Market Overview

On Monday, October 28, U.S. stocks rose across all three major indices, with the Dow Jones leading, up by 0.65%. Futures trading remained steady, while gold and oil prices hovered around $2,767 per ounce and $67.7 per barrel, respectively.

Bitcoin also saw substantial growth, peaking at $71,200 and pushing the total crypto market capitalization to $2.515 trillion. With this upward movement, U.S.-based Bitcoin spot ETFs attracted a significant $479 million influx, primarily from BlackRock’s IBIT fund, signaling strong institutional interest. Meanwhile, Ethereum ETFs saw an outflow of $1.1 million, mainly from Grayscale’s ETHE, highlighting a shift in focus toward Bitcoin.

Despite Bitcoin’s price increase, the overall crypto market hasn’t reached the frenzy levels seen during previous bull runs. For Bitcoin to ignite widespread enthusiasm and attract new entrants, it may need to maintain higher price levels for an extended period. This bull cycle is unique, as Bitcoin has reached new all-time highs before its upcoming halving, fueled by the approval of BTC spot ETFs in the U.S., which has driven an influx of capital into the asset. This substantial demand has led to a supply shock, propelling Bitcoin’s price up in a short period since ETF trading began.

The BTC ETF has indeed marked a historic milestone for Bitcoin this cycle, yet market sentiments like fear and greed persist. These emotions continue to shape cycles, which may evolve as new market factors emerge.

VanEck CEO: BTC Could Reach $3 Million

In a recent CNBC interview, VanEck CEO Jan van Eck shared his optimistic view on Bitcoin's future, predicting it could reach $3 million by 2050. He highlighted that this forecast implies an average annual growth rate of 16%, a realistic target given that the NASDAQ-100 index has averaged a 15.5% increase annually since 2008. Jan van Eck posits that Bitcoin has the potential to grow as a tech stock would, benefiting from market adoption and sustained institutional interest.

He further suggested that Bitcoin could evolve into a reserve asset for nations, citing recent activity among new BRICS members like the UAE, Argentina, and Ethiopia, which are mining Bitcoin with governmental resources. Notably, Russia's sovereign wealth fund is also investing in Bitcoin mining across BRICS nations, intending to leverage BTC for global trade settlements.

As these nations reintegrate into the global financial system, their early adoption of Bitcoin as a trade currency could catalyze its mainstream acceptance. While this idea may seem distant, the cyclical nature of Bitcoin’s price history—with periods of rapid surges followed by corrections—supports the notion that Bitcoin could achieve such high price levels over time.

Growing Interest Among Nations in BTC Holdings

Countries are beginning to accumulate Bitcoin, signaling that crypto adoption has moved beyond speculative hype to become a real-world financial tool. Former U.S. President Donald Trump hinted that if re-elected, he would allocate 5% of Bitcoin’s supply to U.S. national reserves, underscoring the growing legitimacy of Bitcoin as a sovereign asset.

The Federal Reserve Bank of St. Louis has explored the challenges of tying a currency’s value to a finite supply like gold, citing factors such as:

1. Economic Instability: Gold’s supply is not fixed, affecting its stability as a currency anchor.
2. Environmental Concerns: Mining gold is resource-intensive and environmentally harmful.
3. Limited Supply Constraints: A finite supply can limit currency stability.

In contrast, the St. Louis Fed’s 2018 analysis pointed out Bitcoin’s fixed supply and transparent distribution model, highlighting scarcity as a key driver of monetary value. However, unlike the USD, which is not constrained in supply and can be expanded as needed, Bitcoin’s supply cap ensures consistency over time, which could contribute to its valuation as a stable asset.

Additional Insights

1. Russia Raises Interest Rates to 21%
   Russia has increased its interest rates to an all-time high of 21% to curb prolonged inflation, underscoring the ongoing economic pressures on the country.
2. First University Invests in Bitcoin ETF – Emory University
   Emory University, located in Atlanta, Georgia, recently invested $16 million in Grayscale’s Mini Bitcoin ETF, making it the first American university to directly invest in a Bitcoin ETF. This move sets a precedent among academic institutions, suggesting that Bitcoin is increasingly seen as a viable investment option for large endowments.
3. Hong Kong Considers Crypto Tax Breaks
   Christopher Hui, Hong Kong’s Secretary for Financial Services and the Treasury, announced plans to introduce crypto tax relief, allowing Hong Kong residents to benefit from tax reductions on crypto investments. This proposal is expected to be legislated by the end of the year, potentially attracting more crypto investments to Hong Kong.
4. Bolivia’s Banco Bisa Launches USDT Services
   Bolivia’s Banco Bisa has introduced services for storing and transferring USDT, enabling customers to buy, sell, and transfer the stablecoin domestically and internationally. This marks a significant shift as Bolivia only recently lifted its crypto ban in June 2024, sparking a surge in digital asset transactions.
5. Robinhood’s New Election Trading Contracts
   Robinhood has introduced new contracts allowing U.S. users to buy and trade predictions on the 2024 presidential election, offering the choice to invest in either Kamala Harris or Donald Trump as potential outcomes. This feature is limited to users meeting specific eligibility requirements.
6. Coinbase Unveils “Based Agent” AI Bot Creator
   Coinbase has launched the "Based Agent," an AI-powered tool that lets users set up automated bots for on-chain tasks such as trading, swapping, and staking within minutes. By providing ready-to-use templates, the Based Agent simplifies smart contract interactions, requiring only API access from Coinbase and OpenAI.

Conclusion

This week’s updates showcase the dynamic evolution of Bitcoin and crypto adoption, from institutional interest in Bitcoin ETFs to national accumulation strategies. The optimism expressed by VanEck’s CEO reinforces the potential of Bitcoin as a long-term global financial instrument, especially as BRICS nations explore alternatives to USD-based transactions.

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