Every week, Amdax summarizes what’s happening in the crypto market for you. Want to dive deeper? Click on the links in this email for more insights.

This newsletter is a co-production with our partner, Bitcoin Alpha.    

Market update

Stay informed in three steps:

1. Calm returns, but investors remain cautious

The crash of October 10th has not yet been fully digested by the market. Bitcoin is trading between $103,500 and $114,000, while ether also continues to move sideways. The market appears more stable, but confidence remains fragile. Investors are recovering from the shock and prefer to wait for confirmation that the worst is truly behind them.

2. On-chain data point to a cautious recovery

Beneath the surface, the market structure shows signs of improvement. Many traders closed their positions after the crash, while others speculated on further declines. This was visible in the derivatives market: leveraged traders were, on average, positioned short over the past week. That pressure is now easing, suggesting that balance is gradually returning. The market looks calmer and less vulnerable to sudden shocks.

3. Capital still seeks other paths

Traditional markets tell a different story than the crypto space. The Russell 2000, which mainly includes smaller U.S. companies, recently reached new records. Gold also continued to rise, while bitcoin continues to fall behind. For now, investors favor assets with momentum. Once that cools off, attention may once again shift toward crypto.

News overview

The key headlines from this week:

• Luxembourg invests state funds in bitcoin. The national fund FSIL is putting 1 percent of its portfolio, about eight to nine million euros, into bitcoin via regulated ETFs. This makes Luxembourg the first country in the eurozone to include bitcoin in a state fund. According to treasury director Bob Kieffer, the move reflects the maturation of this asset class and confirms Luxembourg’s ambition to lead in digital financial innovation. 

• Bitwise sees financial advisors shifting toward crypto. According to the asset manager, crypto now comes up in every client conversation. Investment advisors see clients of all ages showing interest and are even reallocating capital from large cap stocks such as Apple and Nvidia to bitcoin and ether. Bitwise says crypto now represents 1 to 15 percent of many portfolios. 

• Erebor gets the green light as the first fully fledged crypto bank in the United States. For the firat time, the OCC has granted a national bank charter to a bank born from the crypto world. Erebor, founded with backing from tech billionaires Peter Thiel, Joe Lonsdale, and Palmer Luckey, will be allowed to make loans and process payments like ordinary banks. In doing so, it fills the gap left by Signature and Silvergate. 

• U.S. Bank sets up a new crypto division. The fifth largest bank in America is starting a unit for stablecoins, tokenization, and digital payments. With the Digital Assets and Money Movement department, U.S. Bank aims to accelerate the issuance and custody of digital assets. Once again, a major player signals that crypto assets are no longer a niche but part of mainstream banking. 

• Ripple Labs wants to raise 1 billion dollars for an XRP treasury. Through a SPAC, the company intends to set up a fund that holds and manages XRP, partly filled with its own tokens. The timing could be better. The shares of so called treasury companies have performed poorly in recent months, which has made investors cautious. Even so, Ripple is pressing ahead in an effort to position XRP as a serious corporate reserve asset. 

• Ethereum remains developers’ favourite. According to new data from Electric Capital, Ethereum attracted more than sixteen thousand new developers this year, more than any other network. That is notable, because the total number of developers working in crypto has fallen worldwide. Electric Capital says the combination of mature tools, a strong community, and vibrant layer two networks makes the ecosystem more attractive than ever. 

Amdax's take

Those who only look at prices see a market moving sideways. Beneath the surface, however, more is happening than ever. While investors temporarily turn to gold and equities, governments and banks are making the move toward digital assets. Luxembourg is investing state funds in Bitcoin, U.S. Bank is establishing its own crypto division, and the first fully fledged crypto bank has received the green light in the United States.

These developments show that adoption does not stall when the market cools, quite the opposite. For investors, it is a reminder that market movements are temporary, but adoption continues to grow steadily.