On 7 October 2023, Martin Leinweber, Digital Asset Product Strategist at MarketVector Indexes, engaged in a detailed discussion with CoinDesk about the current and future landscape of the crypto market. Leinweber covered a range of topics, from the crypto market’s subdued response to economic indicators to the varying performance of different crypto sectors, and even potential triggers for the next bull market.

Leinweber started by noting that despite significant economic indicators like the latest jobs report and potential interest rate hikes, the crypto market has remained relatively stable. He contrasted this with traditional assets, which have reacted predictably, and attributed the crypto market’s stability to its current low correlation with traditional markets.

Leinweber highlighted the diverging performance among different crypto sectors. He specifically noted that decentralized computing tokens and infrastructure applications are currently outperforming, largely due to the ongoing interest in artificial intelligence. Conversely, media and entertainment tokens have been underperforming.

Leinweber pointed out that current on-chain metrics like fees generated on Ethereum and the number of active users on various platforms are lower than they were a few months ago. He interpreted this as an indication that the crypto market is in the early stages of either a new bull market or a bottoming phase.

Discussing the performance of large-cap tokens like Bitcoin and Ethereum since the March banking crisis, Leinweber observed that these have outperformed smaller tokens. He linked this to reduced market liquidity and the decreased presence of market makers, causing investors to focus on more established tokens.

Leinweber also touched on investor behavior, suggesting that if a strong bull market returns, investors are likely to shift their focus back to smaller tokens. He viewed the current emphasis on larger tokens as indicative of the market’s current phase.

Leinweber identified several potential catalysts for the next crypto bull market. These include the possible approval of a spot Bitcoin ETF in the first quarter of next year — which he said could be a game-changer — and a more accommodative stance from the Federal Reserve in stressful economic conditions. He also mentioned Bitcoin’s halving cycle as another potential catalyst.

On 3 October 2023, Jay Clayton, the former chair of the U.S. Securities and Exchange Commission (SEC), appeared on CNBC’s ‘Squawk Box’ to discuss various topics, including the criminal trial of Sam Bankman-Fried, the former CEO of the now-defunct crypto exchange FTX. While Clayton provided insights into the trial, he also discussed the evolving regulatory landscape for Bitcoin.

Clayton emphasized that Bitcoin has been classified as a commodity by both the CFTC and SEC. He noted significant improvements in the Bitcoin spot market compared to a few years ago. These advancements, according to Clayton, make the approval of a spot Bitcoin ETF in the U.S. “inevitable.” He stated that all relevant legal questions around Bitcoin have been resolved, and the market has gained much greater efficacy, bolstering the case for an inevitable approval of a spot Bitcoin ETF.

Featured Image via Midjourney