Last week, Bitcoin demonstrated impressive growth, nearing the $72,500 mark by the evening of October 30. Against this backdrop, all cryptocurrencies in the top ten by market capitalization also showed positive dynamics, but Bitcoin significantly increased its market share, confirming the "uptrend of September," reports the correspondent of the business information center Kapital.kz.
Technical analyst Peter Brandt stated that the chart of digital gold has completed the formation of an "expanding inverted triangle," observed over the past five months. "Perhaps progress has begun following the halving. The series of lower highs and lows since March has come to an end," the expert noted.
Earlier, analysts at Bernstein linked Bitcoin's October rally to the increasing chances of Donald Trump winning the presidential election. The rise in the first cryptocurrency's value occurred against the backdrop of improving his electoral prospects. However, specialists warn of a potential correction for Bitcoin after the elections. "The price of Bitcoin may significantly increase ahead of the U.S. presidential elections. However, a correction is likely in the days following November 5," stated Edward Hindi, investment director at Tyr Capital. He emphasized that regardless of the election results, the upward momentum is highly likely to resume, and new highs may be reached by the end of 2024.
Chief analyst at Bitget Research, Ryan Li, also pointed out Bitcoin's readiness for significant growth in the upcoming week. "Several factors support Bitcoin's growth potential, particularly the anticipated interest rate cut by the Fed. The broader market expects a reduction of 25 basis points on November 7, which would lower the rate to the range of 4.5–4.75%," Ryan Li stated. He noted the two-day interval between the U.S. elections and the American regulator's decision on the key rate. "The direction of this impact will depend on whether a candidate who supports Bitcoin wins," the expert added. Ryan Li believes that the upcoming vote by Microsoft's board of directors on Bitcoin investments, scheduled for early December, could influence market dynamics. "If the board votes against investing in Bitcoin, it could dampen market participants' enthusiasm and hinder cryptocurrency growth," the specialist explained. Conversely, a positive decision from Microsoft could trigger a strong upward price movement.
The fundamental positions of "digital gold" on Wall Street continue to strengthen. Spot Bitcoin ETF issuers have acquired 976,873 BTC ($66.2 billion), equivalent to almost 5% of the available supply, as noted by Nate Geraci, president of The ETF Store. Against this backdrop, analyst Alessandro Ottaviani deemed it "inevitable" that Bitcoin's price would set a new historical high given the current accumulation rate of $3.13 billion over the past two weeks. Former BitMEX CEO Arthur Hayes, in a new essay, shifted the focus from the U.S. elections and expressed the opinion that demand for Bitcoin will sharply increase as a result of inevitable economic stimulus measures from Chinese authorities. In the article titled "Forward, Bitcoin," the expert noted that China is facing the largest real estate bubble in history. Similar causes previously led to major crises in Japan (1989), the U.S. (2008), and the EU (2011). "China's economy, like any other victim, subsequently fell into a liquidity trap or balance sheet recession. To prevent a terrible deflation, powerful monetary and fiscal stimuli are necessary," emphasized Arthur Hayes. He believes that despite all claims about the advantages of the political and financial system, the Chinese government will resort to traditional measures. This "monetary chemotherapy" includes two components: recapitalizing the banking system with state funds and easing requirements so that institutions can "paper over" their balance sheets; and quantitative easing (QE) with money printing for large-scale purchases of government debt. "Given that China's real estate bubble is the largest in history, the volume of credit created in yuan will rival the amount of dollars printed in the U.S. in response to COVID in 2020–2021," the expert is confident. Arthur Hayes suggested that the injection of money into the economy and the threat of further inflation will lead to increased investments in risk assets. First and foremost, users will consider Bitcoin as an investment vehicle, as it outperforms other assets in terms of capital preservation. He reminded that the first cryptocurrency is "not an alien concept" for residents of the country with middle and high incomes, who will not allow their money to depreciate. In his opinion, the reason for the ban on Bitcoin trading was the authorities' unwillingness for digital gold to serve as a kind of "fire alarm" for economic problems. However, owning cryptocurrency is not prohibited in China. He noted that the P2P market is reviving in the PRC, with major exchanges like Binance, OKX, and Bybit actively operating. At the same time, the expert emphasized that an immediate market reaction to quantitative easing from the People's Bank of China and accelerated bank lending should not be expected. "But when an ordinary wealthy coastal resident decides that they need to buy Bitcoin at any price in yuan, volatility will be similar to that in August 2015, when following the shock devaluation of the Chinese currency, BTC rose from $135 to $600—nearly five times in less than three months," he speculated.
While Bitcoin amazed the market with its rapid growth, Ethereum also attracted analysts' attention. The price of Ether has slightly decreased since the beginning of the month, but several indicators pointed to its readiness for a reversal and potential recovery to $6,000. This was reported by Cointelegraph analyst Yashu Gola. "Ether" may close its first losing October since 2018. According to the expert, the weak dynamics are attributed to increased competition from new smart contract platforms such as Solana and the market's sluggish response to spot ETH ETFs. However, Ethereum remains above a crucial support level around $2,400. "This price coincides with the lower line of a multi-month ascending channel that has historically preceded sharp price recoveries, including a more than 160% increase in cryptocurrency prices from October 2023 to March 2024," Yashu Gola noted. If Ethereum holds the $2,400 level, the price could reach the upper boundary of the channel, located at $6,000, in the coming months, the expert believes. "Supporting the optimistic forecast, the relative strength index (RSI) also bounced off a historical support zone, coinciding with the cryptocurrency testing the lower trend line," he added. The potential growth of Ethereum to $6,000 may gain additional momentum due to the weakening of major competitors—Bitcoin and Solana, according to Yashu Gola. "From a technical perspective, Ether is currently trading near its historical upward support line relative to digital gold, which, combined with its oversold RSI, could lead to a sharp price rebound in the coming months," the analyst stated.
Simultaneously, the annual staking reward rate for the second-largest cryptocurrency has decreased to approximately 3%. The key indicator of the Ethereum network is now lower than that of several other projects, such as Aptos (7%) or Avalanche (7.84%). Analysts at Kaiko noted that Ethereum's staking yield now lags behind other major first-level protocols, including Cosmos, Polkadot, Celestia, and Solana, where it ranges from 7% to 21%. On the other hand, this low rate for Ethereum indicates a low level of inflation compared to competing protocols. Many market participants prefer to earn passive income through liquid staking services such as Lido, which holds over 33% of market share in its segment, with its TVL exceeding $25 billion.
Ethereum co-founder Vitalik Buterin called the bloating of volume and the increasing complexity of the blockchain over time among the main problems of the network and proposed ways to address them. In the fifth part of the essay "The Possible Future of the Ethereum Protocol," titled "Cleaning Up," he pointed out two main "weak points." First, historical data—any executed transaction and account must be stored by all clients forever and loaded during synchronization, leading to constant volume growth even with unchanged network capacity. Second, protocol functions—it's easier to add a new one than to remove an old one, which increases code complexity. "For Ethereum to sustain itself in the long term, we need to actively counteract these trends, gradually reducing complexity and bloating. But it’s also necessary to preserve one of the key properties that make blockchains great: their permanence," Vitalik Buterin emphasized. Currently, a fully synchronized Ethereum node requires about 1.1 TB of disk space for the execution client and several hundred gigabytes for the consensus client. One natural solution to the problem, according to Vitalik Buterin, is for each node to store only a small percentage of the data. This is related to one of the main goals of the "Cleaning Up" phase—simplifying the launch of clients on users' PCs. As a result, a network of 100,000 nodes could be created, each containing a random set of 10% of historical information. Replicating these parts 10,000 times would be equivalent to full storage. The expert noted that of the 1.1 TB of the execution client, about 800 GB is historical data, while the rest pertains to state data. Reducing the volume of the latter can