Monthly Review of October 2023

In this monthly review, we will examine the most significant cryptocurrency-related news in October. The major cryptocurrency news in October revolved around the United States' Bitcoin spot ETF, JPMorgan's blockchain technology progress, car manufacturers' decisions to accept cryptocurrencies as a payment method, potential smart contracts on Bitcoin, and positive forecasts and comments about Bitcoin and cryptocurrencies.

              
October in the Cryptocurrency Markets
October was an exceptionally positive month for cryptocurrency price movements. It's no wonder that October has been referred to as "Uptober" in Bitcoin circles for the past few years. Among the cryptocurrencies offered by Northcrypto, Chainlink saw the most significant price increase, surging nearly 40% during the month. Bitcoin's price also experienced a nearly 30% increase. Among other cryptocurrencies offered by Northcrypton, Aave and Polygon saw around a 20% increase. Ethereum's price rose just under ten percent, while ApeCoin and Litecoin experienced slightly over and slightly under a five percent price increase, respectively. Although Chainlink was the biggest gainer, Bitcoin is likely to have acted as the catalyst for this surge. The surge in Bitcoin's price was likely influenced the most by the positive news about Bitcoin spot ETF approval in the United States and increased geopolitical uncertainty.

Bitcoin Spot ETF News from the United States
In mid-October, interesting price movements were observed in cryptocurrency prices, as news about the approval of a Bitcoin spot ETF in the United States began to circulate on social media, including X. A cryptocurrency news outlet, Cointelegraph, published a report based on erroneous information, stating that the world's largest asset manager, BlackRock, had received approval for its Bitcoin spot ETF. Bitcoin's price surged by almost €2,000 immediately after the publication. However, shortly after the news spread, BlackRock issued a statement clarifying that the ETF was still under review. Following this clarification, Bitcoin's price had fallen to roughly the same level as before Cointelegraph's publication.

During the same week as the false ETF news, it was reported that major asset managers BlackRock and Fidelity, along with cryptocurrency fund specialist Grayscale, had all updated their Bitcoin spot ETF applications. These updates were made in response to feedback from the U.S. Securities and Exchange Commission (SEC).

October also saw several forecasts related to the approval of a Bitcoin spot ETF. For instance, former BlackRock executive Steven Schoenfield predicted that the U.S. Securities and Exchange Commission (SEC) would approve a Bitcoin spot ETF within the next 3–6 months. His view was based on Bitcoin's growing popularity and institutional interest, creating a favorable environment for ETF approval. Schoenfield believed that ETF approval could have a significant positive impact on the cryptocurrency markets.

JPMorgan Implements a Collateral Arrangement with BlackRock and Barclays on Its Blockchain Solution
In October, JPMorgan, the largest bank in the United States, utilized its Ethereum-based Onyx blockchain and Tokenized Collateral Network (TCN) for the first time. The world's largest asset manager, BlackRock, tokenized shares of one of its financial market funds and used the tokens as collateral for an over-the-counter (OTC) derivatives trade with Barclays, one of the largest banks in Europe.

Car Manufacturers Accepting Cryptocurrencies as Payment
Japanese automotive giant Honda initiated a partnership with FCF Pay, a company specializing in cryptocurrency payments. This collaboration enabled the purchase of Honda products using cryptocurrencies as a payment method. FCF Pay allows payments with 46 different cryptocurrencies, including Bitcoin and Ethereum.

Italian luxury sports car manufacturer Ferrari, one of the most famous in the world, also announced that it had begun accepting cryptocurrencies as a payment method. Ferrari did this in partnership with BitPay, a company specializing in cryptocurrency payments. Three cryptocurrencies can be used as payment methods, all of which are part of Northcrypton's offerings: Bitcoin, Ethereum, and the stablecoin USDC. Initially, these cryptocurrencies are accepted as payment methods only in the United States, but Ferrari intends to expand this option to Europe in early 2024.

Smart Contracts Coming to Bitcoin?
In early October, Bitcoin developer Robert Linus introduced the BitVM computing paradigm, which could enable smart contracts on Bitcoin without requiring a soft fork to Bitcoin's base layer, similar to the ones familiar from Ethereum. A smart contract is an agreement that executes specific conditions when predetermined criteria are met. BitVM makes this possible because it performs operations outside of Bitcoin's blockchain. In practice, as described by Linus, BitVM could make any computational function verifiable on Bitcoin. However, BitVM is still at a theoretical stage, so the introduction of smart contracts on Bitcoin is unlikely to happen in the coming weeks or months.

Positive Comments and Forecasts on Bitcoin and Cryptocurrencies
Arthur Hayes, founder of cryptocurrency exchange BitMEX and a macroeconomics expert, predicted in an early October interview that Bitcoin's price could reach as high as $750,000 to $1,000,000 by 2026. Hayes' forecast was based on factors such as Bitcoin's limited supply, the potential for Bitcoin spot ETFs in major countries, and geopolitical uncertainty.

Paul Tudor Jones, a U.S.-based hedge fund manager with over $7 billion in net worth, and a well-known investor, commented on the macroeconomic situation and Bitcoin in early October. Tudor Jones currently recommends a combination of Bitcoin and gold. He advises others to include Bitcoin and gold in their investment portfolios to a greater extent at present. He, like Hayes, cited geopolitical uncertainty as a reason for this recommendation. Additionally, Tudor Jones highlighted the challenging political situation in the United States.

Larry Fink, the CEO of BlackRock, commented on cryptocurrencies in an interview following the erroneous Bitcoin spot ETF news. Fink suggested that Bitcoin's mid-October price surge was driven by factors beyond the false ETF news. He also pointed to global geopolitical uncertainty and believed that the price increase was related to a "flight to quality." Furthermore, Fink predicted that more people would gravitate towards quality assets such as government bonds, gold, and cryptocurrencies.

Summary
October was an exceptionally positive month in terms of cryptocurrency news and price movements. The prices of many cryptocurrencies saw significant increases, some even in the double digits. At the same time, the approval of a Bitcoin spot ETF in the United States became increasingly likely. Additionally, JPMorgan made a significant stride in utilizing the blockchain technology underpinning cryptocurrencies, in collaboration with two other major financial players. The acceptability of cryptocurrencies as a payment method continued to grow in October, with automakers Honda and Ferrari both announcing their plans to accept cryptocurrencies. October also brought positive news for Bitcoin's technical development, with smart contracts on Bitcoin becoming more realistic. Positive forecasts and comments about Bitcoin and cryptocurrencies were prevalent throughout the month. While these forecasts and comments do not guarantee the future, they serve as a reminder of the potential of cryptocurrencies.


Ville Viitaharju
Cryptocurrency specialist