The Rake Review: September 2024

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, 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.

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.

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 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.

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.

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.

Written by Alexandar Artis

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