Stormrake - Insights #Australian Crypto Convention

The Rake Review: October 2024

Thu, 31 Oct 2024 15:46:07 +1100

October Did Not Disappoint

October lived up to its ‘Uptober’ reputation, with Bitcoin making gains and setting the stage for potential new highs.

Another successful 'Uptober'

After some early doubt and fear, October has officially been another successful month for BTC and continues to live up to its name of ‘Uptober’. In previous Octobers, Bitcoin saw an average return of 23%. At the time of writing, Bitcoin is up +14.6% since October 1 and is looking to continue higher in November.

October has been a rollercoaster to say the least, with the month opening at $63,400 before spending the first week or two struggling to make any progress to the upside and even falling below $60k briefly. Whilst things were looking bearish for the short term, our long term faith was not wavered as the long term structure we identified had remained in play. Will Uptober be the month to send Bitcoin to new all time highs or be the ignitor for November to be the month we see a new all time high.

Bitcoin Technical Analysis:

Bitcoin vs USD

A clearer view of the chart can be found here: https://www.tradingview.com/x/BsCN8quF/

In last month's Rake Review, we discussed Bitcoin’s bull flag formation, a bullish pattern that has now broken to the upside, showing promising momentum. After testing the top of the channel, Bitcoin has continued higher, reinforcing our target of $88k. The strong structure of higher highs and higher lows keeps this target within reach.

Bitcoin currently faces resistance at its previous all-time high from March. This level might prompt a pullback, but as long as BTC remains above its recent higher low at $65,250, the bullish trend persists. Minor pullbacks on shorter timeframes may offer good entry points to further allocate toward your Bitcoin positions.

Bitcoin Dominance

A clearer view of the chart can be found here: https://www.tradingview.com/x/0QAJRsAI/

The chart above compares Bitcoin dominance (yellow line), Bitcoin price (purple line), and Total 2 (the total crypto market cap excluding Bitcoin - cyan line). Bitcoin dominance represents the percentage of the overall cryptocurrency market cap made up by Bitcoin, highlighting its relative strength and influence in the market.

The chart above shows Bitcoin dominance (yellow line), Bitcoin price (purple line), and Total2 (the entire crypto market cap excluding BTC - cyan line). Currently, Bitcoin dominance is at levels not seen since April 2021 and is likely to continue rising. When dominance increases, more capital flows into BTC, leading to price appreciation. Now at 60%, Bitcoin dominance has historically reached around 67.39% in previous bull runs. Typically, dominance peaks within 12 months of BTC’s cycle high, marking the blow-off phase where both Bitcoin and altcoins rally to new all-time highs. Indications suggest that late 2025 could be the peak of the bull run.

While a drop in BTC dominance doesn’t mean a price decline, it does indicate that capital flows out of other coins while new funds enter the crypto space, lifting both BTC and altcoins. We expect Bitcoin dominance to rally to around 67% over the coming months before it peaks. When this peak occurs, the entire crypto market could reach even higher levels in 2025. In bear markets, both prices and dominance decline as capital exits the crypto space or moves into stablecoins like USDT or USDC. Prepare for the bull run by continuing to accumulate Bitcoin—contact your personal Stormrake Broker to seize this golden opportunity.

What’s Next for Bitcoin in November?

If you thought October was volatile, brace yourself for November. Bitcoin is testing its previous all-time high, with the US election just days away. Regardless of the election outcome, Bitcoin’s long-term position remains strong. Expect significant volatility in the first couple of weeks (similar to October) before Bitcoin regains stability and likely continues its climb toward our bull flag target of $88k.

Market Update

Here is the fast five of what you need to know about the market in October 2024:

Bitcoin ends October up 14% after recovering from an initial 7% dip.
TON fell out of the top 10, replaced by TRON.
Solana outperformed Ethereum with a 15% gain compared to Ethereum’s 2.4% rise.
SPX6900 entered the top 100, soaring 432% this month.
Memecoins were the hottest category, with some gaining over 50%, 100%, and even 200%.

Video of the month

How the US election may affect Bitcoin?

