Casey Wagner

<div id="highlights-block_62d9bcb189908" class="highlights">
        <ul>
                <li>Lido Finance has issued a new proposal to help fund the DAO for the next two years</li>
                <li>Voting has not yet opened, but Dragonfly Capital could be the buyer of 2% of LDO’s total supply if the proposal passes</li>
            </ul>
    
</div>



<p>The Lido Finance DAO has rolled out a governance proposal to diversify the asset makeup of its treasury in an effort to serve as a buffer against current market conditions.</p>



<p>The plan ought to ensure the Lido <a href="https://cms.blockworks.co/tag/DAOs/" target="_blank" rel="noreferrer noopener">DAO</a> (decentralized autonomous organization) will have enough capital to fund operating expenses for roughly two years.</p>



<p><a href="https://cms.blockworks.co/tag/lido/" target="_blank" rel="noreferrer noopener">Lido</a> suggested selling 2% of its native token, LDO, from the DAO treasury. The token will be priced at a 7-day time weighted average price (TWAP) under a 50% premium, roughly $1.45 per token. On Thursday, LDO traded around $1.50.</p>



<p>Digital asset-focused venture capital firm <a href="https://cms.blockworks.co/tag/dragonfly-capital/" target="_blank" rel="noreferrer noopener">Dragonfly Capital</a> is in the running to purchase a sizable number of tokens, according to Lido — although there are “a number of interested parties” the collective did not identify. </p>



<p><a href="https://www.linkedin.com/in/adamscochran/">Adam Cochran</a>, general partner at venture capital firm Cinneamhain Ventures, told Blockworks he doesn’t “think the deal is adequately priced.”</p>



<p>“Whenever you&#8217;re buying a block of tokens from the team over the counter, you are both impacting the circulating supply and avoiding price slippage, so there is a baked-in price discount,” Cochran said.</p>



<p>If the proposal is approved and Dragonfly leads the buy, it could mark a new era for DAO treasury management.&nbsp;</p>



<p>“This type of structure should have already been more common because it doesn&#8217;t make sense for your treasury to be fully in your own token,” said Mika Honkasalo, a digital asset researcher and investor. “You need to have proper runway and you can&#8217;t rely on the market always being on your side.”&nbsp;</p>



<p>The majority of LDO’s treasury is at present made up of the organization’s native token — equating to some $237 million — according to <a href="https://tokenterminal.com/terminal/projects/lido-finance" target="_blank" rel="noreferrer noopener">data</a> from Token Terminal. $366 is now held in stablecoin USD Coin. </p>



<p>Despite being at odds when it comes to pricing, Cochran said the investment would be a smart move for Dragonfly as current volatile market conditions continue.</p>



<p>“Right now, after a collapse of a lot of speculation in the space, there is a huge incentive for investors to back projects that have a path to revenue and ownership of key infrastructure,” Cochran said. “Lido is one of a handful of projects that has both that opportunity and a product market fit, and I think the interest in these types of projects is going to continue to grow as we face uncertainty in macroeconomic conditions and as we see some of the froth come off the crypto space.”&nbsp;</p>



<p>Voting for the <a href="https://research.lido.fi/t/treasury-diversification-2/2570" target="_blank" rel="noreferrer noopener">proposal</a>, which was released Monday, has not opened yet. </p>



<p>“I think people are on board with a variation of [the proposal], for sure,” Honkasalo said. “If you have to raise, you have to raise. Some version of it will get passed.”</p>



<hr class="wp-block-separator has-alpha-channel-opacity"/>



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In Buffer Against Bear Market, Lido Opens New Door for DAO Money Management

Bessie Liu

<div id="highlights-block_62ac9bb3f01d7" class="highlights">
    
</div>


<div id="highlights-block_62ac9c778463f" class="highlights">
        <ul>
                <li>The majority of stakers on Lido are on Ethereum, but LDO holders possess governance power over other chains</li>
                <li>Lido hosted a conversation about the proposal on Twitter Spaces</li>
            </ul>
    
</div>



<p>The DAO overseeing Lido, the largest provider of staking services for Ethereum, has proposed a switch up of its governing system to “reduce the existing scope of governance” for its token holders.</p>



<p>Lido DAO, a decentralized autonomous organization, is governed by the holders of the DAO’s governance token, LDO — holders participate in transparent on-chain voting to decide on platform parameters and proposals.&nbsp;</p>



