1. Market Movements
For October cryptoasset markets boomed with Bitcoin (BTC) and Ethereum (ETH) both up 42% (Table 1).
Table 1: Price Performance: Bitcoin, Ethereum, Gold, US Equities, USD, Long-dated US Treasuries
Sources: Blockchain.com, Google Finance
A major catalyst for crypto this month was the launch of a long anticipated Bitcoin ETF, which was at last approved by the US Securities and Exchange Commission and helped bitcoin make a new all-time high of ~$68k.
Strong ongoing demand for NFTs and DeFi activity, along with growing institutional interest, also helped to recently push Ethereum into new all-time territory as well at ~$4600.
Every crypto dog has its day
While BTC and ETH are driving further institutional crypto adoption, the real standout crypto performers of late have been some dog-themed meme coins, particularly Shiba Inu (SHIB). SHIB was up ~300% for the month of October and briefly overtook the previously reigning top crypto pooch coin, Dogecoin (DOGE).
With a current market cap of $25 billion, SHIB is more valuable than UniSwap (UNI), Polygon (MATIC), Avalanche (AVAX), Algorand (ALGO), and a number of other notable cryptoassets.
While it may be tempting to take a cynical view of the rise of dog-themed coins, their success speaks to the incredible importance of the social aspects of money. Narratives and storytelling have always played a role in not just money, but anything that requires uniting people around a shared enterprise.
With that said, those speculating on dog-themed or other meme coins must be mindful of how quickly the winds can shift. Any given meme-driven phenomenon is at risk of being out-memed by something new, and this can happen rather quickly.
2. On-Chain Analysis
Each month we dive into on-chain data to explore interesting trends or movements on the Bitcoin network.
On a monthly basis, overall bitcoin on-chain activity increased in the month of October (Table 2).
Table 2: October vs September bitcoin on-chain network activity
Despite seeing a slight slowdown in the percentage of Bitcoin transactions (-1.4%) and overall Bitcoin payments (-3.0%) from Blockchain.com this month, the average number of overall daily transactions has increased (7.4%) with the average number of daily payments also gaining 9.2% on last month.
As we discussed on the webinar, one major difference between past major price rallies like we saw in October and this time is the impact on fees. While a 27% month-over-month increase in fees is significant, this pales in comparison to past periods when major price spikes would send fees dramatically (multiples) higher.
We believe the relatively muted response in average fee price to the recent price rally underscores the real scaling and efficiency progress made by bitcoin with the broadening adoption of Segregated Witness (SegWit) and layer 2 networks like Lightning, and transaction batching.
However, it also underscores how much more bitcoin activity (ie trading) is happening off-chain on centralized exchanges.
3. What we’re reading, hearing, and watching
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