Weekly Market Update - Friday, September 29, 2023 - MicroStrategy Buys ~$150 Million Worth of Bitcoin, Bipartisan Group Urges SEC to Approve Bitcoin ETF, and Pudgy Penguins Waddle Into Walmart

Takeaways

• Bipartisan group in Congress urges spot Bitcoin ETF approval as SEC punts: Bitcoin saw a mid-week bump as a bipartisan group of Congressmembers urged SEC chair Gensler to immediately approve a Bitcoin ETF. The SEC delayed a number of spot ETF application decisions as a US government shutdown looms.
• MicroStrategy adds to its bitcoin coffers with purchases totalling ~$150 million: MicroStrategy, one of the largest bitcoin holders, bought 5,445 bitcoins for ~$147.3 million USD, at an average price around $27,053 USD. The purchases were made between August 1 and September 24. The company said it was considering buying even more.
• Leading NFT brand Pudgy Penguins to sell toys at Walmart: The Pudgy Toys collection will be available in 2,000 Walmart stores across America. Each toy comes with a QR code, which once scanned gives the user access to the online virtual Pudgy World.
• Curve founder closes out debt positions on Aave, pushing CRV higher: Curve (CRV) rallied this week, trading up 17%, after Curve founder Michael Egorov paid off his entire debt position on the DeFi lending protocol Aave.

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Congressional Group Urges Spot Bitcoin ETF Approval as SEC Delays Decisions on Applications

Bitcoin (BTC) started the week consolidating just above the $26k USD mark before seeing a brief jump on Wednesday. The bump came after a bipartisan Congressional group penned a letter to SEC chair Gary Gensler requesting the immediate approval of a spot Bitcoin ETF. In the letter, the Congressmembers claimed that the SEC is discriminating against a spot Bitcoin ETF, adding that there is no reason to continue denying applications following the recent Grayscale court victory.

BTC moved back to the low $26k USD range, however, shortly after the letter was released, as the SEC announced it would delay its decision on the ARK 21Shares spot Bitcoin ETF until January 2024. A decision wasn’t due until November 11.

It was reported on Thursday that the SEC also delayed decisions on spot Bitcoin ETF applications from Blackrock, Bitwise, Invesco, and Valkyrie, as a US government shutdown looms. Nevertheless, BTC saw positive price movement beginning on Thursday, with prices surpassing $27k USD before settling in the high $26k range.

MicroStrategy Buys Another $147.3 million USD Worth of Bitcoin

It was revealed Monday that MicroStrategy (MSTR), one of the largest holders of bitcoin (BTC), bought 5,445 bitcoins for ~$147.3 million USD, for an average price around $27,053 USD. The purchases were made between August 1 and September 24, according to a regulatory filing. MicroStrategy now holds 158,245 BTC, worth ~$4.25 billion USD as of Friday.

MicroStrategy also said it was considering selling MSTR shares to raise up to $750 million USD, with plans to purchase more BTC with some of the proceeds.

Pudgy Penguins Toys Available at Walmart, Pushing Back Against Growing NFT Skepticism

On Tuesday, Luca Netz, the CEO of leading NFT brand Pudgy Penguins, revealed that its Pudgy Toys collection will be available in 2,000 Walmart stores across the US. Each toy comes with a QR code, which once scanned gives the user access to the online virtual Pudgy World.

The move comes a week after Rolling Stone published an article titled “Your NFTs Are Actually — Finally — Totally Worthless,” Despite the decline in prices across the NFT market, Pudgy Penguins has attempted to bridge the gap between the physical and digital world pushing the Web3 narrative forward.

Curve Rallies as Founder Pays Off Entire Aave Debt Position

Curve (CRV) rallied this week, after Curve founder Michael Egorov paid off his entire debt position on the DeFi lending protocol Aave. CRV is trading up 13% over the past seven days as of Friday morning.

CRV took a massive hit in August following a multi-million dollar hack at the end of July, which led to CRV losing ~25% in a single day. The exploit also brought to light Egorov’s large outstanding debt positions that were collateralized by 427 million CRV tokens, which represented 47% of the project's entire circulating supply.

The outstanding debt position led to contagion fears, as a forced liquidation could have caused large losses on a number of DeFi protocols where the debts were held given the illiquidity of the CRV tokens backing the loans. At the time, Egorov managed to sell millions of his Curve tokens to liquidity providers which helped ease fears.

US Stocks Struggle With Government Shutdown Imminent

The S&P 500 and Nasdaq both hit their lowest levels since the start of June this week, while September looks set to be the worst month of the year. Both indices are down over 3% over the past month. Rising oil prices continue to bolster expectations that interest rates may stay higher for longer, adding pressure on global equity prices.

The impending government shutdown, which seems increasingly likely to begin on Sunday, has added further negative sentiment to the market and dragged prices lower throughout the month.

-From the Gemini Trading Desk