs have seen increased activity, with 93.2% of BTC holders now in profit.

Could Bitcoin's Rally Be Driven by the Election?

In a recent interview on CNBC, Anthony Pompliano shared his views on the current Bitcoin price surge. When asked if BTC's rise was linked to former President Trump's lead over Kamala Harris in Polymarket predictions, Anthony dismissed this as the main driver. Instead, he attributed BTC’s recent price jump to the looming supply shock following Bitcoin’s halving, alongside global monetary easing and rate cuts.

In the short term, BTC’s price may correlate with U.S. stock markets and gold. However, in the long run, the same factors driving gold’s rise are also propelling Bitcoin’s growth—namely, government money printing leading to inflation and the devaluation of fiat currencies. Investors are always on the lookout for value-preserving assets, and with its capped supply of 21 million coins, decentralized nature, and other advantages, BTC stands out as a prime choice. Many now consider Bitcoin the “digital gold” for safeguarding wealth against inflation and currency devaluation.

Anthony highlighted that these principles aren’t new—many experts have discussed them for months. The core issue remains that fiat currencies continue to lose value, prompting people to seek assets that can store the value of their labor. While most people still earn wages in fiat currencies like the USD, those currencies devalue over time, eroding the value of their labor. Consequently, workers increasingly look for alternative assets to protect their wealth, using fiat mainly for daily transactions.

Anthony also noted that more people are treating Bitcoin as a store of value, similar to a savings account, while spending primarily through stablecoins. In nations with underdeveloped banking systems, it’s estimated that roughly 10% of the population uses some form of cryptocurrency for everyday transactions, underscoring crypto’s growing adoption in real-world applications.

Deaton vs. Senator Elizabeth Warren

Pro-crypto advocate John Deaton squared off against anti-crypto Senator Elizabeth Warren in a heated debate over their race for a Senate seat.

During the debate, Deaton accused Warren of hypocrisy. While she has long criticized the banking system for exploiting citizens with excessive fees, she now opposes crypto—a technology that Deaton argues could free individuals from banking exploitation. He pointed out that crypto offers an avenue for low-income individuals to access financial services that traditional banks have denied them.

Senator Warren, however, softened her tone regarding crypto, stepping back from her previously harsh anti-crypto stance. She stated that people should be allowed to buy and sell cryptocurrencies as long as they follow regulations. However, she then turned her focus to Deaton, accusing him of receiving 90% of his campaign funding from the crypto industry, and suggested that he would represent crypto interests over those of the general public if elected.

Throughout the debate, Warren dodged Deaton’s challenges to address her opposition to crypto and her defense of traditional banking, instead focusing on Deaton’s financial ties to the industry. She emphasized that Deaton would have a bias if elected due to his heavy support from crypto firms.

SEC vs. Ripple: The Appeal

Confusion has arisen over the deadline for the SEC’s detailed appeal in the Ripple case.

Initially filed on October 2nd, with formal acknowledgment on October 4th, the SEC had 14 days to submit a detailed appeal, outlining their rationale. The crux of the matter remains whether the SEC’s appeal focuses on its belief that XRP is still a security or whether it challenges the penalties imposed by Judge Torres as insufficient.

However, some attorneys, including those representing Ripple, Coinbase, and Meta Lawman, believe the 14-day countdown began on the filing date, meaning the SEC may have missed its deadline (October 16th), as opposed to starting from the official acknowledgment date, which would make the deadline October 18th.

If the SEC has indeed missed the deadline, its appeal could be rendered invalid.

Despite this, a spokesperson for the SEC told Fox Business News this morning that the appeal process will continue.

The uncertainty around the deadline is due to the fact that most attorneys typically file their detailed appeals well before the deadline. This incident further highlights the SEC’s apparent disregard for court procedures.

The SEC’s Appeal Details

According to Jeremy Hogan, the SEC’s appeal focuses on two key points:

1. Ripple’s sale of XRP on exchanges (i.e., Ripple selling XRP directly on exchanges) and its use of XRP for payments, salaries, and other operational purposes.
2. Ripple co-founders Brad Garlinghouse and Chris Larsen are held accountable for assisting in the sale of XRP to institutional investors.

Previously, Judge Torres ruled that Ripple could sell XRP on exchanges and use it as a payment method, and that Garlinghouse and Larsen should not be held liable because crypto rules were unclear at the time (i.e., they couldn’t have known they were breaking the law, and therefore couldn’t have intentionally done so).

Interestingly, the SEC did not appeal these points:

• XRP is not classified as a security.
• The SEC does not have the right to claim damages.

This is positive news for XRP but less so for Ripple, as the appeal process could drag on until early 2026. If Ripple loses, it may have to pay more than the 125 million USD it was initially fined. Ultimately, this appeal revolves around financial penalties.

Additional Market Highlights:

• Metaplanet extended some of its put options, gaining an additional 5.90 BTC. The firm currently holds 861.38 BTC.
• Siam Commercial Bank (SCB) in Thailand launched a cross-border payment service using stablecoins in partnership with Lightnet and Fireblocks. This marks the first time stablecoins have been used in Thailand’s traditional financial sector for remittance transactions. The service is expected to improve capital efficiency, reduce operational costs, and enable local currency transactions.
• FBI Arrest: The FBI apprehended a man who posted false information on X (formerly Twitter) about the approval of a spot Bitcoin ETF in January. It remains unclear how this individual accessed the SEC’s X account, but reports suggest two-factor authentication was disabled during a staffing change at the SEC.
• Federal Budget Projections: The Federal Budget Responsibility Committee estimates that Trump’s tax and spending plans would add 7.5 trillion USD to the national debt over the next decade, while Harris’s plans would add 3.5 trillion USD in the same period.
• Robinhood is now offering futures contracts for Bitcoin, Ethereum, oil, and the S&P 500.
• Do Kwon, the founder of Terra (LUNA), has been accused of conducting crypto transactions from prison in Montenegro following his March 2023 arrest. Kwon’s electronic devices, including a computer and phone, were not seized immediately, allowing him to execute at least three transactions linked to Luna and TerraUSD worth millions of dollars. Montenegrin authorities are still deciding whether Kwon will be extradited to South Korea or the U.S.
• Italy’s Capital Gains Tax Increase: Italy's Deputy Finance Minister, Maurizio Leo, announced plans to raise the capital gains tax on Bitcoin from 26% to 42%, citing the growing prevalence of cryptocurrency use in the country.
• Bitcoin & Gold ETF Launch (BTGD): The STKD Bitcoin & Gold ETF launched this week, offering investors exposure to two scarce assets that are seen as hedges against inflation and currency devaluation. For every dollar invested, the fund allocates money to both BTC and gold through ETFs and futures contracts tied to these assets.
• Trump’s World Liberty Financial (WLFI) Token Sale: The Trump family-backed World Liberty Financial token sale garnered 220 million USD within the first hour, despite the platform’s website crashing. By the end of the day, the fund had raised an additional 12 million USD, bringing the total to 232 million USD, though still below initial projections.
• Trump’s Crypto Donations: Donald Trump’s presidential campaign raised 7.5 million USD in crypto donations in Q3.
• Amazon Partners with Dominion Energy: Amazon Web Services (AWS) signed an agreement with Dominion Energy, a Virginia utility company, to explore the development of a small modular nuclear reactor near Dominion’s existing North Anna nuclear plant. AWS's growing demand for clean energy, particularly as it expands into AI-driven services, prompted this move. The agreement is part of Amazon’s plan to achieve net-zero carbon emissions.
• Base Ethereum Rollup Surpasses Arbitrum: Base, a Layer 2 rollup on Ethereum, has become the largest Ethereum rollup by total value locked (TVL), surpassing Arbitrum. Base now holds 2.49 billion USD in deposits, ranking it among the top five blockchains by TVL, following Ethereum, Tron, Solana, and BNB Chain.