CoinDesk 20 Index: 2,140.40 -0.60%
Bitcoin (BTC): $72,289.97 +0.11%
Ether (ETH): $2,631.15 -1.26%
S&P 500: 5,813.67 -0.33%
Gold: $2,778.66 -0.35%
Nikkei 225: 39,081.25 -0.5%

A message from Morph

Bitcoin appears to be taking a breather as October draws to a close, trading around $72,500 during the late European morning, about 0.3% higher in the last 24 hours. The broader digital asset market has fallen nearly 0.9%, as measured by the CoinDesk 20 Index, with ETH and SOL lower by 1.15% and 0.3%, respectively. Bitcoin has gained over 6% in the last week, so the temporarily muted price action may point toward profit-taking. Nevertheless, spot bitcoin ETFs registered $893 million of inflows on Wednesday, a second consecutive day of over $850 million. The strong showing was almost entirely attributable to BlackRock's IBIT, which added $872 million.

ETFs' net inflows are a sign of institutional demand as bitcoin’s dominance continues to grow, traders said. “Strong BTC net inflows indicate robust institutional demand as BTC dominance continues to rise (59.8%),” Augustine Fan, head of insights at DeFi platform SOFA, told CoinDesk. “Equities are trading with a distinctive ‘Trump-win’ flavor despite official betting odds still calling for a 50–50 race. Similar positive skews can be observed in gold and crypto prices with call skews being bid up post-election as a hedge." Skew refers to the shape of the distribution of returns for a financial asset. Positive skew in an options market context indicates that there's an increased demand for call options relative to put options. This means more investors are buying options betting on the price of the asset to go higher.

The outcome of next week's presidential election doesn't really matter in the context of mainstream bitcoin adoption through ETFs, according to Darius Sit, the chief investment officer of QCP Capital. While there may be some volatility depending on whether Donald Trump or Kamala Harris emerge victorious, the broader integration of bitcoin into American finance through firms like BlackRock is far more important, Sit said in an interview at Hong Kong Fintech Week. "When you have [BlackRock CEO] Larry Fink on CNBC talking about how bitcoin is a store of value, that's when you know crypto has become a part of the American investing narrative," he said. "BlackRock has brought crypto from frontier to mainstream."

Coinbase shares fell over 2% in pre-market trading after the crypto exchange reported a top-line miss for the third quarter.

KBW noted that total net revenue of $1.1 billion was 3% below its forecast and 5% below consensus estimates. The miss was driven by lower transaction revenues and a drop in subscription and services revenues, the investment bank said.

Still, reduced operating expenses more than offset the revenue miss and contributed to a better figure for adjusted EBITDA, said KBW, which has a market perform rating on the stock and a $165 price target.

Institutional interest in Coinbase is growing as it has become a more meaningful component of various stock indices, which is a positive development, JMP said. The broker has a market outperform rating on Coinbase shares with a $320 price target.

Canaccord noted that Coinbase continued to grow its business model in the quarter, despite lower market volatility and trading volumes, with more revenue coming from recurring sources such as staking and custody.

- Jamie Crawley