Price of ether rises due to BlackRock call

In recent weeks, bitcoin was far ahead in the battle. Most other currencies lagged behind. But last Thursday, that changed. The price of ether shot up 10 per cent. How so? That, and more, in this Weekly!

This Weekly in brief

• Market: There is infectious optimism in the crypto market. This week, the bitcoin price is 100 per cent higher than a year earlier for the first time in a long time.
• News: BlackRock applied for a spot ether ETF. The price of ether jumped 10 per cent as a result. The SEC may give a ruling on pending spot bitcoin ETF applications this week.
• Behind the scenes: With Amdax Trend, you automatically invest in a selection of altcoins from the top 20, ranked by market value. This way, you benefit from rising prices. Do they fall again? Then the positions taken will be sold automatically.

Cryptomarket

The heatmap below shows that the crypto market as a whole performed fine last month. Bitcoin leads, and ether follows not too far behind. But the rest are also largely green.

The green on the chart symbolises a general optimism in the crypto market. It also represents the change from despondency to hope in the market cycle we wrote about in last week's Weekly.

For most assets with green numbers, they did just a little bit worse than bitcoin. As a result, so-called bitcoin dominance, the share of total market value held by bitcoin, rose. But there are exceptions. Solana, for instance, is on a plus of 134 per cent and chainlink recorded 90 per cent gains in a month. However, there is no sign of a full-fledged alt season (yet).

When asked whether a new bull market has arrived, a modest answer is appropriate. In the context of complex systems, such as financial markets, there are no certainties. That is why we often talk about different possibilities and perspectives. Our basic current scenario is that we have entered a new phase in the market cycle.

A pressing question then, of course, is what the coming market cycle will look like. In the neutral scenario, it resembles the previous cycles. Below is the chart of bitcoin over the past 11 years showing three market cycles.

At the bottom is bitcoin's year-on-year price change. In 2015, 2019 and 2022, it was negative (red). In those years, the price was lower than a year earlier. Since June this year, we have been back in positive territory (orange). And since this week, we are back above 100 per cent price appreciation in a year (yellow).

The sensational stretch of the bull market played out each time with a year-on-year rise of more than 250 per cent (green). Previous times, it always took about a year for us to go from the first time yellow to the first time green.

Can this time be different? Obviously, in two ways.

It could go earlier, fiercer and higher than previous times. This scenario needs a catalyst, such as a confluence of the arrival of ETFs, the halving, the US presidential election and geopolitical and monetary conditions.

It could also go later, weaker and lower than previous times. This would require setbacks such as cancelled ETFs and a deep, severe recession. In the most extreme case, the top of this market cycle could even remain below the all-time high of $69,000.

All in all, an optimistic picture emerges. In doing so, we note that the data we rely on is all retrospective. It tells us that the recent price rise is not hot air, and is supported in various ways. It does not tell us that the price will continue to rise. That depends on what new information the market has to digest in the coming time!

News summary

On Thursday, the world's largest asset manager filed an application with the regulator for a spot ether ETF. In it, BlackRock reiterates an argument considered decisive in spot bitcoin ETF applications:

The price of ether reacted immediately to the news. With a rise of a good 10 per cent, the price broke the $2,100 mark, making up for all the losses against bitcoin in the previous four weeks. Some of those gains have been handed back to the currency; currently ether is going from hand to hand for around $2,000.

There is little point in guessing the outcome of this application at this point. First, the SEC will rule on the fate of bitcoin ETFs. Bloomberg's ETF watchers still give the odds of approval 90 per cent. In endorsing that assessment, James Seyffart reported something striking on Wednesday.

Most analysts assume that the SEC will pass judgment on all pending applications at once. This will prevent the regulator from giving preferential treatment to specific funds. Seyffart wrote that an eight-day period begins on 9 November during which the SEC can make a decision on all applications now hoping for approval. In other words, áf the SEC wants early approval of all funds at once, it should happen this week.

We will keep a close eye on it!

Other news: 

• Tax authorities will exchange information on crypto assets with foreign tax authorities. On Friday, 47 countries underlined their participation in the implementation of the Crypto-Asset Reporting Framework (CARF). This international standard describes the automatic exchange of data on crypto assets. "In this way, countries together ensure that everyone pays taxes neatly," writes our central government. The Netherlands intends to start the programme in 2027.
• Trading in NFTs is cautiously increasing. The bottom prices of leading NFT collections such as CryptoPunks, Bored Ape Yacht Club and Azuki have risen significantly, with an increase of up to 107 per cent in dollar value. In addition, DappRadar reported a 32 per cent increase in trading volume, from $306 million in September to $405 million in October. Despite the upward trend in some NFT collections and overall trading volume, the market remains volatile and unpredictable.
• Major Japanese asset manager opens Web3 fund for start-ups. According to SBI Holdings, the fund is focused on Web3, AI, and metaverse-related initiatives. In total, SBI expects to put 100 billion yen at work, equivalent to about $650 million. That money will come from domestic and regional banks, among others. Half of the targeted capital has already been committed. In the United Arab Emirates, SBI is opening a $100 million crypto fund together with Standard Chartered.