1. Headlines

1. The Federal Reserve Bank of Minneapolis proposed taxing or banning Bitcoin to address government deficits.

A recent research report released by the Federal Reserve Bank of Minneapolis in the United States expressed concerns about the impact of Bitcoin on government fiscal policy, suggesting that it may need to be taxed or banned by law to help the government manage the deficit.

The report points out that Bitcoin complicates efforts to maintain a permanent government deficit, especially in an economy that relies on nominal debt. Since the supply of Bitcoin is fixed, the government cannot repay its debts by increasing the currency, which weakens the role of monetary policy.

Analysts believe that this report reflects the US government's concerns about the increasing influence of Cryptocurrency. The decentralization and uncontrolled nature of BTC may have an impact on traditional fiscal and monetary policy.

Some cryptocurrency supporters argue that the limited supply of BTC can actually constrain government overspending and promote fiscal discipline. They also point out that taxation or bans may hinder innovation and damage America's competitiveness in this emerging field.

2. Stripe acquires stablecoin platform Bridge for $1.1 billion

Payment company Stripe announced an acquisition of cryptocurrency startup Bridge for $1.1 billion, marking the latest move by Stripe into the cryptocurrency field.

Bridge is a Stable Coin platform that allows users to convert dollars into Cryptocurrency and store it in a Wallet. The company's main product is a Cryptocurrency called USDC, which is pegged to the dollar.

This acquisition will enable Stripe to provide Cryptocurrency payment and Settlement services to customers. Stripe said it will make it easier for businesses to accept digital assets and provide them with more payment options.

Analysts believe that this move reflects TradFi's increasing investment in the Cryptocurrency field. As Cryptocurrency becomes more popular, providing related services to customers has become a competitive advantage.

However, some people are concerned about the regulatory prospects of Stable Coin. Stable Coin is seen as an unregulated private digital coin, which may bring financial stability risks. Regulatory authorities may take stricter regulatory measures on such assets.

3. Sushi Labs CEO: About to announce a strategic acquisition, introducing innovative DeFi primitives

Sushi Labs CEO Jared Grey announced on social media that Sushi is about to make a strategic acquisition, enabling it to introduce built-in innovative DeFi primitives into verticals such as AMM and Perptual Futures.

Decentralized Finance (Decentralization Finance) is an application of blockchain technology in the field of finance, aiming to eliminate intermediary institutions and improve the transparency and efficiency of Financial Service. AMM (Automated Market Maker) and Perptual Futures are two important components of the Decentralized Finance ecosystem.

Grey stated that this acquisition will enable SUSHI to surpass its competitors in key metrics such as price, gas fees, latency, and further enhance its competitiveness in the Decentralized Finance sector.

Analysts believe that this move reflects the continuous development and innovation of the Decentralized Finance ecosystem. As more and more funds pour into this field, major projects are seeking differentiated advantages to attract more users.

However, some people are also concerned about the regulatory prospects of Decentralized Finance. Some regulatory agencies believe that Decentralized Finance poses risks of manipulation, Money Laundering, and other illegal activities, and may adopt stricter regulatory measures in this area.

4. LayerZero is launched on ApeChainMainnet and becomes its interoperability provider

cross-chain bridges announce onboarding on the ApeChain Mainnet and become the interoperability provider for its protocol LayerZero.

ApeChain is a Block chain focused on We games and the metaverse, incubated by the famous APE ecosystem. The addition of LayerZero will enable ApeChain to seamlessly connect with other Block chain networks, facilitating the free flow of assets and information.

Interoperability is considered to be one of the key factors in the development of Blockchain. The interconnection between different Blockchain networks will help the development of the entire ecosystem.

Analysts believe that the collaboration between LayerZero and ApeChain reflects the urgent need for interoperability in the gaming and metaverse sectors. As more users and assets enter these areas, Cross-Chain Interaction interoperability will become increasingly important.

However, some people have raised concerns about the security of the interoperable bridge protocol. Some bridge protocols have been attacked by Hackers, resulting in a large amount of funds being stolen. Therefore, ensuring the security of the bridge protocol will be an important challenge.

5. Vitalik: Hope that there will be more ways for DAOs in the future to achieve high degree of decentralization and permissionless formal membership.

Ethereum founder Vitalik Buterin expressed on social media that he hopes in the future DAO (Decentralized Autonomous Organization) will have more ways to achieve a high level of Decentralization and formal membership without permission.

DAO is a form of organization based on Block chain technology, aiming to achieve governance and decision-making through code implementation of Decentralization. However, most DAOs still require permission from existing members to obtain membership.

Buterin believes that this situation demonstrates a continuous trade-off space for the permission level of DAOs. He proposed a possible solution, which is to require permission from multiple existing members to become a member, while still maintaining high openness.

