Hello, Asia. Here’s what’s making news on the markets:
Welcome to Asia Morning Briefing, a daily summary of the top news stories during U.S. business hours and insight into market movements and analysis. For a detailed look at US markets, check out CoinDesk’s Crypto Daybook Americas.
Bettors in the prediction market are increasingly convinced that the US government shutdown will make history. The contracts on Polymarket and Kalshi provide for government recovery after 40 days, surpassing the record of 35 days set in 2019.
Polymarket traders assign the highest probability to a resolution around November 15, while Kalshi Duration Market predicts an average duration of 41.6 days, which would take it to November 11.
Even though much of Washington is at a standstill, with nearly a million federal employees either furloughed or working without pay, the Federal Reserve remains isolated. The central bank operates independently of Congressional appropriations, meaning it can still hold policy meetings and adjust rates in the event of a shutdown.
Polymarket bettors assign a 96% probability of a 25 basis point cut at the next FOMC meeting on October 29, followed by an 85% probability of another quarter-point cut in December.
The challenge is informational: With the delay in reports on employment, inflation and GDP, the Fed could be forced to make consecutive cuts based on incomplete data.
It may be entirely a coincidence, but the last extended shutdown in 2018-2019 aligned with the bottom of the Bitcoin bear market, when BTC fell to just above $3,000 before rebounding strongly after the government reopened.
This time, the shutdown coincided with a record rise in gold, now above $4,200 an ounce, and a massive $20 billion in crypto leverage that reset derivatives markets.
Market movement
BTC: Bitcoin is trading above $108,000, falling 1.8% as traders reversed their weekend gains and risk sentiment weakened, with renewed macroeconomic uncertainty and cooling ETF flows weighing on digital assets.
ETFs: Ethereum is retesting $4,100 resistance as treasury firms SharpLink and BitMine accelerate their accumulation, purchasing a total of $278 million worth of ETH over the past week to expand their holdings amid market consolidation.
Gold: Gold fell 5.5% to $4,121.50 and silver fell 7.5% to $48.37, in its biggest one-day decline in years, as traders took profits after a parabolic rally, although analysts said both metals remain in strong long-term uptrends.
Nikkei 225: Japan’s Nikkei 225 index rose a day after data showed exports rose 4.2% year on year in September, ending a four-month decline, as stronger shipments to Asia offset weaker demand from the United States, while imports climbed 3.3%, beating expectations.
Elsewhere in crypto
- Prediction Markets Explode as Volumes Surpass 2024 Elections (Bloomberg)
- Tether Reaches 500 Million Users as Stablecoin Supply Approaches $182 Billion (The Block)
- Galaxy Stock Jumps on 140% Surge in Q3 Trading Volume (Decrypt)