In the news

United States Presidential Election:

With the US election less than a week away, it’s shaping up to be one of the most pivotal in recent memory. Since Harris replaced Biden, the race has tightened, with betting odds currently leaning in Trump’s favour. Polymarket gives Trump a 66% chance of victory, while Sportsbet offers odds of $1.55. Despite these odds, polling suggests the race is still close, and many consider it a virtual toss-up.

For the crypto sector, a Trump victory is seen as favourable, with Trump proposing a US Bitcoin Strategic Reserve and even incorporating Elon Musk into his campaign—a strong crypto advocate. Harris, on the other hand, has made minimal statements about cryptocurrency, and Democrats have historically been more critical of digital assets. The prospect of a Trump win has already fueled Bitcoin’s rally as investors potentially price in his victory. If Harris wins, a market dip might follow, creating a “buy the dip” opportunity for Bitcoin before the bull run continues. Regardless of the election’s outcome, market sentiment points to a bullish trend into 2025, as fundamental support for crypto remains strong.

BRICS Members Begin Bitcoin Mining

At a recent BRICS meeting, new members UAE, Argentina, and Ethiopia revealed they have begun government-backed Bitcoin mining operations. This shift reflects BRICS countries' growing interest in digital assets to bolster economic resilience and potentially move away from Western financial systems. As the coalition grows in economic power, Bitcoin may emerge as a preferred currency for these nations, prompting further global interest in adopting Bitcoin.

Bitcoin and Ethereum ETF Performance:

October was a record month for Bitcoin and Ethereum ETFs, with the Spot Bitcoin ETF seeing $870 million in net inflows on October 29 alone—the third highest day since inception. U.S. ETFs now hold almost 1 million Bitcoin, just behind Satoshi Nakamoto's holdings. If this trend continues, ETFs could become the largest Bitcoin holders by November. Spot Bitcoin ETFs have had nearly continuous inflows since October 14, totaling $4.5 billion, while the Spot Ethereum ETF saw net inflows of $65.1 million in the same period.

Education

Stormrake's Morning Note:

For those who want to stay engaged with the crypto market, Stormrake has relaunched the Morning Note, a daily 3-4 minute read covering the previous day's trading, key events, and upcoming highlights. It also includes the “Stormrake Spotlight” to feature coins we believe have strong performance potential.

In recent spotlights, coins like Sui (35% gain), Solana (30%), Goat (80%), and Fantom (55%) have achieved significant gains. These aren’t just short-term plays; we have long-term conviction in these picks. Stay ahead by subscribing and let us handle the research, so you’re prepared for the bull run.

Subscribe to the Morning Note here: https://stormrake.substack.com/

Stormrake is heading to the Australian Crypto Convention

We’re thrilled to be sponsoring the Australian Crypto Convention in Sydney on November 23-24! As a sponsor, we’ll have a dedicated booth at the event, and we invite you all to come by, meet our team, and enjoy exclusive perks. Our directors and key members from both the trading and brokerage desks will be there, ready to connect and discuss the latest in crypto.

Our booth will feature a popcorn machine for a quick snack, and potentially a Stormrake DJ booth and an exclusive party for our clients. We’re offering discounted tickets—contact your Stormrake Broker for details or follow the link below to secure yours. We look forward to seeing you there!

GET YOUR DISCOUNTED TICKETS HERE: https://auscryptocon.com/?utm_medium=ctr&utm_source=email&utm_campaign=stormrake3

Written by Alexandar Artis

Memes of the month

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No Advice Warning

The information in this newsletter is general only. It should not be taken as constituting professional advice from the author - Stormrake PTY LTD.

Stormrake is not a financial adviser and does not provide financial product advice. You should consider seeking independent legal, financial, taxation or other advice to check how the information relates to your unique circumstances. Stormrake is not liable for any loss caused, whether due to negligence or otherwise arising from the use of, or reliance on, the information provided directly or indirectly, by this newsletter.

Disclaimer

All statements made in this newsletter are made in good faith and we believe they are accurate and reliable. Stormrake does not give any warranty as to the accuracy, reliability or completeness of information that is contained here, except insofar as any liability under statute cannot be excluded. Stormrake, its directors, employees and their representatives do not accept any liability for any error or omission in this newsletter or for any resulting loss or damage suffered by the recipient or any other person. Unless otherwise specified, copyright of information provided in this newsletter is owned by Stormrake. You may not alter or modify this information in any way, including the removal of this copyright notice.

