The boredom ended in October as cryptocurrency prices zoomed higher, with the biggest of them all, bitcoin (BTC), posting the strongest monthly rally since January as investors were abuzz with optimism that bitcoin ETFs will soon get approved in the U.S.
BTC gained more than 27%, springing to a 17-month high of $35,000 after hovering around the $27,000 level during the first half of October. It has recently resided just above $34,000 ahead of the Federal Reserve’s interest rate decision on Wednesday, with market participants largely expecting policymakers to leave rates unchanged.
The rally spread across the broader crypto market, a bullish sign, The CoinDesk Market Index (CMI), which tracks a broad basket of tokens, advanced 22% in October. The market capitalization of all cryptocurrencies jumped nearly 19% to $1.255 trillion, according to TradingView data, the biggest increase in crypto wealth since the 33% jump in January.
ETFs would be a big deal for bitcoin because they’re far easier for the average investor to buy than the cryptocurrency itself or existing bitcoin investment products, like the Grayscale Bitcoin Trust (GBTC) with $21 billion assets under management. The U.S. Securities and Exchange Commission rejected GBTC’s conversion into one, but courts have eviscerated that decision, boosting the odds the SEC will have to approve that shift – and likely also bless ETF applications from the likes of BlackRock, the world’s largest asset manager.
Despite the fact that it was a broad crypto rally in October, not all sectors benefited equally.
The CoinDesk DeFi Index (DCF), which encompasses tokens related to the decentralized finance sector such as decentralized exchanges, lending and staking protocols, gained only 7% in October. Key DeFi tokens such as curve (CRV), maker (MKR), uniswap (UNI) and compound (COMP) declined 3% to 7%.
Ethereum’s ether (ETH) posted a modest gain of 7%. Its valuation sank to a level versus BTC that was also seen in June 2022, which preceded ETH outperformance.
Meanwhile, the CoinDesk Computing Sector (CPU), an index that tracks protocols focused on building and supporting Web3 infrastructure and distributed computing, jumped almost 32% in October.
Among alternative cryptocurrencies, solana (SOL) was a notable outperformer with over 70% monthly return amid increasing network activity and subsiding concerns about FTX dumping tokens in a fire-sale.
