Welcome back to DV Chain's Weekly Market Commentary! In this edition, we cover the Fed’s 50 bps rate cut, marking the start of a new rate-cutting cycle after 1.5 years of unchanged rates. Risk assets, including crypto, surged in response, with ETH leading the way, up 15%, and BTC up 6%. We also highlight major developments such as BlackRock’s Bitcoin ETF options approval, Trump’s continued support for crypto, and key upcoming catalysts like the Eigen airdrop and FTX creditor distributions. Dive in for insights on the latest market trends and potential trade ideas:
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Market Recap

• The Fed cut 50 bps, the beginning of a rate cutting cycle after 1.5 years of unchanged rates
  • Crypto and Risk assets trended higher following the interest rate decision
  • Fed signals that their objective has shifted from controlling inflation to boosting jobs
  • ETH up 15% since the decision, while BTC is up about 6% from then
  • Next FOMC is 11/7, right after the election, and it’s another 50/50 toss up between a 25 and 50 bp cut

• Microstrategy buys 7240 BTC from September 13th to 19th for $458M
  
  
• The SEC has approved BlackRock's spot Bitcoin ETF's options
  
  
• Trump Buys Burger with Bitcoin at a New York Bar, showing his continued support for the industry
  
  
• Kamala Harris publicly supports innovative technologies, including digital assets, marking her first positive reference to crypto
  • The election is largely seen as a binary event for crypto assets, with Trump being positive and Harris being negative for prices
  • If there’s continued support from Harris’ campaign towards crypto in the coming weeks, election downside fears can be eased
    
    
• World Liberty Financial (WLFI), announced the upcoming launch of its governance token, WLFI
  • 63% of WLFI tokens will be sold to the public, 17% will be allocated for user rewards, and 20% will be reserved for the team
  • World Liberty Financial plans to offer cryptocurrency lending services on Ethereum
  • WLFI token sale will be regulated by the SEC, and all purchasers will need to KYC
    
    
• SUI TVL passes 900M
  • $SUI has been a notable outperformer recently, along with $FTM and $AAVE, all up approximately 70-80% over the last month
    
    
• CZ is expected to be released from prison this Sunday 9/29
  
  
• Eigen becomes tradable 9/30, one of the largest and most anticipated airdrops this cycle - historically airdrops have provided wealth effects that drive on chain activity
  
  
• 9/23 Gary Gensler testifies before U.S. House of Representatives' financial-services committee
  
  
• GDP Thursday 9/26
  
  
• PCE Friday 9/27
  
  
  

Upcoming Catalysts / Trade Ideas

• Tia Unlocks, 10/30
  • $1B worth of tokens to be unlocked
    
    
• Eigenlayer, 9/30
  • wealth effect for ETH ecosystem
    
    
• FTX creditor distributions in Q4
  
  
• Uniswap v4 launch, Q3
  
  
• ETHBTC
  • Notably strong after FOMC, despite Saylor’s purchases in BTC
    • As we head towards ZIRP, the chase for yield benefits ETH as DeFi yields become much more attractive
  • Potentially breaking out of a 2 year slump
  • ETH has much more narrative potential than BTC, ie ‘Tokenization of everything’ is quietly happening, and especially since some institutions are said to be exempt from SAB121
  • A Trump victory likely re-rates alts as an investable sector, as tokens will likely be able to accrue value, which seems near impossible under the current SEC

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