2024-10-04 12:39

The news seems likely to further cement ideas that the Fed will trim rates just 25 basis points at its next policy meeting in November. Jobs data for September was far stronger than expected. The chances for a 50 basis point rate cut in November all but vanished. Already down on the week, the price of bitcoin is holding up following the data, with one analyst suggesting the risk of a sharp economic downturn has been removed from the market. The employment picture in the U.S. heated up in September, with the government reporting the addition of 254,000 jobs last month, flying past economist estimates for just 140,000. In addition, August's previously reported 142,000 job gain was revised higher to 159,000. The unemployment rate slid to 4.1% from 4.2% in August and versus forecasts for 4.2%. Bitcoin (BTC) was changing hands at $61,500 in volatile action shortly following the release of the report, up nearly 1.5% over the past 24 hours. Prices remain sharply lower from week-ago levels above $66,000 as an overbought market over the past five days got hit with some unwelcome macro news, including an escalation of the war in the Middle East. "A robust U.S. economy reduces uncertainty, particularly with the upcoming U.S. election, and this bodes well for bitcoin, removing one of the key risks looming over the market," said CoinDesk analyst James Van Straten. Checking other report details, average hourly earnings rose 0.4% in September, beating forecasts for 0.3% and down from 0.5% a month earlier. On a year-over-year basis, average hourly earnings were higher by 4.0% versus estimates for 3.8% and August's 3.9%. Recent economic data – including yesterday's ISM Services report and Wednesday's ADP jobs data, both of which came in far stronger than expected – along with comments earlier this week from Federal Reserve Chairman Jerome Powell have led traders to pare back expectations for a second consecutive Fed 50 basis point rate cut at the bank's next policy meeting just after the November elections. Prior to this morning's numbers, short-term rate markets had priced only a 30% chance of a 50 basis point move and a 70% chance of just a 25 basis point cut, according to CME FedWatch. In the minutes after the data, those 50 basis point odds had tumbled to just 11%. Looking at traditional markets following the strong report, U.S. stock index futures have added to gains, with the Nasdaq 100 now higher by 0.8%. The U.S. 10-year yield has shot higher by eight basis points to 3.94% and the dollar index has jumped by a sizable 0.5%. The price of gold has dipped 0.5% to $2,665 per ounce. https://www.coindesk.com/markets/2024/10/04/us-added-blowout-254k-jobs-in-september-unemployment-rate-dips-to-41/

2024-10-04 11:27

According to BCA Research, generating large bullish "credit impulses" is now a tough task for China. China's latest stimulus appears sanguine compared to the 2015 cycle, according to BCA Research. The housing market bust limits China's ability to generate bullish "credit impulses." The credit impulse is in a structural downtrend, since peaking at 25% in 2008. China has recently unveiled a raft of stimulus measures, the biggest since 2008, torching a rally in Chinese stocks and risk assets worldwide, including bitcoin. Most crypto analysts expect the Chinese stimulus and the Fed rate cuts to power bitcoin (BTC) to $100,000 in the coming months. However, BCA Research argues the risk-on rally may not have legs as China's latest stimulus falls short of generating significant bullish "credit impulses" as it did in the past two decades, including in 2015. Credit impulse refers to the flow of new credit issued through loans and other debt instruments as a percentage of gross domestic product (GDP). Since the 2008 crash, analysts have closely tracked China's credit impulse as a leading indicator of economic growth and risk-on rally worldwide. Renewed upswings in the indicator have historically coincided with bitcoin bear market bottoms. The credit impulse peaked at 15.5 trillion yuan during the last major bullish easing cycle dated 2015, equating to 15% of the GDP. Back then, the Chinese stocks, represented by the CSI 300, more than doubled in six months and BTC found a bottom near $100, turning higher for a two-year bull run that peaked near $20,000 in December 2017. Since then, China's economy has doubled in terms of nominal GDP, which means the credit impulse during the current cycle needs to peak at 27 trillion yuan to have a similar bullish impact on the economy and markets. However, the most recent peak in the credit impulse was less than 5 trillion yuan. So, to match the 2015 episode, the latest measures would "need an amplitude five times greater than the most recent peak," BCA Research said in a note to clients on Oct. 2. Reversing the downtrend in the credit impulse might be easier said than done because factors that drove it higher initially, such as the housing market boom, are no longer present. "Through 2000-2020, when China's housing boom was in full swing, it was possible to channel the exponential credit curve into the housing and construction boom, But now, absent an alternative destination for the productive use of credit of the same magnitude, it will be difficult to generate those same monster credit impulses," BCA's analysts said. https://www.coindesk.com/markets/2024/10/04/attention-bitcoin-bulls-china-stimulus-may-have-lost-its-mojo/