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The Rake Review: September 2024

Mon, 30 Sep 2024 15:12:00 +1000

Stormrake take Token2049

September was a month where both sides of the market were in control. Bears were dominating and looking to push BTC back below $50k early in the month, before a sharp reversal from the bulls on the anticipation of the first interest rate cut in over four years.

Token2049; Bitcoin remains king, Stormrake key takeaways:

Token2049, the leading global cryptocurrency and blockchain conference that brings together industry leaders, investors, developers, and enthusiasts to discuss and shape the future of the digital asset ecosystem.

Token2049 was a showcase of the crypto industry's vibrancy, filled to the brim with new tokens, chains, infrastructure projects, and venture capitalists. Despite the influx of innovation, one sentiment was clear among attendees: there is only one Bitcoin. Bitcoin remains the king and is by far the best asset in the digital economy, outnumbering new crypto use cases in both utility and trust.

A significant trend observed at the event was the proliferation of stablecoins. Once merely handy trading pairs, stablecoins have evolved into dominant assets in their own right. They exemplify one of crypto's best use cases—seamless remittance and value transfer—highlighting the sector's growth beyond speculative trading to practical financial solutions.

The rise of memecoins and community tokens also garnered attention. This shift marks a move away from low-float, high fully diluted valuation (FDV) venture capital chains and tokens, whose traditional playbooks have been exposed. Retail investors, finding it harder to catch big wins on altcoins due to increased VC involvement, are turning to memecoins in search of significant returns.

Token2049 was heralded as one of the best-organised events in the crypto space, with every major player in attendance. The atmosphere was electric, fueled by both groundbreaking projects and lavish side events—such as SUI hiring out an entire nightclub. However, this display of wealth raised questions about funding sources, notably whether such expenditures come from marketing budgets.

Amid the excitement, a note of caution prevailed. Many interesting projects were showcased, but the prevalence of scams and "deadwood" projects was also evident. During the event, our team noticed that many of these underperforming ventures are likely to disappear over time, reinforcing the enduring value of investing in Bitcoin.

A standout highlight was FET's AI robots (DesdemonaRobot), an impressive creation believed to have been initiated by Singularity. Its advanced capabilities prompted both awe and introspection, raising profound questions about humanity's role in an increasingly AI-driven world.

In summary, Token2049 reflected an industry at a crossroads. While substantial capital continues to flow—evidenced by lavish events and aggressive funding—the crypto landscape is shifting. Venture capital has changed the game, making significant gains on altcoins rarer for retail investors. As a result, many are gravitating towards memecoins and community tokens. Amid these changes, the enduring dominance of Bitcoin remains a central theme, serving as a beacon of stability in a rapidly evolving market.

Bitcoin's Bullish October

Source: https://x.com/CoinpediaNews/status/1833499655092769028/photo/1

We have just entered what has historically been the most bullish month for Bitcoin. Since 2013, Bitcoin has seen positive returns in 9 out of the past 11 Octobers, making it one of the strongest months for Bitcoin in terms of price growth. On average, October has delivered an impressive 23% return. If Bitcoin follows this historical trend, a 23% gain from the current price would push Bitcoin to a new all time high of $78,000 USD. Are you prepared for the potential rally?

With Bitcoin currently battling within a five-month bull flag, October could serve as the catalyst that pushes Bitcoin past resistance levels and into uncharted territory. A breakout from this formation might result in a surge of buying activity, potentially propelling Bitcoin to new all time highs.

Don’t miss the chance to position yourself for the upcoming rally. Reach out to your Stormrake broker today to lock in the best execution price, there is no second best.

Bitcoin Technical Analysis:

A clearer view of the chart can be found here: https://www.tradingview.com/x/TfYUizFC/

Bullish momentum was halted for a few days upon reaching the 200 SMA and the previous lower high. This was the last stand for the Bitcoin bears, but they failed. For the first time since June, BTC has created a new high, thus flipping the overall trend back to the upside. Not only has BTC created a new high, but it has also broken out of the bull flag channel. If this bull flag is to play out, then BTC will push on and create new all-time highs. A pullback to the top of the flag channel may occur; these patterns often find themselves retesting the breakout before continuing to the upside

The combination of the current breakout and bull flag, occurring during what is Bitcoin's most successful month, is a recipe for success for the entire space.

The First Interest Rate Cut in 4 Years:

The U.S. Federal Reserve recently implemented its first interest rate cut since March 2020, reducing rates by 0.5% to a new range of 4.75%–5%. This move aligns with forecasts and marks a significant shift in monetary policy after a prolonged period of rate stability. Following the decision, Federal Reserve Chair Jerome Powell addressed the media to provide clarity on the rationale behind the cut and to outline potential future monetary actions.

This rate cut and the insights from Powell suggest a measured and responsive approach by the Federal Reserve. By prioritising data-driven decisions and maintaining flexibility, the Fed aims to navigate economic challenges while fostering stability. Investors and market participants are advised to stay attentive to future announcements, as the central bank's actions will continue to be influenced by evolving economic conditions.

Is the Rate Cut Bullish or Bearish for Bitcoin?

The recent 50 basis point rate cut has stirred debate on its implications for Bitcoin. As yields decrease, the U.S. dollar becomes less attractive, leading to a decline in the value of U.S. bonds. This environment encourages investors to move toward risk-on assets due to cheaper borrowing costs. Historically, large rate cuts have been associated with signs of economic instability, and equities have performed better after gradual rate reductions compared to the swift cuts typical during economic crises. Different sectors are impacted variably, influenced by shifting consumer demand and sensitivity to interest rates.

For Bitcoin, the rate cut sends mixed signals. Traditionally, rate cuts have been positive for hard assets like Bitcoin because they are inflationary, prompting capital to flow into assets that serve as stores of value. Contrary to historical expectations, both Bitcoin and traditional markets have rallied following the 50 basis point cut. Since the announcement, gold has reached new highs—up 4%—the S&P 500 has increased by 2%, and Bitcoin continues its bullish momentum with an 8% rise. This immediate reaction suggests that, despite historical precedents, the rate cut may be bullish for Bitcoin in the current economic landscape.

Market Update

Here is the fast five of what you need to know about the market in September 2024:

Bitcoin ends the month up 11% after recovering from an earlier 11% decline during the month
Toncoin recovers and re-enters the top 10 cryptocurrencies after previously falling out.
Ethereum is up 10%, while Solana continues to outperform Ethereum, closing the month up 20%.
Fantom rises 60% during September, gaining 35% since its first mention in our Morning Note.
Nervos Network (CKB) breaks into the top 100 after closing the month up 121%.

Video of the month

The Memecoin Supercycle

In the news

Caroline sentenced to 2 years for FTX fraud:

Caroline Ellison, a former top executive at the cryptocurrency exchange FTX and ex-girlfriend of its founder Sam Bankman-Fried, has been sentenced to two years in prison for her role in one of the biggest financial frauds in U.S. history. Ellison, 29, admitted to charges including wire fraud and money laundering as part of a plea deal and testified against Bankman-Fried, who received a 25-year sentence for stealing more than $8 billion from customers. She was ordered to forfeit over $11 billion to the court and may be required to pay additional restitution.

Blackrock leaning towards BTC over growing concerns surrounding the US Dollar:

BlackRock’s involvement has significantly boosted Bitcoin’s legitimacy and price, driving it from $30,000 to $74,000 after filing for a Spot Bitcoin ETF in late 2023. As institutional interest grows and concerns over the U.S. dollar rise, BlackRock's recognition of Bitcoin as "digital gold" further cements its role as a mainstream financial asset and a hedge against economic uncertainty.

Stormrake's Morning Note:

We have relaunched our Morning Note. These are quick 3-4 minute reads sent to your inbox 5-6 days a week. They recap the previous day's trading, key price levels for BTC and ETH, notable events, as well as the 'Stormrake Spotlight,' which focuses on a coin that we believe will perform well over the course of the week. Our two most recent picks have been FTM and ETH, both great choices.

