Crypto Market Updates: Election Catalysts, Record Acquisition, and FTX Updates

Key Takeaways

1. Bitcoin surged past $70,000 this past week, driven by several near-term catalysts. The most obvious being the election, now less than a few days away
2. On October 21st, Stripe announced its acquisition of stablecoin platform Bridge for $1.1bn¹, setting a record as the largest crypto acquisition to date
3. US Bankruptcy Judge John Dorsey approved the FTX wind-down plan on October 7th, 2024

Near-Term Tailwinds

Bitcoin surged past $70,000 this past week, driven by several near-term catalysts. The most obvious being the election, now less than a few days away. Markets appear to be pricing in a potential Trump victory, as his lead on some prediction markets has widened to nearly 30%². Trump has offered to provide the industry its collective wishlist if elected³. As such, we do not believe any further crypto policy announcements from Trump would have a material impact on crypto markets, unless he flips his position, which we believe is unlikely. Harris, on the other hand, has yet to provide further details on her crypto policy outside of giving vague promises on protecting innovation and protecting investors. Whether or not either candidate acts on their promises is yet to be seen, but Trump is generally viewed as a more crypto-friendly candidate. Either way, this election cycle has proved that crypto is too big of an issue to ignore - 44% of all corporate money contributed during this year’s election came from crypto backers⁴. We believe a Trump or Kamala victory would be positive for crypto. Elections have historically dragged markets, given the uncertainty, and either administration would be an improvement from the status quo.

Looking beyond the elections, the Fed's recent pivot towards lower front end rates in conjunction with the markets becoming more concerned around fiscal discipline, will likely continue to benefit crypto markets. Increased global liquidity has been historically positive for risk-on assets like Bitcoin. November 7th will be a key date to watch as recent positive economic data suggests that the Fed is likely to opt for a lower 25 bps cut in November, if they cut at all. This could positively impact prices in conjunction with a new President-elect. 

Stripe Announced Acquisition of Bridge

On October 21st, Stripe announced its acquisition of stablecoin platform Bridge for $1.1bn⁵, setting a record as the largest crypto acquisition to date. Major payment processors like Visa and SWIFT have already taken steps to natively support stablecoins, as detailed in our previous memo.  This acquisition further highlights the growing importance of integrating stablecoins into conventional payment networks. We believe stablecoin adoption represents a meaningful improvement over current payment infrastructure, offering advantages like near-instant settlement, lower costs, and reduced counterparty risks thanks to blockchain technology.

FTX Plan Confirmed

US Bankruptcy Judge John Dorsey approved the FTX wind-down plan on October 7th, 2024.  Crypto markets have rebounded nearly 3x since then. The Estate is estimated to have recouped between $14.7bn and $16.5bn following a series of settlements with customers and creditors, government agencies, as well as liquidation of various assets on its balance, according to court filings⁶. This amount is enough for certain customers to recover at least 118% of the value in their accounts as of November 2022. We expect Class 7 claims (<$50,000) to begin receiving their distributions as soon as December and January. While Class 5 claimholders are expected to start receiving distributions in February. We will continue to keep our readers informed on the latest FTX developments. We are hopeful that the first distribution to Class 5 claims holders will be 100% of their claim value.

Ionic Digital Special Meeting Request

On October 16th, Figure Markets sent a form to the disaffected shareholders of Ionic requesting additional disclosures required to call a Special Meeting. With 25% participation of the Class A shares, collectively the shareholders can call a Special Meeting. At the Special Meeting the shareholders with whom FIgure Markets is working with, intend to:

• Call for the removal of certain board members
• Take an advisory vote appointment of a qualified CEO
• Take an advisory vote to grant Immediate liquidity for Class A shareholders
• Take an advisory vote to terminate the Hut 8 MSA

We believe the company's current leadership, through their actions — or rather, inactions — has shown that they are unfit to lead this public company. We remain committed to helping shareholders access liquidity via a combination of the distribution of the bitcoin on the company’s balance sheet and liquid markets for the company’s stock. We strongly urge Ionic shareholders to fill out this form to support our initiative.