Analysts believe that Buterin's point of view reflects the degree of Decentralization of DAO follow. Some are concerned that if the DAO is too centralized, it will lose its Decentralization advantage.

However, some people also believe that a moderate licensing mechanism helps maintain the stability and security of the DAO. Completely unrestricted membership may increase the risk of DAO manipulation or attack.

Therefore, seeking a balance between Decentralization and security will be an important issue for the development of DAO.

2. Industry Data

1. DYDX

DYDX recently traded at $1.0122, with a daily increase of +4.40%.

2. GT

GT recent transaction price $8.9650, intraday decline -1.10%.

3. BTC

BTC recently traded at $68,373.40, with a daily increase of +0.00%.

4. APE

APE recent transaction price is $1.2776, with an intraday increase of +71.20%.

5. ETH

ETH recent transaction price is $2646.40, with a daily increase of +0.20%.

3. Industry News

1. Bitcoin breaks through key $69,000 level, one step away from reaching $70,000

BTC broke through the $69,000 mark during the Asian trading session, approaching the historical high of $70,000. BTC has pumped more than 10% this week, mainly driven by expectations of the upcoming U.S. presidential election. It is widely expected in the market that if Trump is re-elected, he will implement a more crypto-friendly monetary policy, thereby bringing new pump momentum to BTC.

Analysts say that BTC has encountered some resistance when approaching its historical high, and it may face some challenges in breaking through $70,000 in the short term. However, in the long run, BTC's supply is limited and demand continues to rise, so its price is expected to continue to rise. In addition, institutional investors' interest in BTC is also increasing, which will bring new capital inflows to BTC.

2. The performance of ETH futures ETF in the first month is mediocre, and the industry has high hopes for it.

As the second largest digital asset in the cryptocurrency field, the performance of ETH Futures ETF was not ideal in its first month of listing. Analysts believe that this is mainly due to factors such as the traditional investment off-season in summer and the prior listing of BTC Futures ETF. However, with the deepening understanding of encryption assets by investors, the performance of ETH Futures ETF is expected to improve in the coming months.

The CEO of Wise Asset Management Company stated that the launch of ETH Futures ETF provides a more convenient investment channel for traditional investors and is expected to further drive institutional funds into the cryptocurrency market. He expects financial advisors to start recommending a 1%-3% allocation of BTC in investment portfolios in the next 3-5 years.

3. Meme coins in the Solana ecosystem are soaring, and investor sentiment is high.

On October 21st, Meme coins in the Solana ecosystem experienced a general rise, with tokens such as FWOG and GIGA reaching new all-time highs. Analysts pointed out that the popularity of Meme coins reflects investors' optimism towards the Solana ecosystem. Over the past year, the Solana ecosystem has developed rapidly, attracting a large amount of funds and projects, laying a foundation for the prosperity of entertainment tokens such as Meme coins.

However, experts also remind investors that memes currently have no actual use cases, with significant price fluctuations, so investment needs to be cautious. The pump of such tokens often stems from speculative trading, and once the hype subsides, there may be a big dump. Therefore, investors need to control the risks when participating.

4. Cryptocurrency fear and greed index rises to 72, investor sentiment tends towards greed

According to Alternative data, the Cryptocurrency fear and greed index reported 72 on October 21st, maintaining in the "extreme greed" zone of 70 or above for several consecutive days. This indicates that investors are overly optimistic about the current market situation, which poses certain risks.

Analysts pointed out that there are indeed some Favourable Information factors in the current Cryptocurrency market, such as the potential for BTC to break through $70,000 and the continuous inflow of institutional funds, but investors should not be too optimistic about this. Historically, when the panic and greed index are at extremes, it usually accompanies violent market Fluctuation. Therefore, investors need to remain cautious and rational, and control their risk exposure.

Overall, the cryptocurrency market is currently at a crucial turning point. Breaking $70,000 will open up new pump space for BTC, but it also faces some potential risks. Investors need to fully grasp the market dynamics, take a rational view, and control risks.

Four. Project News

1. Sushi Labs is about to carry out a strategic acquisition, introducing innovative DeFi primitives

Sushi Labs CEO Jared Grey stated on social media that Sushi surpasses major aggregators on key metrics such as price, gas fees, and latency, and the aggregation volume is steadily rising month by month. He revealed that Sushi is about to announce a strategic acquisition that will enable it to introduce built-in innovative DeFi primitives into verticals such as AMM and Perpetual Futures.

Sushi is a community-driven Decentralization exchange created by former Compound developers. As one of the leading AMMs in the Ethereum ecosystem, Sushi has been constantly innovating and optimizing its products. This acquisition is expected to further enhance Sushi's competitiveness and provide users with a better trading experience.

