October 2021 Recap

Bitcoin rallied in October and reached new all-time highs, almost hitting $67,000. We saw the crypto market cap reach a record $2.7 trillion. This month was also filled with many exciting events, including two Bitcoin futures ETFs, one from ProShares and the other from Valkyrie, being launched in the United States. Both ETFs saw significant volume on the days they were launched. Grayscale filed with the SEC to convert their trust, GBTC, into a Bitcoin spot ETF. Two more derivatives-related acquisitions also occurred this month: Cboe acquired the digital asset spot market and futures exchange ErisX and FTX US finalized its LedgerX Acquisition.

Institutions are continuing to show growing interest in crypto. Bank of America launched research for digital assets and asset manager PIMCO was reported to be extending its crypto involvement. U.S. Bank also partnered with NYDIG to offer Bitcoin custody services. Mastercard and Bakkt announced a partnership which will allow Mastercard to integrate crypto payments. The CEO of George Soros’ family office also confirmed that the office owns Bitcoin. Furthermore, Bitcoin is continuing to be purchased by large entities such as El Salvador, which announced that it purchased 420 Bitcoin, worth nearly $25 million.

There were a few regulatory events that are also worth highlighting. The CFTC fined Tether and Bitfinex $42.5 million for “untrue or misleading claims.” It was also revealed that Terra founder Do Kwon was served by the SEC. FATF updated its 2019 Guidance for a Risk-Based Approach to Virtual Assets and Virtual Asset Service Providers (VASP)s. The U.S. OFAC issued Virtual Currency Guidance and the U.S. DoJ established a National Cryptocurrency Enforcement Team.

On the DeFi front, the protocol Cream Finance experienced an exploit for more than $130 million of tokens this month. Moreover, DeFi protocol Compound had a bug in its rewards distribution, allowing users to claim tens of millions of dollars’ worth of COMP token rewards.

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CrossTower Inc. provides this content for general information purposes, to better inform you on your digital asset investment journey. We do not provide investment recommendations or provide tax advice. Please consult your investment professional or tax advisor if you require assistance in these areas.