<p>Although the Lido DAO is currently deployed on Ethereum, LDO holders possess governance power over liquid staking protocols on other chains, including Polygon and Solana.</p>



<p>Under the DAO&#8217;s current multichain governance system, LDO holders have incentives related to other chains, which are “not necessarily aligned with those of Ethereum network participants,” Sam Kozin, lead smart contract developer at Lido, wrote in a <a href="https://research.lido.fi/t/ldo-steth-dual-governance/2382" target="_blank" rel="noreferrer noopener">blog post</a>.&nbsp;</p>



<p>To solve this problem, the Lido team has proposed a dual governance solution that sits between LDO holders and stakers. The proposal will introduce “a dispute and resolution mechanism for misaligned incentives between stakers and LDO holders.”&nbsp;</p>



<p>“This [resolution] mechanism is designed to be triggered when LDO governance becomes captured as a result of attacks or misaligned with stakers and the network, because this mechanism allows two stakers to block governance decisions, it has the effect of disincentivizing LDO governance from executing decisions that go against the stakers interests,” Kozin said during a Twitter spaces event on Thursday, held to discuss the dual governance proposal.</p>



<p>During the general decline in the crypto market, Lido’s staked ethereum (stETH) tokens have <a href="https://cms.blockworks.co/will-lido-staked-ether-trigger-the-next-big-crypto-crash/" target="_blank" rel="noreferrer noopener">been losing value</a>, relative to ether, and this split has contributed to a liquidity squeeze in the crypto market. Although each stETH token is fully backed by ether locked in Ethereum’s Beacon Chain, stETH will not be redeemable for ether on a 1:1 basis until after the blockchain’s <a href="https://cms.blockworks.co/shadow-forks-and-testnets-the-ethereum-merge-approaches/" target="_blank" rel="noreferrer noopener">Merge</a> and a subsequent network upgrade to enable withdrawals projected to occur sometime in 2023. As a result, stETH is trading below 0.94 ETH per token as of Friday at 8:00 am ET, exacerbated by heavy selling from <a href="https://cms.blockworks.co/blockfi-says-it-liquidated-a-large-client-amid-3acs-margin-calls/" target="_blank" rel="noreferrer noopener">struggling</a> crypto hedge fund firm Three Arrows Capital.</p>



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true"><p lang="en" dir="ltr">people think Celsius is the biggest stETH dumper but its 3AC and it isnt relatively close, they are dumping on every account and seed round address they have, most looks like its going to payback debts and outstanding borrows they have <a href="https://t.co/9bZnmTXQzj">pic.twitter.com/9bZnmTXQzj</a></p>&mdash; moon (@MoonOverlord) <a href="https://twitter.com/MoonOverlord/status/1536697618797142016?ref_src=twsrc%5Etfw">June 14, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



<p>Hasu, a prominent though pseudonymous blockchain researcher and strategic adviser to Lido, believes that for the protocol to grow and capture more revenue, “the community, the team developers need to trust that Lido isn’t something that will harm Ethereum.”</p>



<p>“The more governance power you have in your protocol, the more the governance and participants are incentivized to exploit and extract money from it by doing something that&#8217;s against the protocol,” Hasu said. “Less governance will make it easier for people to trust us and will save us a lot of money.”</p>



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Lido DAO Proposes Governance Switch Up

Sam Martin

<div id="highlights-block_60c9fc7f1690b" class="highlights">
        <ul>
                <li>Bitcoin supply is becoming illiquid while CME futures activity picks up</li>
                <li>Bitcoin dominance continues its rally</li>
            </ul>
    
</div>



<h3 class="wp-block-heading">Expert Insight</h3>



<p>&#8220;We know at Genesis that the institutions are increasing their interest because we talk to them, but you know institutions take time to get all the due diligence. So, we know that the interest has been building. We also know that the liquid supply of Bitcoin has been declining because this is something you can see by simply looking at the on-chain data. </p>



<p>The buyers so far this year have mostly been long-term holders, which means that as more and more Bitcoin gets bought and tucked away in cold storage for investment purposes, there is less liquid supply for new buyers to purchase. So you have a growing institutional interest against the backdrop of declining liquid supply.&#8221;</p>



