BITCOIN, FED & WAR
Updated
From Wen lambo to Wen WW3 ! 🚀
If you're wondering why your portfolio feels like it's been caught in the new Twister movie, you're not alone. the entire broader financial market has entered correction territory, and it's a volatile ride out there. Buckle up as we dive into the chaos
1/ Reverse carry unwinding: The Japanese yen 💹
The Bank of Japan pulled a move we haven't seen in 30 years by increasing interest rates.
This tiny 0.25% hike putt a major kink in the popular reverse carry trade strategy, sending the Yen's value soaring against the USD, For those new to the game, the strategy involved borrowing Yen at a rock-bottom 0% interest rate and reinvesting in USD for a 5% yield.
2/ Jump Crypto
Ethereum plummeted 20% faster than you can say "overleveraged" (if that takes you 3 minutes)
Why is
ETH feeling the heat the most? Well, Jump Crypto has been liquidating their ETH stack for over 11 days…Jump Trading recently redeemed $410 million worth of 120,000 wstETH into ETH and then transferred it to CEXs such as Binance and OKX.these trades might be part of a liquidation process as the proprietary trading firm prepares to wind down its crypto operations following its former CEO’s resignation amid a probe by the United States Commodity Futures Trading Commission
Jump Crypto shifted hundreds of millions ofETH and 
USDT into centralized exchanges
Rumor also has it they're exiting the crypto biz amid an investigation!
The Japanese Yen and Jump had a huge effect on crypto but they weren’t alone. Here are the other reasons we’re seeing fear in the markets.
3/ Geopolitical tensions/ WW3 Fud 🇮🇷 🇺🇲
IRAN vs Israel again: Ismail Haniyeh is assassinated in Iran by an alleged Israeli strike and things are heating up, with fears of a global conflict bubbling. Russian military planes were sent to Iran for support and US sends more troops to Middle East to support Israel as well
Keep your eyes on the news this week cuz it can impact markets further
US Politics: Kamala is closing in on Trump's lead, according to Polymarket odds. The market had already started to price in a Trump win, but now? Not so sure, and the market is feeling that
4/ Recession fears: All eyes on the FED ✂️
Job numbers came in below expectations, unemployment ticked up, and The Sahm Rule was triggered .wtf is a Sahm Rule? The Sahm rule is an early recession indicator.Since 1950, the Sahm rule has indicated only one false positive (in 1959), and even then, six months later the US had entered a recession.
A 50 basis point rate cut for September was off the table, but now?
Some are shouting, "We're too late already! Emergency cut now!"
Rumors are swirling that the FED may have an emergency meeting this week…
We got no cut in July, but the case for it just got a whole lot juicier.
Bad earnings and political/geopolitical uncertainty have pummeled the stock market back to 2020 levels, $2 T was erased from the stock market
Meanwhile Warren Buffet sold 56% of his Apple stock and with $235 billion,now holds more US Treasury Bills than the Federal Reserve! Elon just called him a FED too! Cash is not trash after all.
If you're wondering why your portfolio feels like it's been caught in the new Twister movie, you're not alone. the entire broader financial market has entered correction territory, and it's a volatile ride out there. Buckle up as we dive into the chaos
1/ Reverse carry unwinding: The Japanese yen 💹
The Bank of Japan pulled a move we haven't seen in 30 years by increasing interest rates.
This tiny 0.25% hike putt a major kink in the popular reverse carry trade strategy, sending the Yen's value soaring against the USD, For those new to the game, the strategy involved borrowing Yen at a rock-bottom 0% interest rate and reinvesting in USD for a 5% yield.
2/ Jump Crypto
Ethereum plummeted 20% faster than you can say "overleveraged" (if that takes you 3 minutes)
Why is
ETH feeling the heat the most? Well, Jump Crypto has been liquidating their ETH stack for over 11 days…Jump Trading recently redeemed $410 million worth of 120,000 wstETH into ETH and then transferred it to CEXs such as Binance and OKX.these trades might be part of a liquidation process as the proprietary trading firm prepares to wind down its crypto operations following its former CEO’s resignation amid a probe by the United States Commodity Futures Trading CommissionJump Crypto shifted hundreds of millions of
ETH and USDT into centralized exchangesRumor also has it they're exiting the crypto biz amid an investigation!
The Japanese Yen and Jump had a huge effect on crypto but they weren’t alone. Here are the other reasons we’re seeing fear in the markets.
3/ Geopolitical tensions/ WW3 Fud 🇮🇷 🇺🇲
IRAN vs Israel again: Ismail Haniyeh is assassinated in Iran by an alleged Israeli strike and things are heating up, with fears of a global conflict bubbling. Russian military planes were sent to Iran for support and US sends more troops to Middle East to support Israel as well
Keep your eyes on the news this week cuz it can impact markets further
US Politics: Kamala is closing in on Trump's lead, according to Polymarket odds. The market had already started to price in a Trump win, but now? Not so sure, and the market is feeling that
4/ Recession fears: All eyes on the FED ✂️
Job numbers came in below expectations, unemployment ticked up, and The Sahm Rule was triggered .wtf is a Sahm Rule? The Sahm rule is an early recession indicator.Since 1950, the Sahm rule has indicated only one false positive (in 1959), and even then, six months later the US had entered a recession.
A 50 basis point rate cut for September was off the table, but now?
Some are shouting, "We're too late already! Emergency cut now!"
Rumors are swirling that the FED may have an emergency meeting this week…
We got no cut in July, but the case for it just got a whole lot juicier.
Bad earnings and political/geopolitical uncertainty have pummeled the stock market back to 2020 levels, $2 T was erased from the stock market
Meanwhile Warren Buffet sold 56% of his Apple stock and with $235 billion,now holds more US Treasury Bills than the Federal Reserve! Elon just called him a FED too! Cash is not trash after all.
Note
In the grand history of crypto, this weekend’s pullback was more of a gentle hiccup than a full blown catastrophe.
If you’re new to the crypto rodeo, here’s the deal:
Crypto markets are notorious for those agonizing 70-90% pullbacks during bear markets like a bad hangover after a wild party. But hey, even bull markets love a good plot twist with quick and sharp pullbacks. It's part of the game!
To ride these crypto waves and snag those sweet, sweet gains, you’ve got to make peace with the volatility. The secret sauce to surviving these market jolts is zooming out.
When you see your portfolio take a dive, take a step back and remember: these swings are as normal as your morning cup of joe.
That’s why we’re going to hop into our time machine and revisit some of the biggest drops from previous bull markets
1/ 2011-2013 bull market
Back in the day (2013), when
BTC was just a wee lad, we saw a gut-wrenching dip of 82%! Ouch, right? BUT, hold your horses because BTC then went on to skyrocket 15x before the end of the yearNote
2/ 2015-2017 bull market
Fast forward to the next thrilling journey.
In 2015 and 2016, Bitcoin served up a triple dip whammy: a 37% sell off, a 41% nosedive, and another 40% dip. And 2017 wasn’t any different…
This year tested investors' nerves with four pullbacks of at least 30%.
Many sold in fear, only to buy back in higher…
But those who held from the beginning of 2015 through to the end of 2017 saw
BTC climb from around $300 to almost $20,000
That’s a 66x return
Note
3/ 2019-2021 bull market
Still not convinced? Let's go through one more epic run.
Between July 2019 and March 2020
BTC saw corrections of 53% and 63%
Just months later,
BTC began its rise from $4,000 to $69,000.
That’s finding some serious gains by not giving up in a pullback!
Interestingly, the above chart from 2020 looks eerily similar to what has transpired here in 2024: a long drawn out pullback, a recovery and then another quick and sharp pullback. Bitcoin ended up doing a 17x from it’s low last time, we wonder what will happen this time around.Whatever happens, when we look back at historical pullbacks during bull runs, it almost always pays off to hold through them
Note
3 days of big outflows in the BTC ETF recently. However, today's net inflow for $ IBIT is +897 BTC (+53M)Note
Iran warns airlines to avoid its airspace for 3 hours on Thursday over military drillsNote
Russian President Vladimir Putin signed a bill that officially legalizes cryptocurrency mining. Mining is considered part of the circulation rather than the issuance of cryptocurrency. Individuals who do not exceed the energy consumption limit set by the government can mine without registration.Trade active
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BlackRock's two funds (IBIT and ETHA) have a combined assets under management (AUM) of $21.6 billion, slightly higher than the $21.3 billion held by Grayscale's four funds (GBTC, BTC Mini, ETHE and ETH mini). BlackRock's cryptocurrency ETF is now the largest holding of all providers.Trade active
Another $ 1B USDT minted on TRON DAO by Tether, adding to the $ 33B total minted in the last year.Trade active
Russia launched two new crypto exchanges
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Russia will use a national payment card system to exchange between rubles and cryptocurrencies on September 1. If the trial is successful, the Moscow Exchange and the St. Petersburg Currency Exchange may be allowed to establish cryptocurrency platforms.Trade active
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The U.S. announced that the core PCE price index rose by 0.1% in August, which was expected to be 0.20% and the previous value was 0.20%.
The data suggests that inflationary pressures have eased and may affect the Fed's future monetary policy decisions, such as the possibility of interest rate cuts.
Trade active
Bitcoin spot ETF had a total net inflow of $61.2966 million on September 30, with net inflows continuing for 8 consecutive days. BlackRock ETF IBIT had an inflow of $72.1517 million. On September 30, the total net outflow of Ethereum spot ETF was $822,300, Grayscale ETF ETHE outflow was $11.8128 million, and BlackRock ETF ETHA inflow was $10.9905 million.Trade active
White House believes Iran is preparing imminent ballistic missile attack against Israel
Trade active
Second wave of missiles seen above Jerusalem as Israel says Iran has launched attackTrade active
Iran has launched nearly 200 missiles into IsraelTrade active
Russia has just ordered its citizens to immediately leave Israel after Israeli airstrikes attacked the vicinity of Russia's Khmeimim base in Syria.
In light of the extremely tense situation in the region, the Russian ambassador in Tel Aviv recommended that citizens in Israel consider leaving the country "while such opportunities exist." He said this in an interview with TASS.
1.5 Milion Russians live in Israel. Russia is warning it's people to get out before it's too late. Something big is coming.
Russia also begins to evacuate citizens from Lebanon.
Trade active
Oct. 4 Options Delivery Data
17,500 BTC options expired with a Put Call Ratio of 0.75, a max pain point of $63,000 and a notional value of $1.07 billion.
119,000 ETH options expired with a Put Call Ratio of 0.68, a max pain of $2,500 and a notional value of $280 million
Trade active
18 Oct Options Delivery Data
11,000 BTC options expired with a Put Call Ratio of 0.78, a maximum pain point of $64,000 and a notional value of $1.26 billion.
138,000 ETH options expired with a Put Call Ratio of 0.61, a maximum pain of $2,500 and a notional value of $360 million
Trade active
Bitcoin spot ETF had a net inflow of $2.13 billion last week, ranking third in history. BlackRock ETF IBIT had an inflow of $1.14 billion, and Fidelity Bitcoin ETF FBTC had an inflow of $319 million. Ethereum spot ETF had a net inflow of $78.89 million last weekTrade active
Israel launches strikes on military targets in Iran, escalating Mideast wars Trade active
Iranian Supreme Leader Ali Khamenei has warned Israel and the United States of “a crushing response” for actions against Iran and its allies while Iran’s security council approves retaliation against Israel 
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