WATCH OUT!! Crypto Market Will MOVE On These Days!!

October: A Month of Anticipation and Uncertainty in the Crypto World

September was a bit quiet in the crypto world, but luckily October is upon us and things could be about to get interesting. For one thing, we are just days away from the start of the Sam Bankman-Fried trial, which will throw crypto back into the mainstream headlines, albeit for all the wrong reasons. Once hailed as crypto’s white knight, will he now be considered the industry’s Kryptonite? Also, in the month ahead, we anticipate significant macro developments in the US, including the release of inflation data, the SEC’s second deadline for ruling on spot Bitcoin ETF filings, and much, much more. This article will give you a preview of what to expect for crypto in October.

The Potential Government Shutdown

The month begins with a potential government shutdown in the US. At the time of filming, it looks highly unlikely that Congress will pass the 12 appropriation bills that are essential for funding governmental operations before the 30th of September, the end of their fiscal year. Congress is stuck between a Senate controlled by Democrats and a House of Representatives controlled by Republicans. The House Speaker, Kevin McCarthy, looks like he’s losing his battle to keep federal services up and running and avoid the worst impacts of a government shutdown. Assuming the deadline passes, what does a government shutdown actually mean? Many government services will be disrupted, and hundreds of thousands of federal workers will be furloughed or placed on a leave of absence without pay. While Congressional salaries are not subject to annual appropriations, around 4 million people across the country, as well as millions more who rely on government services, will feel the full effects of a shutdown. Essential services, such as the Postal Service, law enforcement, and emergency services, will operate as normal, but there will still be notable consequences throughout society. A government shutdown could impact everything from food safety to cancer research to Head Start programs for children. It also has implications on the economy, with JP Morgan estimating that for each week of a government shutdown, there’s a decrease of 0.1 percentage points in GDP growth. The impacts on crypto are impossible to predict, but it stands to reason that in a period of economic uncertainty, those affected are unlikely to invest in riskier assets like crypto. The four crypto-focused bills currently grinding their way through Congress will also be delayed in the event of a shutdown, so regulatory clarity remains as ever beyond the horizon.

The Sam Bankman-Fried Trial

One of the most anticipated events in October is the start of the Sam Bankman-Fried trial. While we won’t go into too much detail about the trial itself, as there is a separate video on that topic, it is worth noting that the trial is likely to have more than its fair share of drama. Most of Sam’s inner circle, including Caroline Allison, Gary Wang, and Nishad Singh, have all pleaded guilty and are cooperating with the prosecution. If any of them take the stand, it will be box office dynamite. One thing to keep an eye out for is any mention of the former Alameda co-CEO and yachting enthusiast, Sambuca. He has gone dark since FTX’s collapse, and no one seems to know where he is or whether he’s cooperating with authorities. The trial could further damage the industry’s image, undermine trust in crypto platforms, and affect both investments and adoption. It could also establish a precedent for future cases involving crypto-related fraud in the US. There is a lot at stake, and the outcome of the trial will undoubtedly have ripple effects throughout the crypto world.

The Release of Inflation Data

Another significant event to watch out for in October is the release of inflation data by the US Bureau of Labor. However, if there is a government shutdown, this data is likely to be delayed. Traditionally, there has been a negative correlation between the Consumer Price Index (CPI) and crypto prices. As consumer prices climb, crypto prices have tended to drop. However, this view is not unanimously shared. Some, like Arthur Hayes, believe that the Fed’s interest rate adjustments are nothing to be concerned about. Higher interest rates have inadvertently pushed the US Treasury to issue more bonds and bond repayments to the wealthy, stimulating spending and normal GDP growth. In any case, the release of inflation data will provide valuable insights into the state of the economy and may impact investor sentiment towards crypto.

The Spot Bitcoin ETF Filings

October is also the month when the SEC will make decisions on several spot Bitcoin ETF filings. These applications have caused a lot of excitement in the crypto world, with hopes that the SEC will approve them, leading to increased accessibility and legitimacy for Bitcoin. The key dates to watch out for are October 16th, the deadline for the Bitwise spot Bitcoin ETF application, and October 17th, the comprehensive decision deadline for applications from big firms like BlackRock, VanEck, WisdomTree, and Fidelity. The SEC could approve, reject, or delay making a decision on these applications. The outcome will undoubtedly have an impact on BTC prices and the overall crypto market.

The Resumption of Student Loan Repayments

Another development that could impact consumer spending is the resumption of student loan repayments. These were frozen due to the pandemic, but now that COVID is over, payments are coming due. Goldman Sachs estimates that the resumption of student loan repayments could cost households approximately $70 billion annually. When people’s wallets are tightened, they are less likely to invest in riskier assets like crypto. However, savvy students may take advantage of the opportunities in DeFi, where borrowers can use crypto assets as collateral to secure loans in stable coins that can be used to pay off debt. This offers advantages such as delayed repayment dates, better interest rates on collateralized assets, and appreciation potential.

The Federal Open Market Committee Meeting

Lastly, we have the next meeting of the Federal Open Market Committee (FOMC) and the release of the minutes from the previous meeting. These meetings are significant for investors, analysts, and policymakers as they determine big market policy decisions, including interest rates. The minutes of the FOMC meetings provide valuable insights into the Fed’s thinking and can help predict future policy decisions. There are expectations that the Fed will increase interest rates before the end of the year, and these minutes might provide clues as to when this expected rate hike will take place.

Frequently Asked Questions

1. How will a government shutdown impact the crypto market?

A government shutdown can create economic uncertainty, leading to a decrease in investments in riskier assets like crypto. Additionally, the delay in regulatory clarity and the suspension of critical economic data can further affect the market sentiment.

2. What are the potential outcomes of the Sam Bankman-Fried trial?

The outcomes of the trial can range from a negative impact on the industry’s image and trust in crypto platforms to potential price drops and establishing a precedent for future cases involving crypto-related fraud.

3. How does inflation data affect crypto prices?

Traditionally, there has been a negative correlation between the Consumer Price Index (CPI) and crypto prices. As consumer prices climb, crypto prices tend to drop. However, this correlation is not universally agreed upon, and other factors can influence crypto prices.

4. What impact will the SEC’s decision on spot Bitcoin ETF filings have on the market?

The SEC’s decision on spot Bitcoin ETF filings can lead to increased accessibility and legitimacy for Bitcoin. If approved, it could result in a bullish surge in BTC prices. However, if rejected, it may put downward pressure on BTC and the overall crypto market.

5. How will the resumption of student loan repayments affect crypto investments?

The resumption of student loan repayments can tighten people’s wallets, making them less likely to invest in riskier assets like crypto. However, some students may take advantage of DeFi opportunities to use crypto assets as collateral for loans, offering advantages such as delayed repayment dates and better interest rates.

6. What insights can be gained from the Federal Open Market Committee meetings and minutes?

The Federal Open Market Committee meetings and minutes provide valuable insights into the Fed’s thinking and can help predict future policy decisions, including interest rate hikes. These insights can be crucial for investors, analysts, and policymakers in understanding the direction of the economy and its potential impact on the crypto market.