<p>-Noelle Acheson, Head of Market Insights at Genesis </p>



<h3 class="wp-block-heading">Bitcoin</h3>



<p>Historically speaking, the Bitcoin price and S&amp;P 500 have had a tight correlation. Since the beginning of October, that correlation has begun to weaken. Whether the trend will continue remains to be seen. </p>



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="910" height="661" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/10/BTCUSD_2021-10-06_16-57-52.png" alt="" class="wp-image-9052" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/10/BTCUSD_2021-10-06_16-57-52.png?w=910 910w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/BTCUSD_2021-10-06_16-57-52.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/BTCUSD_2021-10-06_16-57-52.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/BTCUSD_2021-10-06_16-57-52.png?w=354 354w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/BTCUSD_2021-10-06_16-57-52.png?w=359 359w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/BTCUSD_2021-10-06_16-57-52.png?w=301 301w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/BTCUSD_2021-10-06_16-57-52.png?w=80 80w" sizes="(max-width: 910px) 100vw, 910px" /><figcaption>Source: Trading View</figcaption></figure>



<p>BTC futures open interest on CME, a futures exchange where a lot of institutional activity takes place, has <a href="https://www.forbes.com/sites/javierpaz/2021/10/06/as-bitcoin-passes-55000-cme-futures-data-even-more-bullish/?sh=6459c277778c&amp;utm_source=TWITTER&amp;utm_medium=social&amp;utm_content=5658840587&amp;utm_campaign=sprinklrForbesCrypto" target="_blank" rel="noreferrer noopener">risen 33% </a>from September 7th to October 5th. </p>



<p> &#8220;The other thing that screams that this is institutionally driven for me is the CME basis. The CME derivatives exchange offers the lowest leverage of any crypto derivatives exchange,&#8221; Noelle Acheson of Genesis told Blockworks. &#8220;And yet the basis, which is the difference between the futures price on the CME and the spot price, started shooting up this morning. It&#8217;s now even higher than the basis on some of the other higher leverage futures exchanges.&#8221;</p>



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="959" height="536" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/10/CME-OI.jpg" alt="" class="wp-image-9054" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/10/CME-OI.jpg?w=959 959w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/CME-OI.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/CME-OI.jpg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/CME-OI.jpg?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/CME-OI.jpg?w=467 467w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/CME-OI.jpg?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/CME-OI.jpg?w=80 80w" sizes="(max-width: 959px) 100vw, 959px" /></figure>



<h3 class="wp-block-heading">Ethereum</h3>



<p>With some of the other major Layer-1&#8217;s such as Solana ($SOL), Terra ($LUNA), and Binance Smart Chain ($BSC) underperforming and $ETH holding its ground, it appears that the rotation into the blue-chips of the digital asset industry is underway. </p>



<p>The put:call ratio for Ethereum sits at 0.647, according to <a href="https://app.laevitas.ch/dashboard" target="_blank" rel="noreferrer noopener">laevitas.ch</a>, signaling that traders are heavily favoring calls over puts. Perpetual funding rates are fairly high on some of the exchanges with the largest volume, indicating that traders taking a long position are paying hefty premiums to hold their position. It is currently at a 60.13% APR on the Binance ETH/USDT pair. </p>



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="980" height="296" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-06-at-5.42.15-PM.png" alt="" class="wp-image-9056" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-06-at-5.42.15-PM.png?w=980 980w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-06-at-5.42.15-PM.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-06-at-5.42.15-PM.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-06-at-5.42.15-PM.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-06-at-5.42.15-PM.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-06-at-5.42.15-PM.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-06-at-5.42.15-PM.png?w=80 80w" sizes="(max-width: 980px) 100vw, 980px" /><figcaption>Source: https://app.laevitas.ch/dashboard/eth/derivs</figcaption></figure>



<h3 class="wp-block-heading">Non-Fungible Tokens (NFTs)</h3>



<p>NFTs continue their hot streak, notching $10 billion in sales for 2021 as of today according to a <a href="https://www.cnbc.com/2021/10/06/nft-trading-volume-hit-10-billion-2-reasons-why-people-are-buying.html" target="_blank" rel="noreferrer noopener">report from CNBC.</a> Bank of America also released an <a href="https://cms.blockworks.co/?p=9007" target="_blank" rel="noreferrer noopener">extensive report </a>on digital assets and had some interesting words on NFTs; “NFTs can be used instead of deeds, titles or anything currently needed to demonstrate ownership — and all without a middleman charging a fee”. Trading data from <a href="https://opensea.io/rankings" target="_blank" rel="noreferrer noopener">OpenSea</a> and <a href="https://solanalysis.com" target="_blank" rel="noreferrer noopener">Solanalysis</a> of some of the top Solana and Ethereum projects.</p>



