Yesterday, the U.S. stock market, along with BTC and crypto, recovered following the release of the CPI report. Many stocks, including MicroStrategy, reached new highs.
Market Situation
On Friday (October 11), the U.S. stock market saw a slight recovery following the release of the CPI report. All three indices rose, with the Dow Jones increasing the most by 0.97%. Oil contracts remained around $75 per barrel, while gold slightly increased to $2,674 per ounce.
Bitcoin also rose to around $62,000. Most altcoins followed BTC’s upward trend, and the total crypto market capitalization reached $2.291 trillion.
Several U.S. banks reported strong third-quarter earnings. For example, JPMorgan Chase posted higher-than-expected income and profits, causing its stock to rise nearly 5% during yesterday’s trading session. Other banks, such as Wells Fargo, also reported similar results.
In this market, the narrative is more important than the facts. Yesterday, many institutions continued to discuss the story that inflation has been controlled, reinforcing the possibility that the Fed may continue to lower interest rates at the next meeting. Goldman Sachs commented that the Fed has won the fight against inflation, and the market has nothing to worry about. CNBC also published an article stating that most goods are experiencing deflation, not inflation. It’s clear that concerns over a recession have been replaced by a different narrative.
Following the CPI report, the U.S. wholesale inflation rate (PPI) was reported at 1.8%, unchanged in September. Economists surveyed by Dow Jones predicted a monthly increase of 0.1% after rising 0.2% in August, but the result showed no increase. Core PPI remained at 2.8%, as expected. Overall, the PPI results were favorable for the market.
Many countries, including the Fed, have started a cycle of interest rate cuts. Recently, South Korea also lowered its interest rate by 0.25% from 3.5% to 3.25%. Although interest rates take time to impact the market, they still have a positive effect on the financial market as they reflect investor expectations for future prices.
MicroStrategy Aims to Become the “Bitcoin Bank”
With its BTC accumulation strategy, MicroStrategy has seen remarkable changes so far. The company’s success serves as a model for other businesses.
MicroStrategy’s stock reached a new all-time high last Friday, surpassing the previous peak from the 1999 dot-com bubble era.
The company’s stock had been forgotten for 20 years, seemingly destined to remain a relic of the dot-com bubble of 2000, but Bitcoin has changed everything.
Michael Saylor, MicroStrategy’s founder, shared with analysts that the company’s ultimate goal is to become a leading “Bitcoin Bank,” potentially reaching a market value of trillions of dollars. Instead of lending like traditional banks, MicroStrategy plans to borrow at low interest rates and then invest in Bitcoin, aiming for an average annual return of around 29%.
MicroStrategy’s goal is to become a Bitcoin bank, offering Bitcoin-based financial products such as stocks, bonds, and other financial instruments. Saylor expects Bitcoin to reach millions of dollars per coin in the future, and his company could achieve a market value of $300-400 billion, or even become a trillion-dollar company.
MicroStrategy does not plan to lend Bitcoin; instead, it will borrow from the market and invest in Bitcoin. Saylor believes that investing in Bitcoin is less risky than traditional lending.
Bitcoin: A Call Option with No Expiration
Gary Cardone compared Bitcoin to a call option with no expiration date, acting as a hedge against the collapse of the global economy and currency devaluation.
Firstly, he believes BTC will have many use cases in the future that we can’t yet foresee. The most basic use case is fast money transfers, particularly large amounts of BTC across borders in a short period. Since this is currently the safest network, making large transactions quickly, with low fees and security, is a major advantage. In the traditional banking system, transferring large sums across borders is very complex, difficult, expensive, and time-consuming.
Moreover, fiat currencies will always depreciate, so BTC will act as insurance for asset value. The U.S. dollar, in essence, is managed by the Fed, an independent private company not under the control of the White House.
Other News
- Metaplanet (Japan) purchased an additional 108.99 BTC. They have been rushing to accumulate BTC recently and now hold a total of 748.5 BTC. Since they began acquiring BTC, the company’s stock has become more active and has grown significantly.
- Arkham Intelligence, a blockchain data company, announced plans to launch a crypto derivatives exchange next month, aiming to compete with other derivatives exchanges.
- Tesla unveiled the latest version of its humanoid robot, Optimus, at the “We, Robot” event in California on Thursday. The robot showcased its ability to serve drinks and sing “Happy Birthday” to attendees. Tesla also introduced its self-driving car at the event. While the event initially boosted Tesla’s stock, it later fell as the company did not provide a clear sales roadmap or address market demand.
- Ripple said that if the SEC appeals, it will file a counter-appeal. This legal battle will continue, and Ripple is determined to fight the SEC.
- Ripple co-founder Chris Larsen donated $1 million in XRP to Kamala Harris, marking the first time a crypto donation has been made for Vice President Kamala Harris’s presidential campaign.
- Bitnomial Exchange has filed a lawsuit against the SEC, accusing the agency of overstepping its authority by declaring XRP a security, despite it being previously regulated as a commodity by the CFTC. Bitnomial filed the lawsuit after the SEC required them to register as a securities exchange to list XRP futures contracts, something Bitnomial cannot comply with since Ripple Labs hasn’t registered XRP as a security. Bitnomial is seeking a court ruling that XRP futures are not securities and an injunction preventing the SEC from asserting jurisdiction.
- TD Bank will pay approximately $3 billion to settle allegations from U.S. authorities regarding lax anti-money laundering operations, which led to significant money laundering over the years. The U.S. Department of Justice stated that TD Bank facilitated at least three money laundering networks to move $670 million through the bank’s accounts. The bank admitted responsibility, cooperated with the investigation, and committed to improving its anti-money laundering system. TD Bank’s CEO assured that the bank will fix these issues and prevent them from happening again.
- Ethiopia is rapidly expanding its electricity allocation for Bitcoin mining, with capacity now increased to 600 megawatts, making it one of the fastest-growing markets for Bitcoin mining globally. Ethiopia plans to expand capacity by several hundred megawatts by the end of the year, leveraging excess hydroelectric power and attracting mining companies, primarily from China.