Markus Thielen, Head of Research at 10x Research, disclosed that the September rate cuts by the Federal Reserve and China’s stimulus have caused a new FOMO wave in the crypto industry.
He noted that Bitcoin had surged 5%, Ethereum had risen 11%, and altcoins like SHIB, ENA, and SEI gained 36%, 51%, and 54%, respectively, since the rate cuts.
Thielen’s analysis revealed an altcoin explosion and an acceleration in stablecoin minting. Chinese OTC crypto brokers reported over $120 billion (~$20B per quarter) in inflows for the last six quarters. According to the report, $10B in stablecoins were issued within the last few weeks, flooding the crypto market with liquidity that significantly surpassed Bitcoin ETF flows. He added that Bitcoin’s break above $65K was probably the first step towards the $70K mark and maybe a series of all-time highs in the near future.
Analyst sees another Bitcoin and altcoin boom
Thielen’s report attributed the decline in Bitcoin’s dominance and the spike in Ethereum gas fees to a surge in altcoin activity. He claimed that the ‘DeFi renaissance’ was ignited by the 10-year bond yield drop below the 4.0% threshold. The report revealed that USDC minting indicated a rise in DeFi activity as YTD stablecoin inflows reached $35 billion, pushing the total stablecoin value to over $160 billion.
The report declared that Circle disproportionately accounted for 40% of the latest stablecoin inflows. It also noted that South Korea’s retail crypto activity supported this trend as daily trading volumes averaged $2 billion, proving that altcoins’ trade dominance surpassed Bitcoin.
“In just the first half of this year, inflows have already exceeded $40 billion, with 55% of the total value coming from transactions over $1 million, likely driven by high-net-worth individuals or corporate entities.”
– Markus Thielen
Thielen observed that the Fed rate cuts and China’s stimulus measures could trigger significant outflows of capital from China into the crypto market since over 55% of Bitcoin was mined by Chinese pools.
The Chinese stimulus plan impacts crypto
According to the analyst, the $278 billion Chinese stimulus plan fueled global liquidity and ignited a parabolic rally in crypto prices. The surge in liquidity coincided with a drop in Bitcoin’s 30-day realized volatility to 41%. Thielen noted that institutional traders were likely to take on bigger positions with lower volatility.
Santiment shared information showing a 43% surge in Shiba Inu’s price, a potential indication of FOMO. The analytics firm considered three on-chain metrics: volume, circulation, and whale transaction count. According to Santiment, Shiba Inu’s social dominance increased; the volume, circulation, and whale transactions spiked to 10-week highs.
Thielen claimed that a Q4 rally was likely, as a major bull run in the crypto space was on the horizon, and it could spark more FOMO across the industry.