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="358" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-06-at-5.59.09-PM-1024x358.png" alt="" class="wp-image-9062" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-06-at-5.59.09-PM-1024x358.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-06-at-5.59.09-PM-1024x358.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-06-at-5.59.09-PM-1024x358.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-06-at-5.59.09-PM-1024x358.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-06-at-5.59.09-PM-1024x358.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-06-at-5.59.09-PM-1024x358.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-06-at-5.59.09-PM-1024x358.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-06-at-5.59.09-PM-1024x358.png?w=1274 1274w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>Top Ethereum Projects</figcaption></figure>



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="293" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-06-at-5.59.47-PM-1024x293.png" alt="" class="wp-image-9063" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-06-at-5.59.47-PM-1024x293.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-06-at-5.59.47-PM-1024x293.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-06-at-5.59.47-PM-1024x293.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-06-at-5.59.47-PM-1024x293.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-06-at-5.59.47-PM-1024x293.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-06-at-5.59.47-PM-1024x293.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-06-at-5.59.47-PM-1024x293.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-06-at-5.59.47-PM-1024x293.png?w=1235 1235w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>Top Solana Projects </figcaption></figure>



<h3 class="wp-block-heading">DeFi</h3>



<ul><li>Fei protocol, a project that aims to create a decentralized stable coin, made a <a href="https://medium.com/fei-protocol/introducing-fei-v2-6f56afe7a1b5" target="_blank" rel="noreferrer noopener">large upgrade</a> to the Fei mechanism. </li><li>Lido Finance, a non-custodial staking solution, <a href="https://blog.lido.fi/vulnerability-response-update/" target="_blank" rel="noreferrer noopener">responds</a> to some vulnerabilities that were reported yesterday. </li><li>Olympus DAO unveils a new service that aims to share Olympus&#8217; bond innovation with treasuries across DeFi, <a href="https://twitter.com/chasedevens/status/1445800257325912064?s=20" target="_blank" rel="noreferrer noopener">per messari analyst, Chase Devens.</a></li></ul>



<p>Total Value Locked (TVL) in DeFi is hovering around all-time-highs. </p>



<figure class="wp-block-image size-large"><img decoding="async" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-06-at-6.19.58-PM-1024x340-1.jpg" alt="" class="wp-image-9065"/><figcaption>Source: Defi Llama</figcaption></figure>



<h3 class="wp-block-heading">What else we are looking out for&#8230;</h3>



<ul><li>Initial and continuing jobless claims on Thursday</li><li>Nonfarm payrolls, unemployment rate and average hourly earnings on Friday</li></ul>



<p>That is all for today, folks. Let&#8217;s do this again at the same time tomorrow. </p>



<hr class="wp-block-separator"/>



<p><strong>Are you a UK or EU reader that can&#8217;t get enough investor-focused content on digital assets?<a target="_blank" href="https://cms.blockworks.co/events/das-london/" rel="noreferrer noopener">Join us</a>&nbsp;in London on November 15th and 16th for the Digital Asset Summit (DAS) London. Use code ARTICLE for £75 off your ticket.&nbsp;<a target="_blank" href="https://cms.blockworks.co/events/das-london/" rel="noreferrer noopener">Buy it now</a>.</strong></p>



<hr class="wp-block-separator"/>


Bitcoin Reclaims $55,000 on Strong Fundamentals: Markets Wrap

<div id="highlights-block_60c9fc7f1690b" class="highlights">
        <ul>
                <li>Bitcoin dominance up sharply on today&#8217;s rally</li>
                <li>US Bank launches crypto custody service to satisfy demand</li>
            </ul>
    
</div>



<p>The NASDAQ and Dow Jones closed the day up 1.25% and 0.92% respectively. </p>



<p><a href="https://cms.blockworks.co/banking-giant-launches-custody-services-for-bitcoin/" target="_blank" rel="noreferrer noopener">US Bank</a> will be launching a crypto custody solution powered by NYDIG. It will only offer bitcoin, with the intention to support additional coins over time.</p>



<p>Brazil is set to vote on a bill within the next few days to <a href="https://finance.yahoo.com/news/bitcoin-set-become-legal-payment-154644863.html?guccounter=1&amp;guce_referrer=aHR0cHM6Ly90LmNvL0JBQnlBVm9vYkY_YW1wPTE&amp;guce_referrer_sig=AQAAAIQkO8ZzOBl0aoKUt_nsS8PkNhQvgAetH_aKIpgFeO8PjIkkHSdHhQRJrnpSnq7NWLBdGiBiQm5yAJ6q53KgD-3lxKUM5sM9pqaafhXhPkopI_WhwJyacAXLboQPCauMMhMFi3TvNJAT3mOrXLQkMlipNxkp99NiPznVHFDCoIQm" target="_blank" rel="noreferrer noopener">regulate</a> Bitcoin in a way that encourages its use. </p>



<h3 class="wp-block-heading">DeFi/NFTs/Gaming</h3>



<ul><li>The game studio behind Axie infinity, Sky Mavis, received $152 million in a <a href="https://cms.blockworks.co/axie-infinity-developer-scores-152m-in-series-b-funding-nearing-3b-valuation/" target="_blank" rel="noreferrer noopener">series B funding</a> round led by Andreessen Horowitz. <a href="https://coinmarketcap.com/currencies/axie-infinity/" target="_blank" rel="noreferrer noopener">$AXS</a> was last trading at $130, down 6% after its remarkable run the past week. </li><li>ThorChain-based decentralized exchange, ThorSwap, <a href="https://finance.yahoo.com/news/thorswap-raises-3-75m-private-141222643.html" target="_blank" rel="noreferrer noopener">raised</a> $3.75 million in a private token sale. <a href="https://coinmarketcap.com/currencies/thorchain/" target="_blank" rel="noreferrer noopener">$RUNE</a> was last trading around $8.90. </li><li>Nexus Mutual (<a href="https://coinmarketcap.com/currencies/nxm/" target="_blank" rel="noreferrer noopener">$NXM)</a>, an insurance protocol built on top of ethereum, passed <a href="https://twitter.com/NexusMutual/status/1445327767474688007?s=20" target="_blank" rel="noreferrer noopener">proposal 157</a> to allocate nearly $50 million to earn ETH2.0 staking rewards through Lido Finance(<a href="https://coinmarketcap.com/currencies/lido-dao/" target="_blank" rel="noreferrer noopener">$LDO</a>), a liquid staking solution. </li></ul>



<h3 class="wp-block-heading">TradFi</h3>



<ul id="block-1209f037-00c3-4876-ad37-a29ab610c717"><li>China turns to <a href="https://www.reuters.com/world/asia-pacific/china-turns-stranded-australian-coal-combat-power-crunch-trade-2021-10-05/" target="_blank" rel="noreferrer noopener">abandoned coal mines</a> in Australia to combat coal shortages.</li><li>US ISM Sep services PMI data came in higher than expected at 61.9 vs. 61.7 in August. Yields on the 10-year treasury rose to <a href="https://www.cnbc.com/quotes/US10Y" target="_blank" rel="noreferrer noopener">1.534%</a> on the news. </li><li>US gas prices locked in their highest close in 12 years due to <a href="https://twitter.com/DeItaone/status/1445464140466704394?s=20" target="_blank" rel="noreferrer noopener">supply concerns</a>. </li></ul>



<h3 class="wp-block-heading">Insight</h3>



<p>“This month all eyes are on the SEC’s potential approval of a bitcoin ETF, and this is all the more relevant given two recent developments 一 at a conference last week, Gary Gensler reiterated his preference for a bitcoin futures ETF rather than one based on spot prices, which is relevant given that the proposals up for consideration this month are largely futures-based. Also, on Friday, the CME revealed that it was doubling the limits on initial BTC futures positions. Notably, the day that this new rule will come into effect is October 18th, the same day a decision by the SEC on the ProShares Bitcoin Futures Strategy ETF is due. This could be a coincidence, or it could be the CME planning for a potential surge in futures volumes,&#8221; said Noelle Acheson, Head of Market Insights at Genesis </p>