This move reflects Sushi's continued pursuit of innovation in Decentralized Finance. By introducing new Decentralized Finance primitives, Sushi is expected to make breakthrough progress in areas such as AMM and Derivatives, injecting new momentum into the industry. Industry insiders are generally looking forward to this, believing that Sushi's innovation will further promote the prosperity of the Decentralized Finance ecosystem.

2. LayerZero announced the launch on ApeChainMainnet

Cross-Chain Interaction interoperability protocol LayerZero announced on social media that it has gone live on the ApeChain Mainnet and become its interoperability provider according to specification.

ApeChain is an EVM-compatible chain built on Arrum and incubated by the Bored Ape Yacht Club ecosystem of Yuga Labs. As the official chain of Yuga Labs, ApeChain aims to provide high-performance, low-cost infrastructure for Non-fungible Tokens and the Metaverse applications.

The integration with LayerZero is expected to enhance ApeChain's Cross-Chain Interaction capability, allowing its native Token APE to achieve seamless Cross-Chain Interaction transfers, improving usability across multiple on-chain Blocks. At the same time, LayerZero's addition will also bring more Decentralized Finance and Web3 applications to the ApeChain ecosystem.

Industry insiders believe that the collaboration between LayerZero and ApeChain signifies further integration between the two in terms of interoperability and Non-fungible Token (NFT) field. As one of the leading cross-chain bridges solutions, LayerZero's involvement will enhance ApeChain's ecosystem strength and contribute to its long-term development in the NFT and metaverse tracks.

3. Sui ecosystem DeFi platform DeepBookToken DEEP continues to pump

According to market information, the SUI ecosystem DeFi platform DeepBook Protocol Token DEEP is currently priced at $0.09071, with a 24-hour increase of 59.02%, and a Fully Diluted Valuation (FDV) Market Cap of $907 million.

DeepBook is a Decentralized Finance project built on the SUI chain, which is an Decentralization exchange and AMM protocol. As one of the earlier projects in the SUI ecosystem, DeepBook is committed to providing users with efficient and low-cost trading experience.

The continuous pump of the DEEP token reflects the market's optimistic expectations for the future of the SUI ecosystem in Decentralized Finance. With the continuous development of the SUI ecosystem and the addition of more projects, pioneers like DeepBook are expected to gain more liquidity and users.

Analysts point out that the SUI ecosystem is growing rapidly, and Decentralized Finance is one of its important development directions. As a leading Decentralized Finance project, the performance of DeepBook will to a certain extent affect the development process of the entire SUI ecosystem. In the future, whether DeepBook can continue to innovate and attract more users will be the key to maintaining its leading position.

4. Ternoa roadmap update, accelerating L2 component development

Privacy project Ternoa has released the latest roadmap update on social media. It is reported that Ternoa's L2Testnet is currently running smoothly, and the team is accelerating the development of two key projects.

First, progress has been made in the compatibility between KMS and EVM, which will enhance Ternoa's interoperability in the Ethereum ecosystem. Second, a key tool called TEE Integrity Prover is being developed for L2 components, serving infrastructure such as browsers, wallets, and indexers, with the aim of enhancing the security and reliability of the Ternoa network.

Ternoa is a second-layer scaling solution that focuses on privacy protection. Using encryption technologies such as Zero-Knowledge Proof, Ternoa brings privacy protection and censorship resistance to the Ethereum ecosystem.

Industry insiders believe that the latest developments of Ternoa will help its long-term development in the field of privacy protection. With increasingly strict regulations and rising demand for privacy protection from users, privacy projects such as Ternoa are expected to gain a wider following and application.

V. Economic Dynamics

1. Fed rate hike expectations rise, inflation pressures persist

Economic background: The US economy performed strongly in the first half of this year, with the second quarter GDP rising by 2.4% on an annualized quarterly basis, far exceeding expectations. However, the inflation rate remains high, with the core PCE price index in September rising by 5.1% year-on-year, far above the Federal Reserve's target of 2%. The unemployment rate remains low at 3.5%, and the job market remains tight.

Important event: The Federal Reserve raised the federal funds Intrerest Rate target range by 75 basis points to 3%-3.25% again in September. Several officials hinted at another substantial rate hike in December to curb the spread of inflation expectations. Federal Reserve Chairman Powell reiterated that decisive action will continue until inflation clearly cools down.

Market reaction: The three major US stock indexes plummeted in October, and investors are concerned that a too rapid interest rate hike will drag down the economy. The US dollar index continues to strengthen, reaching a 20-year high. Bond yields soared, with the 10-year US Treasury yield approaching 4.3%. Concerns about an economic recession in the financial markets have intensified.

