Amid technically uncertain-to-bearish price charts, this week is notably quiet in terms of scheduled events related to crypto markets. September, however, is packed with significant events and has chances to provide a few surprises.
This week’s upcoming macro data includes ISM Services PMI on Wednesday and U.S. initial jobless claims on Thursday. Nevertheless, it’s unlikely that either of these events will substantially impact the dollar index and, consequently, on Bitcoin and crypto. But this is not the case for the rest of the month.
1. Bitcoin Spot ETF Decision?
The market eagerly awaits the approval of a spot bitcoin ETF, and Grayscale’s recent court victory against the SEC has raised hopes for such approval. JPMorgan analysts believe this legal win may pressure the SEC to approve spot bitcoin ETFs, but the timing of such a decision remains uncertain.
Despite the wait, many analysts are leaning toward a second delay from the SEC in mid-October. The first “final” deadline for Ark is set for January 10, further adding to the uncertainty. The somewhat sluggish market reaction to Grayscale’s victory, followed by a quick pullback, reflects the cautious optimism that has been building up for a long time.
However, Grayscale’s victory introduced an element of unpredictability. The window for appealing the court’s decision closes on October 14, coinciding with the second deadline for major organizations such as BlackRock, Fidelity, and Invesco. On the other hand, while a final decision to create a Bitcoin spot ETF in September seems unlikely, negotiations between Grayscale and the SEC could lead to unexpected developments.
2. US CPI Release On September 13th
The September Consumer Price Index (CPI) report, scheduled on September 13, will provide fresh data about inflation trends in the U.S. After a period of decline, the CPI showed an unexpected increase in July, causing concern in financial markets.
While the Fed has expressed some optimism about the latest CPI reports, Jerome Powell, Chairman, underscored the volatility of economic indicators in his recent comments. If the September CPI reveals somewhat alarming inflationary trends, it could lead to another interest rate hike in 2023, which is inherently negative for risk assets.
3. FOMC Meeting On September 20th
The upcoming Federal Open Market Committee (FOMC) meeting on September 20 is another pivotal event in the financial calendar. It will be held against the backdrop of the recent surge in CPI and the PCE data, which remains at 3.3%, far from the Fed’s 2% inflation target. At the same time, the market sentiment is leaning heavily toward a pause in rate hikes with a 93% probability.
Markets will closely watch Jerome Powell’s speeches for hints on the Fed’s future direction. Amid the mixed picture in recent economic data, a pause in rate hikes seems likely unless there is another significant jump in CPI.
4. Some Smaller Crypto Events
Decentralized exchange dYdX is set to launch a major V4 update on its Cosmos app-chain. A significant change is the introduction of an in-memory order book overseen by dYdX chain validators. This move signifies a shift towards greater decentralization, as trading revenues will no longer flow to centralized entities like dYdX Trading Inc.
With a current market value of $362 million and a fully diluted valuation of $2.09 billion, the upcoming revenue-sharing model for dYDX token holders holds substantial promise. However, one should keep in mind that 40% of DYDX tokens are scheduled to unlock in December.
Coinbase’s Base platform is gaining traction in the crypto community, with a total blockchain value (TVL) of $400 million since its inception. Notably, $190 million is associated with Aerodrome, known for its incentive farms and token airdrops. While TVL volume may stabilize at this level, the upcoming launch of major protocols on Base in September is expected to attract even more liquidity. Notable projects on Base include Curve, Uniswap, 1Inch, and Aave.