Fed Chairman Powell delivered an important speech at the Jackson Hole Global Central Bank Annual Meeting last Friday (August 23), clearly releasing the strongest signal of interest rate cuts this year. The market is almost certain that the Fed will cut interest rates in September, and the focus should also be on the magnitude of the rate cut. The general expectation for a rate cut is 0.25%, but if economic data is relatively weak, there is also the possibility of a 0.5% rate cut.
For global markets, interest rate hikes or cuts are one of the most influential macroeconomic factors, and such policy changes will also have a strong impact on the cryptocurrency market, especially Bitcoin.

The big positive lines of BTC and ETH brought sunshine to the market and also brought hope to the cryptocurrency circle.
Last night, some news from the SEC greatly increased the market's probability of passing the ETF, triggering a surge in ETH.
If the ETH ETF is successfully approved, the projects in the ETH ecosystem will also benefit, and the increase may exceed that of ETH. Therefore, we should focus on it.
In the ETH ecosystem, there are several major sectors and projects:
1 layer 2 
Main projects: arb, op, strk, metis, manta
As ETH aims to become a global computer, Layer 2 is responsible for the prosperity of the ETH ecosystem with high TPS and low GAS. Its importance and value are self-evident. At the same time, Layer 2 is the sector with the highest market value in the ETH ecosystem.

While Web3 brings wealth opportunities, it also comes with certain risks and even some man-made traps. Recently, the "private financing round defrauded" incident spread on the X platform has attracted widespread attention.
Most of Web3's private equity financing rounds do not have relevant legal effect. They are basically trust-based financing behaviors, and investment traps and frauds occur frequently. Scammers often pretend to be community members with rich project resources, create their own identities through packaging, and gain the trust of victims to commit fraud.
Different from previous cases, the victims this time also include some senior practitioners in the encryption industry, including KOL. An investigation by Odaily Planet Daily found that the total amount involved has reached 4.22 million yuan (statistics from the rights protection group). Most of the victims are mainland investors, with more than 50 people in total.

1 Introduction
In the cryptocurrency space, Bitcoin and Ethereum have long been at the forefront of innovation and adoption. While Bitcoin has become digital gold and a store of value, Ethereum has gained recognition for its smart contract capabilities and decentralized applications. However, the two major crypto networks essentially exist in parallel with little interoperability between them. That’s changing now, as the integration of Bitcoin’s Lightning Network with the Ethereum system opens up a realm of possibilities, creating synergies that could revolutionize the cryptocurrency landscape.

Bitcoin weekly trend chart
The perimeter-level visual review is clearer in this way;
1. Starting from breaking through the bear market trend line at the beginning of the year, it stepped back in March to confirm that the momentum had officially begun. The market started with the official breakthrough of 25,000 and twice stepped back to confirm 25,000~31,800. The second round of momentum was close to 200 Yutian; the previous 31,800 was unbreakable. The potential does not break through until the trend reaches more than 200; then from another perspective, the current 31800 is of course also a support that has accumulated 200 in the sky;
2 The current market is in the middle between 31800 and the last wave of 41800; currently it is more inclined to be regarded as continuing to accumulate strength and ready to go;

Let’s look at BTC first

Everyone looks at the sky chart. Today’s candle chart is going down again. BTC has a “top single pin bottom” and “evening star” at the top. Both of these are short signals. Please feel free to hold short positions boldly. We have been in the previous few days. As mentioned in Tian’s article, at the position of 37,000, short orders can be opened with confidence. Today, this position can also be opened.
The decline in BTC will not be small. Although there will not be a waterfall drop, there will still be a 5-10% drop. Now it is suitable for 3-4% positions. The take-profit is placed near 34,000. Hold short orders carefully. Recently Both have risen by 40%, so they are bound to fall back. There is no market that only rises but never falls.

As Bitcoin reaches $30,000, it has essentially entered a new stage. In a sense, the direct driving factor of this round of market is a piece of fake news about the adoption of Bitcoin ETF. However, driven by the continuous emergence of good news, Bitcoin continues to break new highs while hesitating. However, from the on-chain data, retail investors continue to pour in, but big funds are showing signs of leaving the market. How should we view the deep logic behind the current rise of Bitcoin? How will Bitcoin develop in the future? Bitcoin enters a new stage We have pointed out in a previous article: "The reason why Bitcoin's $30,000 is important is because there is a high probability that this is the dividing point between bulls and bears; if it effectively breaks through the previous high, it will enter the initial bull stage, if it cannot effectively break through, it will still be in the bear stage. The end.” Judging from the current trend of Bitcoin, it has undoubtedly entered the initial bull stage. Below we introduce this new stage from different dimensions. From the perspective of the Bitcoin halving cycle, Bitcoin has indeed entered a new stage. According to PlanB's S2F model, currently, Bitcoin has entered the "6 months before halving - 18 months after halving" period. At this stage, the benefits of buying and holding are very good. PlanB even said, "In my opinion, Bitcoin's bull market (green) is inevitable. The only question is: when will FOMO start, how high will this bull market go, and how long will it last?" In addition to Bitcoin With the halving approaching, there is an important turning point in the road to regulatory compliance of crypto assets. The launch of Bitcoin ETF seems to be imminent. Faced with the potential huge market dividends, investment sentiment in the crypto market is high. In the Ripple case, on October 3, Judge Torres dismissed the SEC’s appeal request; on October 19, the SEC withdrew all charges against Ripple CEO Brad Garlinghouse and co-founder Chris Larsen, canceling the trial scheduled for next year. In August 2023, court documents showed that a three-judge appeals panel in Washington overturned the SEC’s decision to block the Grayscale ETF. On October 19, Grayscale posted on the X platform that it had submitted Form S-3 as part of its efforts to convert GBTC into ETFs. "On November 9, according to people familiar with the matter, the U.S. Securities and Exchange Commission (SEC) has opened a dialogue with Grayscale Investments (Grayscale) regarding the details of its application to convert the trust product GBTC into an ETF.Bloomberg ETF analyst James Seyffart posted on the period. The window period will end on November 17. But in theory, the SEC can make a decision on the top 9 companies on the list at any time from now to January 10, 2024. "From a macro cycle perspective, The Federal Reserve's economic policy has also begun to show signs of turning, and interest rate hikes may come to an end. On November 1, local time in the United States, the Federal Reserve announced its latest interest rate decision, announcing that it would maintain the benchmark interest rate unchanged (between 5.25% and 5.5%). This is also the second time in a row that the Fed has suspended interest rate hikes following its September meeting. In a statement issued on the same day, the Federal Reserve said that recent indicators indicate that U.S. economic activity expanded at a strong pace in the third quarter, employment growth has slowed since earlier this year, but remains strong, and inflation remains high. In determining the extent of further tightening, the Fed will consider the cumulative degree of tightening of monetary policy, the extent to which monetary policy lags in its impact on economic activity and inflation, and economic and financial developments. The Fed will continue to reduce its holdings of U.S. Treasury securities, agency debt and agency mortgage-backed securities, and is firmly committed to returning inflation to its 2% goal. Huatai Securities pointed out that Powell did not rule out the possibility of subsequent interest rate hikes, saying that he had not yet decided whether to raise interest rates in December, but his remarks on the tightening of financial conditions and the decline in the effectiveness of the dot plot over time suggested that the Fed may have ended its interest rate hike cycle. The overall stance sends a dovish signal. It is more likely that the Federal Reserve will not raise interest rates at its December meeting. However, if the recent inflation significantly exceeds expectations, especially if core inflation and inflation expectations pick up significantly, the possibility of the Fed raising interest rates may increase. CICC pointed out that if the overall financial conditions and economic conditions reflected in the current U.S. bond interest rates maintain the current balance, then the Federal Reserve may continue to suspend interest rate increases in December. However, if one party breaks this balance, such as a sharp decline in U.S. bonds or the economy If the data exceeds expectations, an interest rate hike may still be on the table. Bitcoin still needs a test for support. There are indeed many positive factors in the current round of Bitcoin's rise, but overall, the degree of financial speculation is still very high. Bitcoin may still need a test for support when it falls.The direct stimulus impact of this round of Bitcoin’s rise was mainly caused by a piece of fake news about the passage of the Bitcoin ETF. Subsequently, with the continuous positive release of the Bitcoin ETF, market sentiment continued to mobilize, and funds began to pour in. This part of the funds was mainly in the form of Retail investors dominate, which reflects the FoMo mood of the market. Judging from the on-chain data, small-scale investors (holding less than 10 BTC) are not only in a state of increasing their holdings, but also in the strongest trend of increasing their holdings, especially the increase in the amount of investors holding less than 1 BTC. It is the largest; except for the super giant whales whose holdings are greater than 100,000 BTC, giant whales are generally in a state of reducing their holdings, and the reduction is still very strong. According to BiTui, Glassnode data showed that on November 2, Bitcoin experienced its fourth major inflow, with a capital scale of US$300 million. As soon as the funds flowed in, Bitcoin began to fall. In a sense, big funds do show some signs of cashing out, but judging from the proportion of long-term holders, it is still at a high level. Bitcoin’s current rise has been greatly boosted by options, which also means that its bubble is still very big. Alex Thorn, director of research at crypto financial services company Galaxy Digital, posted on the spot to remain delta neutral. This should amplify the explosiveness of any near-term short-term upside. After the price reaches $32,500, market makers will need to buy $20 million of delta for every subsequent 1% increase." Note: Gamma: The sensitivity measure of option Delta. The larger the Gamma, the greater the Delta fluctuation rate; Delta: the measure of the sensitivity of the option price relative to the underlying price. For example, if a certain BTC option Delta= 0.6, then BTC will increase by 1 U and the option price will increase by 0.6; Delta Neutral: If a portfolio consists of related financial products and its value is not affected by small price changes in the underlying assets, such a portfolio is delta neutral. The current rise of Bitcoin is mainly affected by the adoption of spot ETFs. However, as a risk asset, Bitcoin is still difficult to get out of the bull market directly in the context that the global economy as a whole still faces many challenges. The most important thing is that the Federal Reserve is still essentially During an interest rate hike cycle.The Federal Reserve has always emphasized that it will control the U.S. inflation rate at 2%. It is still far from this goal. Although the market has seen some positive signals, premature optimism may not be appropriate. According to "Betui", Fed Governor Bowman said that it is expected that we will still need to further increase the federal funds rate. In addition, you may also be able to learn from gold ETFs. In March 2003, Australia opened the world's first gold ETF. In October 2004, the SEC approved the first gold ETF GLD in the United States. In November 2004, the U.S. gold ETF GLD officially came into effect and began trading. At that time, the monetary policy implemented by the Federal Reserve was relatively loose. Gold saw a sharp rise after the approval of the first gold ETF, which continued until the US ETF began trading. The US gold ETF GLD continued to sprint slightly after the SEC approval. After the US gold ETF began trading , down about 9% in two months, below the price at which the ETF passed. However, as gold ETFs do not require the custody of metals and custody, more traders can easily invest through ETFs. In the following years, more funds have entered this market. The financial crisis in 2008 pushed gold to US$1,000. . History does not simply repeat itself, but it is often surprisingly similar. Will Bitcoin have the same story? Crypto Market Outlook for 2024 Although we believe that Bitcoin may still test support in the short term, such a test will become insignificant in the face of the huge opportunities in 2024. Judging from various signs, the passage of the Bitcoin ETF and the Bitcoin halving will undoubtedly become the main driving force for the next bull market of Bitcoin. The US wealth management industry may be the most accessible and direct market, a new wealth creation effect. The curtain is about to begin. Galaxy estimates that the potential market size of the U.S. spot Bitcoin ETF in the first year after its launch is approximately $14 trillion. It believes that for accessibility reasons, the U.S. wealth management industry is likely to be the most accessible and direct market and would receive the most net new accessibility from approved Bitcoin ETFs. As of October 2023, broker-dealers ($27 trillion), banks ($11 trillion) and RIAs ($9 trillion) had a combined $48.3 trillion in assets under management.The admission cycle for Bitcoin ETFs across these segments is likely to continue for several years as channels open up for admission. We assume that the RIA channel will grow starting at 50% in Year 1 and increase to 100% in Year 3. For the broker-dealer and bank channels, we assume slower growth, starting at 25% in Year 1 and growing steadily to 75% in Year 3. Based on these assumptions, we estimate the potential market size for a U.S. spot Bitcoin ETF to be approximately $14 trillion in year 1, approximately $26 trillion in year 2, and approximately $39 trillion in year 3. Some major crypto V chain research institutes believe that, referring to the time when the last round of Grayscale Trust was passed, I think the most likely scenario at present is: applying for Bitcoin spot ETF in January 2024 (the Federal Reserve will no longer raise interest rates or the market has no expectations of raising interest rates) ); Bitcoin spot ETF will come into effect in April 2024 (helping to attract funds before Bitcoin halving); Bitcoin bull market will officially start in July 2024 (expected adjustments after halving and monetary easing will be realized in the market) ; In September 2024, the Federal Reserve began to enter an interest rate cutting cycle and implement monetary easing policies. (The market will realize the interest rate cut expectations immediately once the risk is released. 1 to 2 months in advance, we can refer to the prerequisite indicator that GDP is greater than CPI). Summary In the short term, research by Bloomberg analysts shows that the Bitcoin ETF has a high probability of passing in January next year. Combined with the current SEC actions, this is becoming the consensus of most people in the market. The crypto market has strong bullish sentiment, and Bitcoin The price continues to be supported; at the same time, as Bitcoin continues to rise, it is affected by the options market, which further amplifies the rise of Bitcoin. This article believes that in the context of still uncertain macroeconomics, this kind of bubble will eventually cause Bitcoin to form A bottom test. From a long-term perspective, the Fed's interest rate hike cycle is about to end or has ended, and with the coming of the Bitcoin halving (in April), we are expected to see the arrival of a big bull market in 2024. With clear regulations in the United States and the influx of capital from Wall Street and other large institutions, a new bull market does seem to be not far ahead.

According to Bloomberg, Hong Kong is stepping up its efforts to become an Asia-Pacific digital asset hub and is evaluating whether to allow direct investment in cryptocurrency exchange-traded funds (ETFs).
Julia Leung, chief executive of Hong Kong's Securities and Futures Commission, said retail investors would be considered for investment in these spot ETFs as long as regulatory concerns are met.
"We welcome proposals to use innovative technologies that improve efficiency and customer experience," said Julia Leung. "As long as new risks are addressed, we are willing to try them. Our approach is consistent regardless of the asset."

Binance has launched a new Web3 wallet, which will be available to all users through the Binance mobile app. Binance Web3 Wallet is a self-hosted cryptocurrency wallet built into the Binance App. The wallet uses multi-party computation (MPC) technology, which no longer requires users to memorize seed phrases. With MPC, the private key is divided into three smaller parts, called key shares. Two of the three key shares will always be controlled by users for self-custody, while one key share will be managed by Binance. Binance aims to allow users to use the wallet to “swap thousands of tokens” on more than 30 blockchains, explore decentralized applications, and transfer funds between exchanges and wallets.