Current Market Overview

The crypto market is once again facing waves of FUD (Fear, Uncertainty, and Doubt), causing noticeable concern among traders and investors. Both Bitcoin (BTC) and the US stock market experienced slight corrections recently as uncertainty looms.

• US Stock Market Performance: On October 21, US stocks saw minor adjustments after a period of growth, with the Nasdaq showing a modest increase of 0.277%. Futures contracts remained relatively flat, while the price of gold remained high at $2,735 per ounce.

• Oil Market: Crude oil hovered around $70 per barrel.
• Bitcoin’s Movement: BTC saw a slight dip, falling to $67,000 from its high of $68,000. Most major altcoins followed suit and declined as well. The total market capitalization of the crypto space now stands at $2.437 trillion.

A key indicator worth noting is that as BTC crossed the $68,000 mark, 96.6% of all Bitcoin holders were in profit, a level known as the “red zone,” where profit-taking often occurs. This could explain some of the selling pressure as many investors seek to lock in gains.

FUD: Could the US Federal Reserve Ban Bitcoin?

A new study published by the Federal Reserve Bank of Minneapolis has stirred concerns by suggesting that banning Bitcoin could be an option if certain financial conditions arise. The paper theorizes that if demand for US Treasury bonds weakens, making it difficult for the US government to borrow more money, banning Bitcoin could serve as a temporary solution to redirect capital flows back into US bonds.

However, it’s important to emphasize that this is purely speculative and not a formal proposal. Moreover, the Fed itself does not have the authority to ban Bitcoin; such an action would require congressional approval.

This research has added fuel to an already tense market atmosphere, particularly following a critical report from the European Central Bank (ECB) regarding Bitcoin. Both reports suggest a growing scrutiny of Bitcoin by major financial institutions, raising questions about the regulatory future of the cryptocurrency.

Michael Saylor’s Surprising Remarks on Bitcoin Custody

In a surprising twist, Michael Saylor, CEO of MicroStrategy and a well-known Bitcoin maximalist, made comments that seemed to soften his stance on the importance of self-custody for Bitcoin holders. In a recent interview, Saylor stated that storing Bitcoin with a bank or trusted institution might be a reasonable option, contrasting his earlier viewpoint, which advocated for personal ownership of Bitcoin in private wallets to ensure true ownership without third-party interference.

Saylor referenced Executive Order 6102 from 1933, where the US government mandated the surrender of privately-held gold in an effort to combat the Great Depression. The order made it illegal for citizens to hoard gold, with severe penalties for non-compliance.

While Saylor reassured that such measures are unlikely today, some analysts, like Thuan, warn that if significant amounts of Bitcoin are stored in centralized institutions like banks, a similar order could theoretically be applied to Bitcoin in the future. Centralized Bitcoin holdings may be more vulnerable to government seizure compared to privately-held wallets.

Bitcoin FUD, but Still Bullish Outlook

Despite these unsettling reports, optimism around Bitcoin’s long-term potential remains strong. In a recent interview, Liz Ann Sonders, Chief Investment Strategist at Charles Schwab, downplayed Bitcoin’s role as either a currency or a store of value. However, her remarks conflicted with a Schwab survey that found nearly half (45%) of respondents plan to invest in crypto ETFs in the near future, highlighting a disconnect between public interest and institutional sentiment.

Interestingly, many of the old criticisms of Bitcoin, such as it being “not scarce” due to the existence of thousands of altcoins, seem to have faded. Instead, critics now acknowledge Bitcoin’s scarcity but argue that its limited supply may prevent it from functioning effectively as a currency. These evolving arguments underscore the ongoing debate over Bitcoin’s role in the financial ecosystem.

One example of such inconsistency is the recent report by the ECB, which argued that Bitcoin has no intrinsic value, yet warned that if Bitcoin’s price continues to rise, it could create a financial imbalance between early adopters and those who either enter the market late or do not invest at all.

Similarly, a recent comment by the Minneapolis Fed branch’s president claimed that Bitcoin is worthless, despite a new study from the same institution suggesting that Bitcoin might need to be banned if too many people invest in it instead of US bonds.

Institutional Adoption Continues Despite FUD

Despite the noise and uncertainty, institutional interest in Bitcoin and crypto has not waned. Major financial players like BlackRock have already launched Bitcoin and Ethereum ETFs, demonstrating confidence in the long-term viability of these assets. Additionally, other large-scale institutional investors continue to enter the space, signaling that Bitcoin is firmly on the radar of the traditional financial world.

Henry Ford’s Remarkable Prediction of Bitcoin?

In a curious historical note, Henry Ford, founder of Ford Motor Company, seemed to have predicted something akin to Bitcoin nearly a century ago. In 1921, Ford proposed the idea of an “energy currency,” where the standard would be a unit of energy consumed in one hour, comparable to Bitcoin’s Proof-of-Work mechanism today.

Ford argued that by shifting away from gold as the standard, societies could avoid many of the financial manipulations that had led to conflict and instability in his time. He went so far as to say that if people truly understood how the financial system worked, there would be a revolution before morning.

Other Crypto News

• Chris Larsen’s Contributions to Political Campaigns: Chris Larsen, co-founder and chairman of Ripple, has donated over $11.8 million to PACs supporting US Senator Kamala Harris’s presidential campaign, making him one of the largest individual crypto donors this election cycle.
• Stripe Acquires Bridge: Payment processing giant Stripe has acquired stablecoin platform Bridge for $1.1 billion, marking the largest acquisition in the crypto industry to date. Bridge specializes in enabling businesses to accept stablecoin payments, positioning Stripe to expand its presence in the crypto payments space.
• Yuga Labs Launches Apechain: Yuga Labs, the company behind Bored Ape Yacht Club (BAYC), has launched Apechain, a Layer-2 blockchain built on Ethereum using Arbitrum technology. Apechain is designed to enhance the functionality of Apecoin, with faster transactions, lower fees, and cross-chain capabilities.

Conclusion

The crypto market may be facing temporary headwinds due to FUD, regulatory concerns, and speculative warnings from central banks, but the long-term outlook remains promising. With institutional adoption growing and innovative developments like Bitcoin ETFs, Layer-2 solutions, and blockchain integration expanding, Bitcoin and crypto as a whole continue to solidify their place in the global financial landscape. Investors should remain cautious but optimistic, keeping an eye on macroeconomic trends and regulatory shifts as they unfold.

‍