Bitcoin’s price fluctuated between $59,000 and $72,000 during October, nearing its all-time high of $74,000 set in March 2024. This surge was partly driven by investor optimism ahead of the US presidential election.
Cryptocurrency industry observations with thanks to the team at CKC Fund.
Ethereum traded between $2,300 and $2,700 throughout the month. Despite the overall market uptrend, ETH’s performance lagged behind Bitcoin, with analysts attributing this to various factors, including network upgrades and market dynamics.
Regulatory developments for crypto
The SEC delayed decisions on spot Bitcoin ETF applications, maintaining uncertainty in the market. However, both major US presidential candidates expressed support for cryptocurrency-friendly policies, contributing to positive market sentiment.
The EU’s MiCA regulation advanced in October 2024 by implementing licensing requirements, stablecoin standards, anti-market abuse rules, and “passporting” access, allowing licensed firms to operate across all EU states.
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Institutional interest in crypto
Grayscale actively advocated for converting its Bitcoin Trust (GBTC) into a spot ETF, which many investors hope will offer a regulated alternative for BTC exposure.
Several high-profile firms announced minor crypto allocations, signifying a cautious but growing interest among corporations to diversify holdings. Additionally, private funds geared toward crypto infrastructure investment raised significant capital, indicating a bullish stance on long-term sector growth.
On-chain metrics
BTC’s on-chain activity saw a significant uptick, with addresses holding more than 1 BTC reaching an all-time high. Additionally, the total hash rate continued to climb, reflecting robust miner confidence. Stablecoin inflows, especially in Tether (USDT) and USD Coin (USDC), demonstrated a rise in exchange deposits, typically signalling a build-up for further trading activities.
Investor sentiment, as measured by the Fear and Greed Index, remained in the “neutral” zone for most of October, reflecting cautious optimism. The index briefly spiked to “greed” during BTC’s mid-month rally.
Key risks and challenges for crypto
Concerns over inflation and interest rate uncertainties in various countries including the U.S. influenced the crypto market, as concerns around borrowing costs often push investors toward less volatile assets. Uncertainty regarding ETF approvals and SEC policies continues to create a volatile environment, as many traders and institutions await clearer rules.
Although improving, liquidity remained below 2022 levels in October, with some exchanges reporting lower trading volumes. This could present a challenge in scaling the market sustainably.
Crypto outlook for the rest of November
November could see heightened volatility around ETF approval news and macroeconomic announcements. Positive developments in regulatory clarity could act as strong catalysts for further growth, while delays or negative decisions could lead to short-term pullbacks. Key themes to watch include the potential for increased institutional participation, developments in Layer-2 scaling solutions, and the ongoing DeFi and NFT sector consolidation.
Notably, so far in November prices and volume have substantially increased in the aftermath of US election day. Crypto markets have surged, with Bitcoin reaching a record $75K in November 2024.
While regulatory and economic uncertainties remain, Trump’s pro-business stance and interest in decentralized finance have fuelled optimism for many in the digital asset space. High-beta strategies are likely to thrive in this climate, allowing investors to capture gains by focusing on altcoins and DeFi assets that amplify market rallies.
Given these considerations, actively managed, diversified portfolios containing high-beta assets are likely to offer an effective way to seize growth while maintaining flexibility for potential regulatory, economic, and/or geopolitical changes.
