Welcome to the institutional newsletter, Crypto Long & Short. This week:
- Andy Baehr of CoinDesk Indices offers a “Vibe Check,” telling the story of two markets: fast money and slow money.
- CoinDesk’s Sam Ewen says it’s no surprise why internet-native communities want internet-native currencies, and why stablecoins are the logical bridge. .
- In the “Chart of the Week” we look at the decline in Ethena USD and the causes of this decline.
As always, connect with me on LinkedIn to share topics you’d like to cover in future newsletters. Thanks for joining us!
-Alexandra Lévis
Checking the ambiance
Fast money, slow money
– By Andy Baehr, CFA, Head of Product and Research, CoinDesk Indices
Fast money has been keeping his distance lately. Two months ago, on a Sunday afternoon Eastern Time, a whale dumped 24,000 bitcoins into thin liquidity, spooking the market and sending prices lower. ETH’s all-time high of $4,955 only occurred a few hours ago. The broad six-month rally that pushed the CoinDesk 20 Index to its own all-time high of 4,493 has come to an end. SOL tried to carry the baton on another leg, but the market did not follow.
The Fed’s rate cut on September 17 – a quarter point and two more reported – could not revive the momentum. Geopolitical tensions and tariff fears weighed on risk appetite. DAT corrected for high sugar levels. When Bitcoin hit a new all-time high in early October, it seemed like the coast was clear. Then came October 10: President Trump’s announcement of 100% tariffs on Chinese imports triggered the most severe liquidation event in crypto history. Questions about the structure and fragility of the market have multiplied. People AI”automatic debt reduction“The current government shutdown hasn’t helped the mood either. Even gold, defying gravity all year, is down 5.7% from last week’s high, the biggest one-day drop in more than 10 years. My YouTube feed showed Moses the jeweler taking a chilled Audemars Piguet to the melter, harvesting the gold. If that’s not a high, what is?
Big stocks and benchmarks have had a tough time over the past two months
Source: CoinDesk Indices
slow moneyhowever, never stopped.
The mergers and acquisitions continued: Coinbase acquired Echo for $375 million. FalconX purchased 21 shares. Ripple has completed the acquisition of Hidden Road for $1.25 billion, renaming it Ripple Prime.
Advanced Regulation: The SEC approved generic listing standards on September 17, reducing review times for crypto ETFs from 240 days to 75 days. The SEC also approved GDLC, the first crypto ETF in the United States to track a market index, the CoinDesk 5.
Accelerated onboarding: JPMorgan will accept bitcoin and ether as collateral for institutional loans. Jamie Dimon’s ‘pet rock’ now backs loans from the world’s largest bank.
The asset class continued to grow, integrate and mature – even as prices tested confidence. Today, Bitcoin is exactly where it was two months ago, before the whale struck. ETH and SOL have reclaimed key levels and have room to perform. The fast money may be back, but the slow money never left.
Expert Views
Stablecoins and Internet Native Money
– By Sam EwenHead of Social Media, Multimedia and Media Innovation, CoinDesk
Vice is 31 years old.
Sims is 25 years old.
Facebook is 21 years old.
Roblox is 19 years old.
Minecraft is 16 years old.
Instagram is 15 years old.
All but two existed before Bitcoin.
The rise of crypto has not only created a new form of money: it has matured alongside an entire generation growing up in digital economies. Gamers and social media participants—the true Internet generation—were building, trading, collecting, and socializing in virtual worlds long before “Web3” had a name. They are now adults with purchasing power, investment theses, and deep intuition about how value moves online.
It’s no surprise that Internet-native communities want Internet-native currencies. Stablecoins are the logical bridge – the technology best positioned to capture this generational and behavioral shift.
If you were 30 in 2000, entering your credit card on a website seemed risky. Today, more than $16 billion is spent on e-commerce every day. Trust has evolved with time and experience. The same thing will happen with digital currency. Age matters – and today’s young consumers, entrepreneurs and investors are accustomed to digital value.
Now zoom out. Between 75 and 88% of the planet still falls under what is called Global South: those who live outside the first world, the so-called “Western” countries. Places where traditional banking infrastructure lags behind connectivity. One example is sub-Saharan Africa where, as Chainaylsis recently reported, “a sudden currency devaluation led to increased crypto adoption…[and] more users are moving[d] in crypto to protect against inflation. Combine necessity with a population becoming increasingly digitally savvy and money moving at the speed of light, and the stablecoin thesis becomes impossible to ignore.
Over the past month, I have been on the ground in Rio, Seoul and Singapore. Three very different cities – but the same conversation everywhere: stablecoins and cross-border payments.
Make no mistake: the digitalization of money is accelerating and traditional controllers are officially on notice. Evolve – or be disrupted. Lead this disruption? Blockchain and stablecoins.
Chart of the week
Let’s look at Ethena’s USDe, which recently fell from $14 billion to $10 billion in the last 30 days. This decline is a direct result of USDe yield compression driven by BTC and ETH perpetual funding rates. The blended rate has recently fallen into negative territory on several occasions, but has now returned to a more favorable range of 2-4%. This fundamental recovery in funding will quickly restore the yield proposition of USDe, thereby encouraging the return of capital to the stablecoin and reversing the recent downward trend in its market capitalization.
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Looking for more? Get the latest crypto news at PK Press Club.com and market updates at PK Press Club.com/indices.
