Decentral Block Post

Bitcoin (BTC) saw instant volatility on Nov. 2 as the United States Federal Reserve enacted a fourth consecutive 0.75% interest rate hike.

Fed hints more hikes to com

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD initially dropping to $20,200 before momentarily rebounding to $20,800.

The Fed confirmed the 0.75% hike, which marks its most intensive hiking schedule in forty years, in a statement.

“The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. In support of these goals, the Committee decided to raise the target range for the federal funds rate to 3-3/4 to 4 percent,” it stated.

“The Committee anticipates that ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time.”

The past few months have been painful for Bitcoin (BTC) bulls, but they are not alone. The United States Federal Reserve’s tightening economic policy has led investors to seek protection in cash positions and inflation-protected bonds. 

Surging inflation and recession signals have caused the S&P 500 stock market index to retreat 19% year-to-date. Even gold — previously considered a safe asset — is suffering the consequences, trading down 20% from its all-time high.

The increasing costs of a home mortgage added fear that a housing crisis might be underway. Since the Fed started raising interest rates in March, borrowing costs have gone up and up, and mortgage rates have reached multi-decade highs.

Regardless of the prevailing bearish sentiment, Bitcoin bulls could still profit by $270 million on Friday's options expiry.

$640 million in options expire on Nov. 4

According to the Nov. 4 options expiry open interest, Bitcoin bears concentrated their bets between $16,000 and $20,000. These levels might seem gloomy right now, but Bitcoin was trading below $19,500 two weeks ago.

Bitcoin (BTC) and the rest of the crypto market have been in a bear market for almost a year. The top cryptocurrency has seen its market valuation plummet by more than $900 billion in the said period, with macro fundamentals suggesting more pain ahead.

Another bear cycle produces more BTC hodlers

But the duration of Bitcoin’s bear market has coincided with a substantial rise in the percentage of BTC’s total supply held by investors for at least six months to one year.

Notably, the percentage of coins held for at least a year has risen from nearly 54% on Oct. 28, 2021, to a record high of 66% on Oct. 28, 2022, data shows.

This evidence suggests that long-term investors are increasingly looking at Bitcoin as a store of value, asserts Charles Edwards, founder of digital asset fund Capriole Investments.

“Despite the worst year in stocks and bonds in centuries, Bitcoiners have never held on to more Bitcoin,” the analyst noted while highlighting how the floor and ceiling in Bitcoin held for the long term have been increasing after each cycle.

A simple but elegant Bitcoin (BTC) price metric has returned to lows from before the 2017 bull market.

As noted by its creator, Charles Edwards, CEO of asset manager Capriole, the Bitcoin Yardstick is now at its second lowest level in history.

Yardstick prints second-lowest reading ever

As on-chain metrics converge to put in a classic macro bottom for BTC/USD, a new candidate is suggesting that Bitcoin is even more oversold than the average hodler believes.

The Bitcoin Yardstick measures the ratio of Bitcoin market cap to hash rate — two fundamental metrics which, when compared to one another, offer key price insights.

As Edwards explains, the lower the value, the “cheaper” Bitcoin is — more hash rate is being applied to secure low-priced coins.

Stablecoin issuers Circle and Paxos have each received approvals for their respective licenses from the Monetary Authority of Singapore (MAS), the city-state's central bank.

Circle received in-principle approval for a Major Payments Institution License allowing it to issue cryptocurrencies and facilitate domestic and cross-border payments while Paxos received its license to offer digital payment token services.

Circle and Paxos both announced their approvals on Nov. 2, which came a week after the MAS issued two consultation papers on proposals for regulating digital payment token service providers and stablecoin issuers under Singapore’s Payment Services Act (PSA).

The PSA was passed by the Singapore Parliament in 2019, which purports to regulate payment systems and authorizes MAS to oversee the conduct of payment service providers.

Circle, the issuer behind USD Coin (UDSC), and Paxos with its Pax Dollar (USDP), both U.S. dollar-pegged stablecoins will now be able to offer their respective stablecoins and other digital payment token products within Singapore.