Crypto Market Weekly Wrap: Retail Bitcoin Holdings Soar

London: 29 October 2024 (TraderMade): The week has seen notable activity in the cryptocurrency markets, with shifting institutional interest, regulatory updates, and developments on both the global political and macroeconomic fronts impacting various asset classes.

Key Takeaways

• Retail Bitcoin Holdings Surge: Retail investors added 18,000 BTC since July, marking steady confidence despite market volatility.
• Institutional Demand Up: Bitcoin ETFs saw $997.7M in inflows this week, the third consecutive positive week for institutional activity.
• Microsoft Against Bitcoin: Microsoft advises shareholders to vote down Bitcoin as a portfolio diversification asset.
• Tether Under Investigation: Criminal probes question Tether's involvement in illicit transactions, highlighting regulatory pressure.
• Coinbase Launches AI Tool: New "Based Agent" AI tool enables Coinbase users to set up a crypto wallet and assistant in minutes.

Retail Bitcoin Holdings Surge

Retail investors added 18,000 Bitcoin (BTC) to their holdings since the July 3 market low, increasing total holdings to 1.753 million BTC. This rise in retail accumulation demonstrates ongoing confidence among smaller investors despite a volatile market landscape.

Bitcoin ETFs Continue Strong Inflows

Bitcoin exchange-traded funds (ETFs) recorded a substantial $997.7 million net inflows this week, marking the third consecutive week of positive activity.

These inflows highlight robust institutional demand for BTC as financial institutions continue to express interest in the asset amid ongoing geopolitical and economic uncertainty.

Microsoft Advises Against Bitcoin as a Diversification Strategy

In corporate news, Microsoft advised its shareholders to vote against a proposal to evaluate Bitcoin as a diversification asset. This marks a significant stance from one of the world's largest tech companies, positioning it against Bitcoin as a formalized investment tool within its portfolio.

Criminal Investigation Targets Tether Use in Illicit Activities

They launched a criminal investigation to determine whether Tether (USDT) is being misused by third parties for illegal activities, including terrorism and hacking.

This investigation adds a layer of scrutiny around the stablecoin, which has long been a central point of discussion for its role in crypto liquidity and transactions.

Denmark Proposes New Crypto Tax Measures

In Europe, Denmark's tax authority recommended implementing a "mark-to-market" taxation system for crypto assets.

The proposal, if passed, would apply to all cryptocurrency holdings and could redefine how these assets are taxed, setting a precedent for other jurisdictions evaluating their approach to crypto regulation.

Coinbase Introduces AI-Powered "Based Agent" Tool

Coinbase launched a new tool called "Based Agent," designed to enable users to set up a personalized AI assistant and crypto wallet in under three minutes.

This innovation showcases a growing trend of integrating AI in crypto, aiming to simplify crypto management and make it more accessible to mainstream users.

Market Trends and Technical Analysis

Macroeconomic events and geopolitical developments notably impacted Bitcoin's performance this week. BTCUSD saw a decline mid-week, partly driven by rising bond yields and escalating Middle Eastern tensions.

Despite the dip, the asset displayed resilience, with buying interest evident at lower levels, suggesting sustained demand.

Key technical levels for Bitcoin remain at $53,000, $55,000, $66,000, $72,000, and the all-time high of $73,794.

Ether (ETH) also displayed relative strength, though ETHBTC ratios saw some breakdowns, reflecting a shift in market sentiment and risk dynamics.

Key technical levels for Ethereum remain at $2,100, $2,800, $3,600, $4,000, and an all-time high of $4,878.

Altcoin Market Sees Increased Client Activity

The spot trading desk reported heightened interest in major and minor altcoins, including Layer 1 tokens like SUI, FTM, and STX, alongside smaller cap assets such as RON, GOG, and CELO.

Memecoins like SHIB and DOGE continued attracting bids, especially with the platform's expanded support for these assets in custody and OTC trading.

Derivatives Market Insights

In derivatives, Bitcoin and Ether futures showed rising basis rates, with BTC's 90-day annualized rate up by 30 basis points to 11.1% and ETH's up by 80 basis points to 9.7%.

Options markets also showed an uptick in BTC upside volatility as market participants increased their exposure, while ETH options remained more neutral in the lead-up to the U.S. election.

Conclusion

This week's crypto market wrap reveals a dynamic and resilient market, with a diverse set of market participants—ranging from retail to institutional—actively engaging with various assets. As geopolitical and macroeconomic factors unfold, the cryptocurrency space remains poised for further developments.