Expert View: Goldman Sachs expects the Fed to raise interest rates by 75 basis points in November, and to raise the Interest Rate to above 5% in early 2023. Citibank believes that the Fed needs to raise the Interest Rate to the high range of 5.25%-5.5% in order to effectively control inflation. Economists generally expect the U.S. economy to experience mild recession in 2023.

2. The new UK government launches a tax reduction plan, causing financial market turmoil

Economic Background: The UK's inflation rate has risen to a near 40-year high of 10.1%, but the economy is weak, with only a 0.2% rise in GDP quarter-on-quarter in the second quarter. The new Prime Minister, Truss, has launched a large-scale tax reduction plan since taking office in September, aimed at stimulating economic growth.

Important event: The new UK government plans to cut taxes by nearly £200 billion in the next five years, including canceling the previously planned increase in corporate tax rates, canceling the highest income tax rate, etc. However, the plan does not include specific financial details and spending reduction measures, which has raised concerns about the sustainability of UK finances in the market.

Market reaction: The pound against the dollar once big dump to a record low of 1.035. The yield on the 10-year UK government bonds surged to over 4.5%. The UK stock market tumbled sharply, with bank stocks plunging even more. The UK Central Bank was forced to intervene to purchase long-term government bonds to stabilize the market.

Expert opinion: Former Governor of the Central Bank of England, King, believes that the UK government's tax reduction plan is "worrying" and may exacerbate inflationary pressures. The International Monetary Fund has warned that the plan will worsen the UK's fiscal situation and increase inflation risks. The Bank of England may have to raise interest rates significantly in response.

3. The European energy crisis continues to worsen, with increased risk of economic recession

Economic background: The European energy supply shortage has worsened due to the impact of the Russia-Ukraine conflict, leading to a surge in energy prices. The inflation rate in the Eurozone reached a record high of 10% in September. Major economies such as Germany have already fallen into deflation, with a quarter-on-quarter GDP decline of 0.1% in the third quarter.

Important Events: Russia imposes natural gas restrictions on the European Union, and the Nord Stream pipeline leak further intensifies supply concerns. EU countries have introduced energy emergency measures, including power rationing and imposing excess profit tax on energy companies. The European Central Bank raised interest rates by 75 basis points in September, indicating a firm stance against inflation.

Market reaction: The manufacturing PMI in the Eurozone has been in contraction for two consecutive months, indicating a slowdown in the economy. European stocks fell, with the German DAX index down more than 20% this year. The euro fell below the 0.96 level against the US dollar. Bond yields surged, with the yield on Italian 10-year government bonds approaching 5%.

Expert view: Goldman Sachs expects the Eurozone economy to experience a mild recession in 2023. Deutsche Bank expects the Eurozone economy to contract in the fourth quarter of this year and the first half of next year. European Central Bank President Lagarde admits that anti-inflation measures may bring "some economic pain".

Six. Regulation&Policy

1. The Federal Reserve of Minneapolis proposes taxing or banning Bitcoin to address government deficits.

The Federal Reserve Bank of Minneapolis in the United States recently released a research report expressing concern about the impact of BTC on government fiscal policy. The report suggests that the Decentralization feature of BTC may hinder the government's efforts to maintain a permanent deficit, especially in an economy reliant on nominal debt.

Policy background: As part of the US central banking system, the Federal Reserve is responsible for formulating monetary policy and regulating the banking industry. This report reflects the Fed's follow-up on the impact of cryptocurrency on government fiscal policy. As a decentralized digital asset with a fixed supply and no central control, BTC stands in sharp contrast to traditional fiat currencies.

Policy content: The report proposes that if the government wishes to maintain a permanent major deficit, it needs to take one of two measures: banning Bitcoin transactions or imposing a tax on Bitcoin. The report refers to Bitcoin as "private sector securities" with no "real resource requirements" and points out that it creates the so-called "balanced budget trap", forcing the government to balance the budget.

Market reaction: The report immediately triggered strong opposition from BTC supporters upon its release. Some believe it is an 'attack' on BTC, attempting to limit its development, while others see it as a reflection of government concerns about the increasing influence of cryptocurrency.

Expert opinion: VanEck's digital asset research director, Matthew Sigel, said that the Minneapolis Fed's position on BTC is now consistent with that of the European Central Bank. He pointed out that the report envisages legal bans and additional taxes on BTC to ensure that government debt remains the only "risk-free" security. Dan McArdle, co-founder of Messari, believes that a paper published by the bank in 1996 actually aligns with the design concept of BTC.

Overall, this report reflects the potential impact of regulatory agencies on the TradFi system of Crypto Assets. Despite the controversial measures proposed, it provides a perspective for the future development of Cryptocurrency regulatory policies.