Tis the Season for Bitcoin: BTC Reclaims Trillion Dollar Market Cap as Banks Capitulate & Stocks Tumble

September's headwinds for bitcoin “have positioned the market to rally higher into and throughout Q4,” which is historically its best quarter, with an average return of 119%.

Bitcoin is back to leading the market.

After hitting an all-time high at about $65,000 in mid-April, Bitcoin had taken a back seat to let the altcoins experience a face-melting rally.

But now, after almost six months, Bitcoin has taken the reins back. On Wednesday, the price of BTC pumped as high as $55,700. This level was last seen on May 12, during the sell-off.

With this latest spike, Bitcoin has yet again become a trillion-dollar asset.

October is turning out to be a bullish month after the red month of September. Historically, not only Sept. has seen negative returns, but Q4 has also seen a substantial run-up.

Kraken Intelligence also noted in its research blog that September's headwinds for bitcoin “appear to have positioned the market to rally higher into and throughout Q4.” It added that the Q4 is bitcoin's historically best quarter, with an average and median return of 119% and 58%, respectively.

Futures Dominating Market

In the futures market, the funding rate on Bitcoin perpetual contracts is still normal, with the highest on FTX at 0.0320%. Delphi Digital stated,

“As BTC began to rally into October, basis didn’t rise as aggressively as one would’ve imagined. BTC has become a perpetuals and futures-dominated market.”

As for open interest for Bitcoin futures, it has climbed to $17.4 billion to early September levels.

OI for BTC options is on the rise as well, currently at $8.56 billion.

“The uptick coincided with BTC’s rally into the beginning of October. After a large expiry, OI tends to bounce back as freed-up capital from expirations moves back into the market.”

Banks are Capitulating

This week, we saw US Bancorp launching a crypto custody service for institutional investment managers and Bank of America Corp publishing its first crypto research coverage. Also, Soros Fund owns Bitcoin, revealed the CEO Dawn Fitzpatrick.

“The banks are capitulating one by one,” said Martha Reyes, head of research at digital asset prime brokerage BEQUANT.

“For those of us working in the space, the fact that it's too big to ignore is hardly news, and the regulators certainly aren't ignoring it.”

Bitcoin pumping is not only good for BTC itself but altcoins as well, as this means big players are entering the market, and it’s not just a few players trying to cash out and manipulate small market-cap coins.

During this bulls onslaught, altcoins are seeing gains, with Ether going to $3,625. Today’s other big gainer includes SHIB (24%), which has been enjoying a rally since the beginning of this week. ETH -0.79% Ethereum / USD ETHUSD $ 3,870.08
Volume 13.84 b Change -$30.57 Open $3,870.08 Circulating 117.96 m Market Cap 456.52 b
1 d Euphoria is Back Ahead of ETF Listings: Bitcoin Hits $63k and Ether Nearly $4k as NYSE Certifies “Approval for Listing” 1 d Bitcoin Breaks Through $61,000 as Euphoria & ‘Greed’ Brings the Money Back In 1 d Indexed Finance's NDX Is Down 92% from ATH After $16 Million Hack Sends it Crashing
Volume 1.29 b Change $0.00 Open $0.00 Circulating 10 t Market Cap 10.12 b
2 d CME Bitcoin Futures Open Interest Cracks A New ATH, Ethereum Aims for $4k Again 4 d Institutions Are Back to Pouring Money into Bitcoin as a “Perfect Storm” Brews for the King 5 d Crypto Outflows from China to Foreign Exchanges Fell by 40% After Govt. Strengthened Its Policies

The total market cap is now aiming for $2.4 trillion.

Stocks Are Taking A Beating

While Bitcoin and crypto are rejoicing with gains, global equity markets slid. The S&P 500 fell 0.77% and Nasdaq Composite lost 0.51%.

Meanwhile, the dollar rose 0.413% to 94.4 after a strong private payrolls report and surging energy prices fueling the inflation outlook and expectations that the Federal Reserve will soon start tapering.

However, while US private payrolls increased by 568,000 in September, according to the employment report from ADP, it has been an unreliable predictor of the non-farm payrolls data the Labor Department will release on Friday.

After warning about a 20% plunge in US stocks to be a real possibility about two weeks ago, Morgan Stanley’s Mike Wilson is now saying that this correction would be led by tech stocks because “earnings estimates are too high.”

“We’re in the final phase of this mid-cycle transition where growth is decelerating and markets correct.”

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