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PLUS: SBF and Trump's $5 billion deal

Alex M.
October 02, 2023

GM everyone. This is 2036, the crypto newsletter that pays you.

Here’s what we’re serving up today 🍲: we finally made it to Q4. In one piece. And we’ve got good news for y’all.

Let’s dig in.

🥔 Today’s meat and potatoes

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If you’re still here after crypto’s -90% downturn in 2022 - congratulations.

Even Q3 was a tough period. Bitcoin went down -11%.

But we finally made it to Q4.

And here’s the good news: Q4 is historically the best-performing quarter of the year for the crypto.

October and November, in particular, are stand-outs:

In the years it’s been up (8 out of the past 10 years) bitcoin has gained on average ∼22% in October.

That’s why October is often called Uptober.

And we’re off to a good start 👀

As of this writing, bitcoin sits at ∼$28,300. The last time that happened was in August.

On top of that, there’s an increasing number of positive catalysts on the horizon:

1/ Crypto ETFs

Both Ethereum and Bitcoin ETFs are on the horizon.

In fact, it’s possible that 9 Ether Futures ETFs start trading today:

And Bitcoin spot ETFs are just around the corner, too.

Last week, in anticipation of the US government shutdown, the SEC delayed its decision on whether to approve a bitcoin ETF.

We expect they’ll give us their next answer in January. Just enough time to stack some more bitcoin.

2/ The bitcoin halving

In April 2024, bitcoin will undergo the most important event in its cycle: the halving.

Every 4 years, the rewards distributed to bitcoin miners are cut in half.

This massively reduces both:

the selling pressure from miners (which are the biggest sellers on the market)
the supply of new bitcoin on the market

Every halving in Bitcoin’s history has led to a bull market that lasts ∼480 days:

Btw, this puts the end of the bull market around August 2025.

3/ Macroeconomic tailwinds

Interest rates in the US are skyrocketing:

This is usually bad for risk assets like stocks and crypto because investors can get a safe 5% return just from buying bonds.

Normally, interest rates up 📈 = risk assets down 📉

But despite interest rates increasing from 0 to ∼5%, bitcoin is up +70% year-to-date.

Foreign governments and central banks are buying fewer US government bonds and more gold than ever before in history.

As a result, long-term US bonds are down nearly -50% from their peak, 38 straight months of losses, their worst performance ever in history. Talk about a “safe asset.”

Instead, investors are looking for hard asset alternatives to risky US government debt.

And bitcoin is emerging as a digital store of value that cannot be inflated away.

That’s why, over the last 12 months:

The correlation between the S&P 500 and Bitcoin has fallen from 65% to 7% today. Bitcoin is charting its own course.
The % of bitcoins owned by long-term holders has risen to an all-time high of 76% - people who see the writing on the wall and ain’t selling.
During the SVB banking crisis when confidence in the banking system tanked, bitcoin rallied +50% in a few weeks.

Now, no one knows what the future holds.

But with Ether Futures ETF (potentially) launching today and the catalysts ahead of us, the world is waking up to the potential of crypto.

So where does Q4 leave us?

We have no idea… but here’s what some smart people think: