Gemini Markets: Inflation Weighs Down Crypto

Welcome to Gemini Markets, your weekly read on crypto, stocks and equities, and prediction markets, all in one super app. This is the newsletter that will help inform you about what’s driving crypto and stock prices, tradfi market trends, and prediction market trends.

📈 Crypto Markets Overview

Crypto retreats after inflation data trends higher: The price of bitcoin and other top cryptocurrencies slumped Wednesday after the Consumer Price Index jumped 0.6% in September, up from 0.4% in August and 3.7% from the same period a year earlier. The hot reading increased the odds the Federal Reserve may ultimately be forced to raise interest rates multiple times to bring inflation in line with the committee’s 2% target. The possibility of an extended hiking cycle pushed bitcoin back under $82,000 before it rebounded on Thursday, while ethereum dropped below $2,500, putting a damper on the possibility of another Uptober for the crypto market.

BlackRock’s crypto ETFs continue rebound: BlackRock reported $7.9 billion in inflows across the asset manager’s digital asset funds during Q3, bringing the firm’s total AUM for crypto ETFs to $79.6 billion. The asset management giant’s crypto holdings have yet to rebound from the crypto bear market; the firm managed approximately $104 billion in crypto at its peak last year. But in Q3 it did add $30.8 billion in AUM across crypto funds, with $7.9 billion coming via inflows and $22.9 billion coming via market gains from crypto’s recent rally.

EasyA eyes $1.1B valuation via direct listing: EasyA, a startup that allows developers to build blockchain and AI applications, plans to go public early next year that could value the company at around $1.1 billion, according to reports. The company also hopes to make its equity available via tokenized shares. It says it has more than 1.3 million users and works with companies including Ripple and Solana. EasyA originally filed a draft filing with the SEC to go public in late September.

Last month, Gemini launched Morning Motion, a live recorded podcast hosted by Austin Oakes and Jeremy Marino that covers financial markets, emerging technology, and whatever else has the internet paying attention. Expect fresh takes, conversations with traders, builders, creators, and a few tangents worth sticking around for.

The hosts recently spoke with Pete Rizzo about Bitcoin’s early days, the threat from quantum computing, and why Bitcoin wouldn’t work on Mars.

Listen to the latest episodes on Spotify or Apple Podcasts.

📊 Stocks & Equities

Chip stocks drop amid market pullback: A gauge of major chip stocks known as the Philadelphia Semiconductor Index fell 4.3% on Wednesday, continuing a recent stretch in which the index dropped 12% the past six trading sessions. The rout has erased $1.6 trillion in value during that stretch, with investors increasingly worried about the prospect of more than one rate hike and increasing global AI competition. The broader market also struggled on Wednesday, with the Nasdaq dropping approximately 2% and the S&P 500 losing 1.1%.

Barclays predicts SpaceX and Tesla will announce merger this year: A group of analysts led by Barclays' Dan Levy said Elon Musk’s Tesla could announce a merger with SpaceX before the electric car company’s general meeting on December 6. Analysts have long anticipated a potential merger between the two companies; SpaceX had reportedly considered merging with Tesla previously before opting to purchase xAI. Any combination would need to be approved by both SpaceX and Tesla shareholders before it could become official.

🔮 Prediction Markets

Traders still favor no rate hike in October: Even with the Bureau of Labor Statistics reporting year-over-year inflation of 3.7% in September, traders still do not anticipate the Federal Reserve to hike interest rates at their meeting later this month. On Wednesday, there was a 69% chance the Fed maintains rates at their current level, with just 31% pricing in a potential hike of 25 basis points. Trade the Fed decision here.

Seahawks enter Thursday Night Football as favorites: Fans of old AFC West rivalries should tune in Thursday when the Seattle Seahawks face the Denver Broncos at Mile High Stadium. Both teams sit at 3-2 and will be wearing their throwback uniforms. Traders currently think the Seahawks hold the edge, giving the defending Super Bowl champions a 57% chance of winning. Trade Seahawks-Broncos here.

Traders hoping Uptober isn’t canceled: Uptober hasn’t gotten off to the start traders had hoped, but there’s still some optimism it could rebound off recent lows below $82,000. Late Wednesday, traders had priced in a 39% chance the price of bitcoin will end the month at $85,000 or higher. Trade monthly bitcoin price here.

Onward and Upward,
Team Gemini

^*This material is for informational purposes only and is not (i) an offer, or solicitation of an offer, to invest in, or to buy or sell, any interests or shares, or to participate in any investment or trading strategy, (ii) intended to provide accounting, legal, or tax advice, or investment recommendations, or (iii) an official statement of Gemini. Gemini, its affiliates and its employees do not make any representation or warranty, expressed or implied, as to accuracy or completeness of the information or any other information transmitted or made available. Buying, selling, and trading cryptocurrency involves risks, including the risk of losing all of the invested amount. Recipients should consult their advisors before making any investment decision. Any use, review, retransmission, distribution, or reproduction of these materials, in whole or in part, is strictly prohibited in any form without the express written approval of Gemini.