UNDER PRESSURE
Despite Bitwise’s recent ETF filing for XRP, the cryptocurrency is currently experiencing uncertainty and a potential downward trend due to regulatory issues. The U.S. Securities and Exchange Commission (SEC) has appealed against Ripple’s ruling, and this has instilled doubt among investors, leading to a 16% drop in XRP’s value this week. In addition, XRP’s classification as a security has raised concerns as securities are subject to stricter regulations and require more transparency from companies. As a result of these developments, options traders are showing a bearish bias towards XRP compared to Bitcoin and Ether, with funding rates in the XRP futures market indicating a negative sentiment. This negative outlook is reflected in the options market, where there is a higher demand for protective puts against price declines. Ultimately, as of now, there is a pessimistic outlook for XRP and its potential for price growth in the near future.
OUTSHINING RIVALS
The competitive landscape of Bitcoin exchange-traded funds (ETFs) has seen Grayscale’s Bitcoin Trust (GBTC) emerging as a standout performer in terms of income, outpacing its rivals despite a shifting market dynamic. With nearly $14 billion in assets under management, GBTC has been able to generate an annual income of approximately $205 million, significantly surpassing its competitor IBIT, which manages $17 billion in assets and earns only $42.5 million annually. This financial disparity can be attributed to the funds’ respective expense ratios, with GBTC maintaining a lower ratio of 1.5% in comparison to the industry average below 0.40%. While investors are exploring alternatives with lower costs, GBTC’s longstanding presence and competitive edge in the market have enabled it to sustain inflows and maintain a strong position within the industry. Currently, GBTC holds $13.65 billion in assets and 220,000 bitcoin, while IBIT manages $17 billion in assets and holds 366,000 bitcoin.
DECLINES DESPITE TENSIONS
Gold prices have decreased as investors adjusted their expectations for a potential November rate cut by the Federal Reserve. Let’s remember that the latest ADP data showed stronger private payrolls, which signals that the current labor market is stable, and this news led to a decrease in bets for a 50-basis-point rate cut next month. Consequently, although the latest geopolitical tensions between Israel and Iran-backed Hezbollah boosted gold as investors seek safe-haven buying, concerns about less aggressive rate cuts tempered gains. Furthermore, other precious metals like silver, platinum, and palladium have also experienced declines, and attention now turns to the upcoming U.S. non-farm payrolls report, which could impact precious metals prices further.
UNEMPLOYMENT SURGE
Last week, new applications for unemployment benefits in the U.S. increased slightly to 225,000, a figure above economists’ expectations of 220,000 claims. Despite the actual data being above expectations, the job market seems stable with low layoffs, nevertheless, events like Hurricane Helene and strikes at Boeing and ports could disrupt this. Let’s highlight that hurricane Helene caused destruction in several states and the recovery is expected to be costly, ans strikes at Boeing and ports may lead to temporary layoffs and affect businesses relying on them.
INTERNATIONAL NEWS
The British pound has experienced a significant drop against the U.S. dollar and euro after Bank of England Governor Andrew Bailey raised the possibility of interest rate cuts due to positive inflation data. Bailey’s comments hinted at a more aggressive approach to monetary policy if inflation remains robust. This news caused market instability, with sterling reaching its lowest level since September. Additionally, Bailey highlighted risks from geopolitical tensions and oil price fluctuations, signaling a complex economic landscape that could influence future policy decisions. Overall, market reactions suggest a potential shift towards a more dovish monetary policy stance in the U.K. amidst global economic challenges.