Find our Morning Note here and be sure to subscribe: https://stormrake.substack.com/

Bitcoin and Ethereum ETF Performance:

During the week of September 23 to September 27, Bitcoin spot ETFs saw a net inflow of US$1.11 billion. BlackRock's ETF, IBIT, accounted for US$499 million of this inflow, while the 21Shares Bitcoin ETF, ARKB, received US$269 million.

In the same period, Ethereum spot ETFs experienced a net inflow of US$84.51 million. Grayscale's ETF, ETHE, had an outflow of US$127 million. Conversely, BlackRock's ETF, ETHA, saw an inflow of US$94.95 million, and Fidelity's ETF, FETH, attracted US$64.91 million.

Education

How Bitcoin is Mirroring the Internet's Boom:

Both Bitcoin and the Internet were initially dismissed by sceptics as fleeting bubbles destined to burst. Critics argued that the Internet was a passing fad, and in its early days, Bitcoin was often labelled a speculative asset with no intrinsic value. However, both technologies have defied these predictions, demonstrating resilience and sustained growth over time. The trajectory of Bitcoin's adoption closely parallels the early growth of the Internet, highlighting a transformative shift in how we perceive and utilise technology.

The similarities between the two extend beyond scepticism and into their adoption rates. In the 1990s, the Internet was a nascent technology, met with uncertainty and limited to niche communities. Similarly, Bitcoin began as an obscure digital currency understood and used by a small group of enthusiasts. Statistical comparisons reveal that Bitcoin's user base is expanding at a rate akin to Internet adoption during its formative years. It took the Internet approximately seven years to reach 100 million users; Bitcoin is on a similar path, with adoption accelerating due to increased accessibility and global connectivity.

This pattern suggests that Bitcoin could become as integral to everyday life as the Internet is today, fundamentally altering finance, commerce, and even governance. The development of supporting infrastructure plays a crucial role in this evolution. The Internet's growth was propelled by advancements in hardware, software, and network capabilities, making it more user-friendly and accessible. Bitcoin is experiencing a comparable evolution with the creation of user-friendly wallets, exchanges, and Layer 2 solutions like the Lightning Network, which enhance scalability and transaction speed.

Moreover, institutional adoption and regulatory clarity are legitimising Bitcoin, much like early Internet regulations helped foster trust and widespread use. As governments and major financial institutions begin to embrace blockchain technology, Bitcoin's position as a mainstream asset strengthens. This institutional support not only boosts confidence among individual investors but also paves the way for innovative financial products and services.

In essence, the adoption of Bitcoin is not just about a new form of currency but represents a paradigm shift in how we understand and interact with digital assets. Drawing parallels with the Internet's history provides valuable insights into Bitcoin's potential trajectory and the profound impact it may have on global economic systems. Both have overcome initial scepticism and accusations of being mere bubbles, solidifying their roles as transformative forces in the modern world.

Stormrake on Tour:

We are thrilled to announce two major events that our crypto brokerage is hosting and sponsoring in the coming weeks. Designed for investors and enthusiasts alike, these events offer unparalleled opportunities to gain insights into the evolving landscape of digital assets and alternative investments.

Beat The Reset: The Great Australian Roadshow (October 1 - 6)

Join us at "The Great Australian Roadshow" coming to a major city near you. Where our crypto brokerage will dive deep into market insights, cryptocurrency trends, and future opportunities in digital assets. The evening will also feature valuable insights into gold and precious metals, providing a comprehensive look at alternative asset classes and their future. It’s an ideal event for those looking to understand the broader economic landscape and explore diverse investment opportunities in a rapidly shifting financial world.

You can find tickets and detailed information about dates and locations below:

https://www.eventbrite.com.au/cc/the-great-australian-roadshow-3608699

Australian Crypto Convention: (November 23-24)

Our brokerage firm is excited to attend the upcoming Australian Crypto Convention in Sydney, a premier event for the digital asset industry. It’s a unique opportunity to gain the latest insights into cryptocurrency trends, blockchain technology, and investment strategies from leading experts. We’re pleased to offer our clients discounted tickets to join us at this highly anticipated event. Don’t miss out on exclusive networking opportunities, cutting-edge discussions, and the chance to stay ahead in the evolving world of crypto.

Find the tickets below: