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IMF urges El Salvador to scale back Bitcoin law in ongoing negotiations
The International Monetary Fund (IMF) has urged El Salvador to limit the scope of its Bitcoin law and reduce the public sector's exposure to the cryptocurrency. During ongoing discussions with Salvadoran authorities, the IMF emphasized the need for stronger regulatory oversight of Bitcoin and a focus on macroeconomic stabilization. The organization is working with El Salvador on a new economic program aimed at fiscal reforms and risk management, including addressing Bitcoin-related risks. Despite limited domestic adoption of Bitcoin since its legalization as an official currency in 2021, President Nayib Bukele has described the move as a "net positive" for the country.
PayPal Executes First Business Transaction Using PYUSD Stablecoin
PayPal has completed its first business transaction using its PYUSD stablecoin, paying an invoice to accounting firm Ernst & Young. The transaction aims to showcase the efficiency of using digital currencies for commercial payments. The funds were deposited into Ernst & Young's Coinbase account, demonstrating PayPal's efforts to push PYUSD adoption in business-to-business payments. While PYUSD's market cap has decreased to around $716 million, the payments company is expanding its digital assets strategy, including new partnerships and enabling U.S. businesses to handle crypto transactions.
Director Who Unmasked QAnon Claims HBO Documentary Will Reveal Satoshi Nakamoto
Filmmaker Cullen Hoback, known for his HBO series "Q: Into the Storm," which claimed to unmask QAnon figures, has announced his new documentary, Money Electric: The Bitcoin Mystery, which explores the origins of Bitcoin and teases the potential revelation of its mysterious creator, Satoshi Nakamoto. Although Hoback hinted at uncovering Nakamoto's identity, neither the film’s trailer nor his statements confirm a definitive answer. The documentary, premiering on Oct. 8, aims to delve into the ongoing mystery, which has intrigued the cryptocurrency world since Nakamoto's disappearance in 2010.
Trading Desk Insights
Risk assets saw a robust rally this morning following the release of surprisingly strong jobs data. The nonfarm payroll report showed a notable increase of 254,000 jobs in September, significantly surpassing the anticipated 147,000. This led to a reduction in the unemployment rate to 4.1%, better than the expected steady rate of 4.2%. Such figures underscore the ongoing strength of the U.S. economy, bolstered by a vigorous labor market. Despite this, Bitcoin prices have notably declined from their positions a week ago, suffering from the ramifications of a market perceived as overbought and recent negative macroeconomic news, including heightened tensions in the Middle East.
Bitcoin has notably outperformed its counterparts, pushing the Bitcoin Dominance index past 58%—a near three-year peak—while the ETHBTC ratio has approached its annual low. The sentiment on Polymarket regarding Bitcoin's October trajectory is varied. While prospects of reaching $70,000 have been dismissed, there's a consensus leaning towards a price consolidation within the $57.5K to $65K range.
In the realm of US-listed crypto ETFs, BTC experienced further net outflows totaling $54.2 million, led by ARK's $58 million in withdrawals—marking its fourth straight session of net outflows. Meanwhile, ETH saw outflows of $3.2 million, reflecting a subdued risk appetite for the world's second-largest cryptocurrency.
The futures markets have adjusted sharply post-report, with traders now heavily betting on back-to-back quarter-point rate cuts by the Fed in the upcoming November and December meetings. Current probabilities stand at 72.3% for a 50 bps reduction and 26% for a 75 bps cut by year-end.
Crude oil prices climbed further on Friday, culminating in a nearly 9% increase for the week. The uptick in prices is largely due to escalating military actions in the Middle East, following Iran's missile strike on Israel.
Crypto Charts
Disclaimer
This research is for informational use only. This is not investment advice. Other than disclosures relating to Secure Digital Markets this research is based on current public information that we consider reliable, but we do not represent it is accurate or complete, and it should not be relied on as such. The information, opinions, estimates, and forecasts contained herein are as of the date hereof and are subject to change without prior notification. We seek to update our research as appropriate.
Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation. The price of crypto assets may rise or fall because of changes in the broad market or changes in a company's financial condition, sometimes rapidly or unpredictably. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. Fluctuations in exchange rates could have adverse effects on the value or price of, or income derived from, certain investments. We and our affiliates, officers, directors, and employees, excluding equity and credit analysts, will from time to time have long or short positions in, act as principal in, and buy or sell, the securities or derivatives, if any, referred to in this research.
The information on which the analysis is based has been obtained from sources believed to be reliable such as, for example, the company’s financial statements filed with a regulator, company website, company white paper, pitchbook and any other sources. While Secure Digital Markets has obtained data, statistics, and information from sources it believes to be reliable, it does not perform an audit or seek independent verification of any of the data, statistics, and information it receives.
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Crypto and/or digital currencies involve substantial risk, are speculative in nature and may not perform as expected. Many digital currency platforms are not subject to regulatory supervision, unlike regulated exchanges. Some platforms may commingle customer assets in shared accounts and provide inadequate custody, which may affect whether or how investors can withdraw their currency and/or subject them to money laundering. Digital currencies may be vulnerable to hacks and cyber fraud as well as significant volatility and price swings.
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