Data-driven commentary and charts on the biggest events in cryptocurrency markets this month.
Download the full monthly report here.
If October taught us anything, it’s that headlines are important. At no point since the 2017 bull run has mainstream acceptance of cryptocurrencies appeared stronger than this past month, which was bursting with positive institutional news. Each successive announcement of Bitcoin purchases from the likes of Stone Ridge Asset Management, MicroStrategy, Square, and Mode Global Holdings, caused a near instant market reaction, propelling the oldest crypto-asset to multi-year highs.
However, PayPal’s entrance into cryptocurrency markets, announced October 20th, had the biggest industry impact of all because it promises something entirely different: usability. This elusive feature of cryptocurrencies has been the biggest roadblock to widespread adoption which is why the payment provider’s pledge to create a seamless payment experience for 26 million vendors could normalize the usage of cryptocurrencies around the globe. Following the announcement, Bitcoin quickly shot to 2020 highs above $13k, and a week later briefly surged above $14k, its highest level since January of 2018. Bitcoin’s performance this October far outpaced any crypto-asset or traditional asset, highlighting its unicity as a financial instrument.
Key highlights from this month’s report include:
1. Institutions Embrace Crypto: Positive institutional news propelled Bitcoin to multi-year highs, ending the month up 28% having traded above $10k every day since July 27th, its longest 5-digit run since 2017.
2. Trading Volume Shifts to Bitcoin: BTC-USD trading volumes grew 12% in October while ETH-USD volumes declined 45%, marking a shift in the balance of trading activity.
3. DeFi’s Continued Correction: All but one of the eight top-ranked DeFi tokens by market cap ended the month down double digits, with Yearn Finance dropping 54% since October 1st.
4. No Clean Correlation Narrative: Bitcoin’s correlation with equities, gold, and other crypto-assets showed no convincing narrative throughout October, highlighting its unpredictability as a financial asset.
5. Spreads Widen for Bitcoin-Dollar Pairs: Bitcoin’s rising volatility towards the end of October prompted market makers to account for increased risk by widening spreads.
Download the full report here.
Written by Clara Medalie