2024-10-04 09:05

Polymarket bettors are also confident that this won't be the smoking gun. An HBO documentary premiering next week claims to reveal the true identity of Bitcoin's anonymous creator, Satoshi Nakamoto. Bettors on Polymarket are putting their money behind Len Sassaman being who the doc names. A new HBO documentary from Emmy-nominated Cullen Hoback, director of Q: Into the Storm, which unveiled who was behind the QAnon Conspiracy Theory that dominated 4chan during the 2016 election, promises to name who Satoshi is. Polymarket bettors think that Len Sassaman will be the person the documentary names. Sassaman, who took is own life in 2011 after a battle with depression, is thought to be Satoshi because of his long history of published academic works regarding cryptography which often showed his strong ideological commitment to privacy and decentralization. Adding to the speculation that Sassaman is Satoshi is the date of their respective disappearances. Sassaman took his life shortly after Satoshi stopped posting on BTCTalk, once the go-to destination for crypto discussions. This isn't the first attempt to unmask the pseudonymous creator of the world's largest digital asset. In 2014, Newsweek claimed to have found Satoshi by scouring a database of naturalized U.S. citizens. The publication tracked down Dorian Prentice Satoshi Nakamoto, who uses the preferred name Dorian S. Nakamoto. Nakamoto lives in California and is a naturalized U.S. citizen of Japanese ancestry who matches most of the criteria of a potential Satoshi: a background in math as well as engineering, a reclusive nature, and an initial refusal to discuss the topic. "I am no longer involved in that, and I cannot discuss it," is how Nakamoto answered the Newsweek's reporter's initial questions, which garnered suspicion, followed by "It's been turned over to other people. They are in charge of it now." Eventually, through lawyers, Nakamoto provided a flat denial that he was Satoshi. "I did not create, invent or otherwise work on Bitcoin. I unconditionally deny the Newsweek report," his counsel wrote. Bettors are also giving thought to the big reveal possibly being someone else who's not known in the crypto industry, putting a 32% chance on it being someone else or multiple people. But another contract on the prediction market site is giving an 89% chance to Satoshi's identity not being definitely proven in 2024. https://www.coindesk.com/tech/2024/10/04/polymarket-bettors-say-hbo-documentary-will-name-len-sassaman-as-satoshi-nakamoto/

2024-10-04 08:17

Geopolitical risk and the upcoming U.S. election are likely to reinforce the 'debasement trade,' to the benefit of both bitcoin and gold, the report said. Bitcoin and gold to benefit from growing geopolitical tension and the U.S. election, the report said. JPMorgan said a Trump election win would likely reinforce the 'debasement trade.' Markets have not yet priced in a Trump victory, the bank said. Geopolitical tension and the upcoming U.S. presidential election will likely underpin the 'debasement trade,' and this favors both bitcoin (BTC) and gold, JPMorgan (JPM) said in a research report on Wednesday. "A Trump win in particular, apart from being supportive of bitcoin from a regulatory point of view, would likely reinforce the 'debasement trade' both via tariffs (geopolitical tensions) and via an expansionary fiscal policy ('debt debasement')," analysts led by Nikolaos Panigirtzoglou wrote. Markets aren't pricing in a victory for the former president just yet. The chances of a Trump election win are currently priced in with a low probability looking at other asset classes other than gold and bitcoin, the report said, adding that this is because investors have been preoccupied with the recession trade in recent months. If the "Trump trade" plays out in a similar way to 2016, there should be higher U.S. Treasury yields, a stronger dollar, U.S. stock market outperformance, in particular banks, and tighter credit spreads, JPMorgan said. This shift has not happened yet, with only a small move higher seen in these markets. JPMorgan noted that in the six month window around the 2016 American election, 5-year Treasury yields rose 1%, the Dollar Index (DXY) surged 8%, U.S. equities outperformed to the tune of 6%, banks beat the rest of of S&P 500 stock index by 15% and high grade corporate credit spreads tightened significantly. Bitcoin is not a safe haven against geopolitical risks, investment bank Standard Chartered said in a report yesterday. https://www.coindesk.com/markets/2024/10/04/bitcoin-gold-could-benefit-from-rising-geopolitical-tension-and-us-election-jpmorgan/

2024-10-04 06:55

BTC's implied volatility curve shows a noticeable kink on Oct. 5, signaling expectations for an unusually volatile Saturday. BTC's options expiring on Oct 5 trade at higher implied volatility (IV) compared to Oct. 25 options. The so-called IV kink points to a unusually volatile weekend. Traders seem to bracing for price turbulence post Friday's NFP and potential retaliatory strikes by Israel. The bitcoin (BTC) bull run since October last year has seen mostly quiet weekends, but that's about to change, according to a key metric. At press time, bitcoin's "implied volatility term structure" indicates bigger price swings on Saturday (Oct. 5) than on days leading up to Oct. 25, according to Deribit options data tracked by Arbelos Markets. The term structure is a graphical representation of options-determined implied or expected volatilities (IV) at different expiration dates. It is usually upward sloping, with longer duration options trading pricer in terms of implied volatility relative to short duration ones. However, as of writing, the curve exhibited a kink, with options expiring on Oct. 5 trading at an annualized IV of 51.44%, notably higher than options expiring on Oct. 6, Oct. 11, Oct. 18, and Oct. 25. In other words, traders are pricing more significant price swings for Saturday, possibly anticipating increased volatility following Friday's nonfarm payrolls (NFP) release and amid geopolitical tensions, according to Joshua Lim, co-founder of Arbelos Markets. "There's a very noticeable kink in the vol curve – Friday (Oct. 4) is trading around 39 vol and Saturday (Oct. 5) is trading 51 vol. The market is pricing in a risk premium from nonfarm payrolls data, but more importantly, some probability of an Israeli retaliation post-Rosh Hashanah," Lim told CoinDesk. Focus on payrolls The U.S. Bureau of Labor Statistics will release the NFP on Friday at 12:30 UTC. Per FXStreet, the data is expected to show that the economy added 140,000 jobs in September, following August's weaker-than-expected increase of 142,000. The jobless rate is forecast to hold steady at 4.2%, with the year-on-year growth rate of average hourly earnings matching August's pace of 3.8%. According to ING, risks are skewed in favor of hawkish repricing of 25 basis points Fed rate cuts in November and December and dollar strength unless the data misses expectations big margin. The Fed cut rates by 50 basis points (bps) last month, torching a rally in risk assets, including BTC. Currently, markets expect at least another 50 bps cut by the year-end. "The pricing for year-end Fed funds continues to largely embed a 50 bps cut in either November or December, meaning room for further re-alignment with the Fed’s less dovish rhetoric and consequently upside risks for the dollar. We sense that the bar for a dollar-negative reaction to U.S. data today and tomorrow is probably higher after Fed Chair Jerome Powell’s recent pushback against 50 bps reductions," ING said in a note to clients. A stronger dollar often weighs over risk assets, including BTC and traditional safe havens like gold. Volatile middle east situation On Oct 1, Iran fired at least 180 ballistic missiles at Israel, ratcheting up tensions and risk of a full-blown war and leading to a broad-based risk aversion. BTC dropped over 4% on the same, eventually testing the $60,000 support. Per ING, investors are now on high alert, awaiting Israel's retaliation against Iran, leading to a rally in crude prices and a stronger dollar index. A potential action over the weekend, when traditional markets are closed, could see both traditional and crypto traders express their views in the digital assets market, leading to an unusually volatile weekend. https://www.coindesk.com/markets/2024/10/04/bitcoin-set-for-unusually-volatile-weekend-after-fridays-payrolls-data-volatility-kink-indicates/

2024-10-04 06:35

Most gains for bitcoin come in the latter part of the month. Bitcoin dipped below $60,000 briefly, leading to $144 million in bullish position liquidations, despite historical data suggesting October as its strongest month with gains averaging 22% since 2013. Social sentiment on platforms like X reflects bearish views on Bitcoin's price recovery. Rising oil prices due to Middle East tensions shift investor focus towards commodities like oil and gold, impacting risk asset sentiment, including Bitcoin. Polymarket bettors show mixed feelings on Bitcoin's price direction but lean towards a range-bound movement for October. Bitcoin’s (BTC) poor start to its historically most bullish month since 2013 continued as the asset briefly slid under $60,000 late Thursday, before recovering, causing over $144 million in bullish crypto bets liquidated. BTC traded just over $61,300 to remain flat over the past 24 hours despite a volatile U.S. trading session. Ether (ETH), BNB Chain’s BNB and XRP (XRP) showed losses up to 2%, while memecoin dogecoin (DOGE) was up 2% on no immediate catalyst. The CoinDesk 20 (CD20) index, which measures the largest tokens by market capitalization, was down 1%. Bitcoin is down over 6% since the start of October, data shows, a month that has only twice ended in the red since 2013 - chalking gains of as high as 60% and an average of 22% to make it the most best for investor returns. That has dented social sentiment on X, with some users being bearish about price recovery. Polymarket bettors have mixed opinions on where BTC’s price will move in October. While they have ruled out an attempt at $70,000, bettors are more confident that bitcoin will be range bound between $57.5K and $65K. However, CoinGlass data shows that most gains appear in the latter part of the month, while the first week is generally bearish - meaning current price action still remains in line with historical movements. The second and third days of October have ended in green just six times since 2013, before recovering in the second week and large movements generally in the third week. Price jumps of as high as 16% generally appear after October 15. That’s just the data, though. Fundamental and macroeconomic factors ultimately weigh on trading sentiment for risk assets, such as bitcoin – and tensions in the Middle East have shifted investor interest to oil and gold. Global benchmark Brent oil had its most significant one-day jump in almost a year and is on track for an 8% weekly gain since early 2023. Looking at macroeconomics for a moment, markets were shook earlier this month by geopolitical tension in the middle east. Bettors on Polymarket are giving a 63% chance that Israel will strike Iranian oil facilities in October, but only a 35% chance that they will hit Iran’s nuclear facilities. The U.S. presidential election is looking as close as ever on Polymarket, with the two candidates either briefly tying the race or fighting over a 1 percentage point lead. Donald Trump-themed TREMP, a Solana meme coin named after the Republican candidate, is up 14%, while the original MAGA Trump token is flat, according to CoinGecko data. The Kamala Harris-themed KAMA token is down 7.5%. https://www.coindesk.com/markets/2024/10/04/bitcoins-poor-start-to-bullish-october-continues-but-there-may-be-cheer-ahead-for-bulls/