<h3 class="wp-block-heading">Bitcoin and Ethereum</h3>



<p>BTC dominance, or the percentage of the total crypto market capitalization BTC makes up, is up 5.16% over the last month. Historically speaking, rising BTC dominance sets the stage for alt coin rallies in the future. </p>



<div class="wp-block-image"><figure class="aligncenter size-full"><img loading="lazy" decoding="async" width="910" height="661" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/10/BTC.D_2021-10-05_17-44-29.png" alt="" class="wp-image-8975" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/10/BTC.D_2021-10-05_17-44-29.png?w=910 910w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/BTC.D_2021-10-05_17-44-29.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/BTC.D_2021-10-05_17-44-29.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/BTC.D_2021-10-05_17-44-29.png?w=354 354w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/BTC.D_2021-10-05_17-44-29.png?w=359 359w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/BTC.D_2021-10-05_17-44-29.png?w=301 301w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/BTC.D_2021-10-05_17-44-29.png?w=80 80w" sizes="(max-width: 910px) 100vw, 910px" /><figcaption>Source: Trading View</figcaption></figure></div>



<p>Perpetual funding rates for BTC are mixed across different exchanges, implying that traders are divided on whether to take a short or long position.  </p>



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="718" height="339" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-05-at-5.56.51-PM.png" alt="" class="wp-image-8978" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-05-at-5.56.51-PM.png?w=718 718w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-05-at-5.56.51-PM.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-05-at-5.56.51-PM.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-05-at-5.56.51-PM.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-05-at-5.56.51-PM.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-05-at-5.56.51-PM.png?w=80 80w" sizes="(max-width: 718px) 100vw, 718px" /><figcaption>Source: https://app.laevitas.ch/dashboard/btc/derivs</figcaption></figure>



<h3 class="wp-block-heading">Top 10 coins excluding stablecoins</h3>



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="362" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-05-at-6.00.16-PM-1024x362.png" alt="" class="wp-image-8979" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-05-at-6.00.16-PM-1024x362.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-05-at-6.00.16-PM-1024x362.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-05-at-6.00.16-PM-1024x362.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-05-at-6.00.16-PM-1024x362.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-05-at-6.00.16-PM-1024x362.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-05-at-6.00.16-PM-1024x362.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-05-at-6.00.16-PM-1024x362.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-05-at-6.00.16-PM-1024x362.png?w=1374 1374w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>Source: CoinMarketCap</figcaption></figure>



<ul><li>Despite all of the turbulence in traditional financial markets, bitcoin has shown a lot of strength over the past week, last up more than 23%. This is a narrative bitcoin investors would like to see continue. There will be a decision on a futures-backed ETF this month which could be another catalyst for an end of year rally. </li><li>The poor performance of alternative layer-1&#8217;s tells us that money is rotating into the blue chips; BTC and ether. </li></ul>



<h3 class="wp-block-heading">Regulatory News</h3>



<ul id="block-d64d70c9-7052-4f1a-8167-3d370fe08354"><li>Minnesota congressman, Tom Emmer, took to<a href="https://twitter.com/RepTomEmmer/status/1445461291145981958?s=20" target="_blank" rel="noreferrer noopener"> Twitter</a> to call out Gary Gensler for attempting to classify some digital assets as securities. He believes that would hurt retail investors more than it would help them. </li><li>Rep. Patrick McHenry (R-NC) introduced the <a href="https://republicans-financialservices.house.gov/news/documentsingle.aspx?DocumentID=408154" target="_blank" rel="noreferrer noopener">Clarity for Digital Tokens Act</a> today. This bill aims to keep innovation in the US and provide legal clarity to those involved with digital assets. </li><li>SEC chairman, Gary Gensler, echoed Jerome Powell&#8217;s comments that the US has no intentions <a href="https://www.bloomberg.com/news/articles/2021-10-05/sec-chief-signals-crypto-ban-like-china-s-won-t-happen-in-u-s" target="_blank" rel="noreferrer noopener">to ban crypto</a>. </li></ul>



<h3 class="wp-block-heading">What else we are looking out for&#8230;</h3>



<ul><li>ADP employment numbers on Wednesday</li><li>Initial and continuing jobless claims on Thursday</li><li>Nonfarm payrolls, unemployment rate and average hourly earnings on Friday</li></ul>



<p>That is all for today. Let&#8217;s do this again same time tomorrow. </p>



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