NYDIG Report: Bitcoin Volatility Expected Around ETF Dates, Mt Gox Delays, and Fed Rate Impacts

Key ETF Dates Stir Volatility Expectations in Options Market

The options market is signaling potential significant price movements in bitcoin around crucial ETF dates, according to NYDIG weekly report. The forward volatility of at-the-money (ATM) options from October 13th to October 20th, 2023, has surged by 9.6 points. This data suggests traders anticipate a 5.5% single-day move in bitcoin’s spot price during this period. The SEC is set to respond to the BlackRock iShares Bitcoin Trust ETF by October 17th, 2023. Additionally, the SEC has until October 16th to address the Bitwise Bitcoin ETP Trust. Market data indicates traders are bracing for price swings, possibly due to an approval or denial. Another pivotal date is October 13th, the last day for the SEC to appeal the Grayscale case decision.

Mt Gox Delays Creditor Payouts to 2024

The Mt Gox bankruptcy trustee has postponed creditor payouts by a year, moving the deadline from October 31st, 2023, to October 31st, 2024. This delay extends the resolution of a significant event in crypto history, involving approximately 138K BTC, valued at roughly $3.7 billion at current rates. The industry has closely monitored the fund disbursement due to its potential market impact. The resolution has been pushed to 2024.

Fed Rate Policy Sends Ripples Through Financial Markets

The Federal Open Market Committee (FOMC) decided to maintain current interest rates this week. However, hints of a potential rate hike later this year caused asset prices, including stocks and bonds, to decline. Bitcoin initially dipped but ended the week unchanged, contrasting with the performance of stocks and bonds. Over the years, various macroeconomic factors have been proposed as influencers of bitcoin’s price. Yet, none consistently explain its decade-long price history. While some factors, like inflation expectations, may play a role in shorter time frames, bitcoin’s unique characteristics remain its primary price drivers.

Market Overview

Bitcoin’s price remained relatively stable despite weekly fluctuations. In contrast, equities faced challenges due to looming interest rate hike uncertainties. The S&P 500 fell by 2.3%, and the Nasdaq Composite dropped by 5.0%. The fixed income market also saw declines, with investment grade corporate bonds, high yield bonds, and long-term US Treasuries falling by 1.3%, 1.4%, and 3.0%, respectively. Gold’s price slightly increased by 0.4%, while oil declined by 0.6% after a recent rally.

Other Noteworthy News

Mt Gox announced a change in repayment deadlines.

Grayscale Investments is filing for a new Ether Futures ETF.

The NYDFS updated its virtual currency oversight.

The Lazarus Group is reportedly intensifying its crypto hacking efforts.

The U.S. SEC’s Crypto Enforcement Chief hinted that charges might extend beyond Coinbase and Binance.

Citi is developing new digital asset capabilities for institutional clients.

DTCC collaborates with Chainlink to bring capital markets on-chain.

Tether resumes its stablecoin lending and invests $420 million in cloud GPUs.

PayPal USD is now accessible on Venmo.

Upcoming Events

September 29: CME expiry

October 3: Valkyrie Bitcoin and Ether Strategy ETF effective date

October 13: SEC appeal deadline in Grayscale case

October 16: SEC’s response date for the first spot bitcoin ETF (Bitwise)

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Crowd Sentiment towards Crypto Turns Bearish as Inflation Data Looms

The crypto market has not yet been able to find the right footing based on tightened macroeconomic factors and Russia’s invasion of Ukraine.

As a result, crowd sentiment toward cryptocurrencies has turned negative. Market insight provider Santiment explained:

“With Bitcoin, Ethereum, and most altcoins ticking down slightly Monday, the crowd’s bearish outlook continues to be evident. Green bars indicate more FUD than usual toward an asset, and red bars indicate more FOMO.”



Source: Santiment

Based on Santiment’s data, fear, uncertainty & doubt (FUD) continue to rock the crypto market, prompting a bearish outlook. Bitcoin (BTC) and Ethereum were down by 1.89% and 2.95% to hit $19,067 and $1,278, respectively, during intraday trading, according to CoinMarketCap. 

This trend is being witnessed ahead of the release of the U.S. inflation data scheduled for October 13. 

Riyad Carey, a research analyst at Kaiko, pointed out:

“There seems to be some jitters and derisking across all markets as we approach Thursday’s CPI release.” 

Carey added:

“Bitcoin is moving closely with equities and I’d expect that to continue as there haven’t been many crypto-specific catalysts in recent weeks. I also expect significant volatility on Thursday, with a move up or down depending on the inflation figure.”

The Bureau of Labor Statistics is set to unveil the consumer price index (CPI) for September, with some economists expecting a 0.3% monthly increase and the annual gain to jump to 8.1%.

The federal reserve (Fed) has been on a roller coaster ride of increasing interest rates to tame runaway inflation, but this has been detrimental to the crypto market.

This trend has prompted concern from various players. For instance, James Butterfill, the head of research at CoinShares, stated:

“We believe there is a building narrative that central banks are beginning to make policy errors. Several of our clients have made the point that they don’t want to buy Bitcoin right now, but as soon as the Fed pivots, they will add to positions.”

The UNCTAD recently pointed out that the Fed should ease interest rate hikes because this could trigger a global recession, Blockchain.News reported. 

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Federal Reserve Hikes Interest Rates with a 75-Bp Increase, Bitcoin Remains Bearish

The US Federal Reserve on Wednesday announced a 0.75 percentage point interest rate increase as part of efforts to clamp down rising inflation without creating a recession.

The latest interest rate rise by the Fed follows a similar hike in June – aggressive hikes that have so far put pressure on markets, including cryptocurrencies like Bitcoin (BTC). This is the fourth time the central bank has increased interest rates this year.

The price of Bitcoin increased 3.6% in the hour after Fed Chair Powell announced another big interest-rate raise.

Although crypto prices rose slightly following the Fed’s announcement, the markets are expected to remain volatile and bearish in the next few weeks.

Bitcoin was trading around $22,784.10 as of Thursday morning, 01:24 am EAT (East Africa Time), up 8.04% in the last 24 hours.

Aggressive rate hikes normally have negative impacts on crypto prices, and the markets are likely to continue to be bearish in the short term.

Industry leaders shared similar opinions regarding crypto market outlook, Chris Terry, BPSAA Board Member and VP of Enterprise Solutions at SmartFi, commented: 

“We anticipate that Bitcoin will continue to trade in this tight range of $20,000 plus or minus 10-15%. None of this should be a surprise. We could be in this stalled market for weeks and weeks. Boring.”

Meanwhile, Damian Scavo, CEO at algorithmic trading platform Streetbeat, said:

“The crypto economy also moves up, overperforming the stocks, thanks to the higher volatility. It’s very interesting also to see how crypto is starting to correlate with the stock market and in general, with the planetary economy. It means that the crypto market is reaching a certain level of maturity.”

Risky assets like cryptocurrency and stock have been heavily correlated since the beginning of this year. Both have been moving in similar patterns and have struggled to gain momentum this year as investors are pulling away in response to soaring inflation, rising interest rates, and a potential recession.

Does the interest rate hike continue?

The Fed raised its benchmark interest rate by 0.75% (75 basis points), thus repeating the same hike it created the previous month.

The hike comes after data released earlier this month showed that prices of goods jumped a staggering 9.1% in June. That inflation rate, as witnessed more than 40 years ago, has put additional pressure on the Federal Reserve to increase interest rates.

Federal Reserve Chairman Jerome Powell stated on Wednesday that the central bank remains committed to bringing inflation down to a target rate of 2% and further said the Fed is well-equipped to accomplish that goal.

Powell mentioned at a press conference: “My colleagues and I are strongly committed to bringing inflation back down, and we’re moving expeditiously to do so. We have both the tools we need and the resolve it will take to restore price stability on behalf of American families and businesses.”

The Fed stated that additional rate hikes will be expected as “appropriate” to fight runaway inflation. In a statement on Wednesday, the Fed said: “Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher food and energy prices, and broader price pressures.”

The central bank added, “Russia’s war against Ukraine is causing tremendous human and economic hardship. The war and related events are creating additional upward pressure on inflation and are weighing on global economic activity.”

An increase in the benchmark interest rate normally raises borrowing costs for consumers and businesses, which in theory, is meant to reduce inflation by slowing the economy and reducing demand. This means borrowers will face higher costs, from credit card debt and car loans to mortgages. But that approach risks pushing the economy into a recession.

Mixed economic data indicates a country bolstered by robust hiring and an uptick in retail sales despite several rate hikes this year designed to slow economic activity. Last month, the U.S.  witnessed stronger than expected job growth, as the economy added 372,000 jobs while the unemployment rate remained at 3.6%.

However, other indicators (like slowing home sales and a drop in consumer confidence) suggest the economy has started to weaken.

According to Andrew Levin, a former Fed economist and a professor at Dartmouth College, if the central bank hikes interest rates too quickly, an abrupt economic slowdown could send the economy into a recession.

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Is Bitcoin Getting Ready to Rebound in the Wake of Interest Rate Hikes?

Despite Bitcoin’s volatility sinking, this might indicate its quest to return to winning ways, according to Bloomberg analyst Mike McGlone.

McGlone stated:

“The lowest-ever Bitcoin volatility vs the Bloomberg Commodity Index (BCOM) may portend a resumption of the crypto’s propensity to outperform. Our graphic showing the elongated upward trajectory of Bitcoin’s price vs. the BCOM is typical compared with most assets.”

Bitcoin has recorded incredible bull runs in the past. For instance, the leading cryptocurrency scaled heights and recorded a new all-time high (ATH) price of $69,000 in November last year. As a result, McGlone pointed out:

“Bitcoin may be regaining its propensity to outperform in 2H. The long commodity unwind, copper’s fastest decline since 2008 and the bond future’s recovery from the steepest dip vs. its 50-week mean since the 1987 stock crash, all coming amid an aggressive.”

Bitcoin’s upward momentum has been dented by tightened macroeconomic factors that have made risk assets unfavourable. 

For instance, the Federal Reserve (Fed) has resorted to interest rate hikes, with last month’s being the highest in 28 years at 75 basis points (bps). 

This notable factor has made Bitcoin range in the lower $20K range. Market insight provider Glassnode highlighted:

“Bitcoin has attempted to escape the gravity of the $20k zone in a long-awaited relief rally. Momentum in the short term is favorable, however, longer-term indicators suggest additional time may be required to form a firm foundation.”

With this month’s interest rate review slated for tomorrow, July 27, all indicators are that it might be hiked by 75 bps, which has had a bearish impact on the crypto market in the past. 

Market analyst under the pseudonym Banks stated:

“Choppy sideways to down tomorrow. Dump during the meeting is likely; then relief is my base case right now if we get what the market expects. Obviously, history doesn’t always repeat, but FOMC meetings and CPI days always provide great opportunities up or down.”


Source: TradingView/Banks

Therefore, it remains to be observed whether Bitcoin’s low volatility will spur significant momentum in the second half amid interest rate hikes. 

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Ethereum’s Sentiment Drops as FOMC Meeting Nears

After experiencing considerable momentum, Ethereum’s sentiment has dropped as the Federal Open Market Committee (FOMC) meeting edges closer, according to Santiment.

The market insight provider explained:

“Ethereum had an up and down Sunday, jumping above $1,640 before dipping back down to $1,540. The trading crowd continues to not believe the hype, and is expecting prices to fall heading into the FOMC meeting. ETH should continue to stay volatile.”


Source: Santiment 

As part of the Federal Reserve (Fed), the FOMC determines the direction monetary policy will take, and it has resorted to interest rate hikes in the recent past. For instance, the interest rate was increased by 75 basis points (bps) last month, the highest surge in 28 years.

With the FOMC meeting slated for July 27, all indicators are that the interest rate might experience a similar hike. Mike McGlone, a senior Bloomberg Intelligence commodity strategist, recently stated:

“The Fed is using a sledgehammer on commodities and risk assets. Down about 20% since the June 75 bps rate-hike, the aftermath of another 75 in July may be similar for the three C’s – crude oil, copper, and corn. The stock market may be more vulnerable than crude.”

Meanwhile, crypto analyst Ali Martinez noted that Ethereum should hold $1,550 to avoid a pullback because it is a significant support level. He pointed out:

“Transaction history shows that Ethereum formed a significant demand wall at $1,550, where more than 586,000 addresses had previously purchased nearly 5.1 million ETH. Failing to hold above this vital support level could trigger a correction to $1,300.”

The second-largest cryptocurrency was down by 4.95% in the last 24 hours, with a price of $1,522 during intraday trading, according to CoinMarketCap

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With the Upcoming Interest Rate Hike from Fed, Is Bitcoin’s Current Rally Short-Lived?

Bitcoin (BTC) has regained momentum and reclaimed the $23K level, but this begs the question if this uptick is short-lived, given that the Federal Reserve (Fed) has adopted the strategy of continuously increasing the interest rate. 

Mike McGlone, a senior Bloomberg Intelligence commodity strategist, delved deeper into the issue and stated:

“The Fed is using a sledgehammer on commodities and risk assets. Down about 20% since the June 75 bps rate-hike, the aftermath of another 75 in July may be similar for the three C’s — crude oil, copper, and corn. The stock market may be more vulnerable than crude.”

With the Fed increasing the interest rate by 75 basis points (bps) in June, the highest since 1994, McGlone expects a similar hike this month meant to tame runaway inflation.

The United States recently released vital inflation data for June, with the consumer price index (CPI) jumping by 9.1%, the highest since November 1981. 

Therefore, McGlone might base his analysis on these figures by predicting that a 75 bps interest rate hike is likely in July.

Interest rate surges usually have bearish impacts on high-risk assets like Bitcoin (BTC). For instance, after the Fed raised the interest rate by 50 bps in May, BTC sank to a two-month low approximately two days later. 

Market analyst under the pseudonym Tajo Crypto noted that Bitcoin was still not out of the woods yet in the short term based on tightened macroeconomic conditions.

The analyst stated:

“This week has been very bullish for Bitcoin. But the macroeconomic situation around the world is still not encouraging, and the Fed will continue with its quantitative tightening. So, the pump we witnessed this week might correct soon. But BTC is long-term bullish.”

Tajo Crypto went ahead to note that the current rally might be a fake-out based on these factors and said:

“Bitcoin has been consistently pumping this week and has been able to get to $23K. Now lots of people are gradually becoming bullish on the market again, but this could be a fake-out.”

Bitcoin was up by 7.12% in the last 24 hours to hit $23,414 during intraday trading, according to CoinMarketCap

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Bitcoin Volatility Fades Away; Analyst Who Predicted Bitcoin Drop to 35000 Points Out Top Most Promising Privacy Coins

In terms of seasonality, May is considered a relatively successful month for BTC. Given the current risk aversion among investors and the macroeconomic environment, this May may prove to be different. 


Those accustomed to Bitcoin’s extreme volatility are scratching their heads and looking forward to a rally similar to that of last year when the flagship cryptocurrency doubled in price from July to November’s all-time high. What happened to Bitcoin’s legendary volatility? The following are a few possible explanations. 


BTC Is Still Correlated, But to a Lesser Degree


As concerns grow over how aggressively the Federal Reserve should tighten policy to combat decades-high inflation, richly valued tech stocks have been experiencing historic volatility. Bitcoin, however, hasn’t been battered to the same extent.


The chart below measures systematic risk by looking at how Bitcoin’s returns correlate with the market. As of right now, its value is 0.0362, which indicates that it is moving in sync with the benchmark, but not as drastically.


Source: Macroaxis.com


Bitcoin Volatility Vanishes


I wrote in December that institutional investors might dampen the volatility of the crypto market and smooth out the market’s dynamics some time in the future, and it seems we are already witnessing that.


The Average True Range Index, a volatility indicator, shows that Bitcoin volatility has been falling and is currently at its lowest level since December 2020.


Source: Macroaxis.com


Top Performing Privacy Coins 


Over the past three months, the privacy coin sector with a combined value of $8.84 billion has posted an overall gain of 20.24% compared to weak or negative performance by other sectors during the same period.


Haven Protocol (XHV)


Haven Protocol posted the biggest gain over the last three months, rising 135.23%. With a market cap of $75,268,861, it traded at $3.04 at the time of writing.


Built on Monero and including xUSD, the world’s first private stablecoin, Haven aims to become an open, private, and decentralized offshore bank, with a mint-and-burn mechanism that allows users to convert between XHV, Haven’s native token, and its ecosystem of synthetic assets and algorithmic stablecoins.

Source: CoinGecko 


Monero (XMR)


Monero (XMR) is the most popular privacy-centric cryptocurrency based on the CryptoNote protocol, a secure and untraceable system. All of Monero’s transactions remain 100% unlinkable and untraceable thanks to a special kind of cryptography.


XMR was worth $221.24 when this article was written, with a market capitalization of $4,006,536,770. For the past three months, it gained 49.81% and outperformed Bitcoin by 40.49%.


Monero is nearing its tail emission on June 8, which is expected to appeal to the mining community and keep the price of XMR high.


Source: CoinGecko 

Railgun (RAIL)


Railgun provides privacy for trading on DEXs and lending due to its fully Eth layer-1 architecture, which does not use layer 2 nodes or cross-chain bridges to compromise security. It is a smart contract system that gives zk-SNARK privacy to any Ethereum transaction or smart contract interaction.

Railgun allows users to go untraceable when trading, using leverage platforms, or adding liquidity with any Ethereum dApp. 


Currently trading at $3.22 with a market cap of $184,773,805, RAIL is 23.5% away from its record high of $4.20 set in January 2022, so it’s likely it will soon retest the new high. 


Source: CoinGecko 


Zcash (ZEC)

Another privacy-preserving cryptocurrency, Zcash provides anonymous value transfer using zero-knowledge cryptography. The protocol provides the option of shielding transactions to ensure they are completely anonymous, or to make them transparent to show them on the Zcash blockchain. 


It has recently been revealed that Edward Snowden played a key role in the creation of Zcash privacy coin.


Source: CoinGecko 


In the past three months, ZEC gained 31.10% against the greenback and 23.04% against Bitcoin. With a market cap of $1,640,053,535, its price is currently $132.16, up 10% over the past 24 hours. 

Image source: pexels.com


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Bitcoin Needs to Reclaim $37.5K before Painting a Bullish Picture

The volatility of the Bitcoin (BTC) market for a couple of months continues. The leading cryptocurrency was down by 9.05% in the last 24 hours to hit $36,031 during intraday trading, according to CoinMarketCap.

Bitcoin turned into the red zone approximately 48 hours after the Federal Reserve (Fed) announced an interest rate rise of 0.50%.

Market analyst Michael van de Poppe believes BTC needs to reclaim the previous support level of $37.5K to boost its chances of bullish momentum. He explained:

“If Bitcoin wants anything to be bullish, it needs to reclaim the level at $37.5K. Then I’m assuming we’ll test $39K again as there’s a big gap in between. Under $37.5K, nothing to say about bullish perspectives.”


Source: TradingView

Similar sentiments were echoed by crypto analyst Matthew Hyland, who believed that BTC should reclaim $37.2K or experience a further price decline. 


Source: Matthew Hyland

Sell calls spike

According to market insight provider Santiment:

“Crypto traders appear to believe that yesterday’s market-wide price surge was an anomaly, and the short celebration won’t last. Historically, when calls for selling spikes, crowd FUD like this strengthens the case of a continued rise.”


Source: Santiment

Bitcoin whales are also selling, as acknowledged by crypto analyst Ali Martinez. He noted:

“Addresses holding 1,000 to 10,000 BTC have offloaded or redistributed 70,000 Bitcoin in the past three days while the balance on crypto exchanges increased by 10,000 BTC.”

The interest rate hike might be instigating the selling pressure. Jason Lau, the chief operating officer of crypto exchange Okcoin, pointed out:

 “Investors are jittery about the Fed continuing to raise interest rates after yesterday’s 50 bps hike. The potential of additional rate hikes makes the trajectory of the global economy uncertain.”

Profit-taking tendencies have also been noted in the BTC market, Blockchain.News reported. 

Nevertheless, Santiment believes all is not lost because whenever high fear, uncertainty, and doubt (FUD) levels are experienced, bullish momentum is usually on the horizon. 

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Bitcoin Bleeds as Celebrations about Interest Rate Hike Becoming Short-Lived

After hitting the $40K level as Fed’s interest rate hike made airwaves on May 4, Bitcoin (BTC) finds itself on the receiving end because it has sunk to a two-month low.

The leading cryptocurrency was down by 7.85% in the last 24 hours to hit $36,472 during intraday trading, according to CoinMarketCap

Celebrations engulfed the Bitcoin market because news about the Federal Reserve’s interest rate increase by 0.5% turned bullish. Still, various indicators showed that caution was not to be thrown to the wind.

Market insight provider Santiment had acknowledged that it seemed BTC was experiencing an anomaly, given that sell the rumour buy the news scenario was playing out because interest rate hikes are usually bearish. 

Therefore, the post-Fed optimism evaporates as the crypto market continues digesting the tightened monetary policy. 

Josh Lim, the head of derivatives of New York-based brokerage Genesis Global Trading, pointed out:

“The market still needs to digest the impact of tighter monetary policy on all risk assets and crypto might take a hit as correlations.” 

A higher-rate environment has pushed Bitcoin to a tight spot because the leading cryptocurrency has been trading between the $36K and $41K range for a couple of months.

Teong Hng, the CEO of Hong Kong-based crypto investment firm Satori Research, noted:

“The technical picture in BTC remains poor, in spite of a less hawkish Powell, BTC failed to regain 40,000, hence this pull back. As equity markets in the U.S. are reversing yesterday’s gains, crypto follows suit.”

According to data by CoinShares, crypto outflows have hit $339 million in the past four weeks. This also shows that liquidity has been exiting the BTC market.

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Bitcoin Climbs to $40K Despite Fed’s Interest Rate Hike, Is Sell The Rumor Buy The News Playing Out?

Despite the Federal Reserve (Fed) increasing interest rates by half a point (0.5%), Bitcoin (BTC) soared by 6% to reach $40,002.

Even though the leading cryptocurrency had retraced to $39,595 during intraday trading, it was still 2.46% up in the last 24 hours, according to CoinMarketCap.

The Bitcoin market had been engulfed by nervousness about the repercussions of the Fed’s decision for weeks because a hike in interest rate is usually bearish. Therefore, the surge in price could signal a sell the rumour, buy the news event.

Market insight provider Santiment explained:

“The Fed made their move as expected, with a 50 basis point interest rate rise. Unsurprisingly, the impact shifted bullish almost immediately for crypto, just as it did after the March hike. We may have another sell the rumor by the news scenario.”


Source: Santiment

Therefore, what might be happening in the BTC market is the opposite of the “buy the rumor, sell the news” adage, which means that if good news is expected sometime in the future, the price will often move higher in anticipation of that date, but not necessarily after.

Meanwhile, Nick Mancini, the director of research at the crypto analytic platform, Trade The Chain, opined that the scenario in the Bitcoin market would have been bearish if the interest rate hike was 0.75% and not the current 0.50%. He explained:

“Any FOMC guidance that does not include a 0.75 percent interest rate increase would be bullish for both crypto and equities. We believe that the market has priced in continued hikes of 0.25% to 0.50% moving forward for 2022. This gives the market certainty, which, in turn, breeds bullish price action.”

To tame runaway inflation, economists speculate that the Fed will roll out further interest rates to attain the target level of 2%.

According to the latest figures by the Consumer Price Index (CPI), inflation rose 8.5% year on year in March 2022, a scenario not seen since December 1981. 

Meanwhile, Bitcoin might be painting a bullish picture based on the current narrow playing field because this could trigger a big impulse move, according to Market analyst Michael van de Poppe. 

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Bitcoin (BTC) $ 26,119.00 1.79%
Ethereum (ETH) $ 1,577.22 1.07%
Litecoin (LTC) $ 64.35 0.73%
Bitcoin Cash (BCH) $ 206.70 1.05%