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Spot Crypto ETFs Prompted Bitwise to Rethink Its Fund Lineup

The asset manager said the launch of the spot crypto exchange-traded funds this year has made futures-based crypto products less compelling.

Bitwise was one of the money managers who joined the spot bitcoin ETF revolution earlier this year, introducing a fund that now holds $2 billion of the cryptocurrency.

But that plus the subsequent introduction of exchange-traded funds for Ethereum’s ether (ETH) diminished interest in three older Bitwise products that gave investors bitcoin (BTC) and ether exposure in a way now deemed less appealing. This prompted the company to merge that trio of funds, which held futures contracts tied to the cryptocurrencies, into a single product that takes a slightly different tack involving U.S. Treasures.

Bitwise announced the Bitwise Trendwise Bitcoin and Treasuries Rotation Strategy ETF (BITC) on Friday, a fund that combines the Bitwise Bitcoin Strategy Optm Roll ETF (BITC), Bitwise Ethereum Strategy ETF (AETH) and Bitwise Bitcoin and Eth Eq Wgh Str ETF (BTOP).

In a statement, Bitwise said that the launch of the spot bitcoin and ethereum ETFs earlier this year has made futures-based crypto funds less compelling for investors looking for long-term capital appreciation.

With the new fund, the asset manager can better manage the volatility of the crypto market by rotating between 100% exposure to crypto futures contracts and 100% exposure to U.S. Treasuries based on market trends.

“Bitwise is likely just catering to things they’re hearing from clients and potential clients,” said James Seyffart, ETF analyst at Bloomberg Intelligence. “They have an actively managed division within Bitwise, so it makes sense to give it a try. We know there are investors looking to invest in bitcoin but who want to limit the volatility and particularly the downside volatility/drawdowns. I think that’s what this will aim to do. Whether or not it will be successful is something we will learn in the coming years, but timing the market is extremely hard.”

The conversion will likely take place on Dec. 3, the asset manager said. The new fund will charge investors a 0.85% expense ratio.

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HBO Is Joining Search for Bitcoin’s Satoshi. Past Attempts Haven’t Turned Out Great.

A new documentary claims to unmask the creator of Bitcoin.

HBO says it knows who Satoshi is.

The television network is releasing a documentary, “Money Electric: the Bitcoin Mystery,” on Tuesday, with the claim that it will unveil the true identity of Satoshi Nakamoto, the pseudonymous creator of Bitcoin.

The documentary is directed by investigative filmmaker Cullen Hoback, who made a name for himself unmasking the leader of the QAnon conspiracy theory as 8kun site administrator Ron Watkins in a 2021 documentary series for HBO. (Watkins has denied being Q, but two separate linguistic studies found that he was, after taking the mantle from South African computer programmer Paul Furber.) If Hoback really has the investigative chops to sniff out Satoshi’s true identity, too, it would put an end to a mystery as old as Bitcoin itself.

But past efforts by investigative journalists to find the true identity of Satoshi have failed.

In 2014, Newsweek journalist Leah McGrath Goodman published a story called “The Face Behind Bitcoin,” identifying a California-based Japanese-American man named Dorian Satoshi Nakamoto as the creator of Bitcoin. But Dorian Nakamoto denied that he’d ever heard of Bitcoin, and categorically denied being its creator. Goodman’s story was then thoroughly debunked by other journalists.

The following year, tech publication WIRED published a (now heavily-updated) article suggesting that Australian computer scientist Craig Wright could be the inventor of Bitcoin. After the article came out, Wright went on a media blitz, telling publications like the BBC, the Economist and GQ that he was Satoshi. But it didn’t take long for Wright’s story to begin unraveling – and it became clear that Wright, who has a history of questionable business dealings and behavior – was making the whole thing up, likely as a cover for his still-ongoing issues with the Australian Tax Office, as well as to make money (and a name for himself) by copyrighting the Bitcoin white paper.

Wright also went on a lawsuit spree, suing bitcoin developers and the family of a former collaborator in an effort to gain court-ordered access to Satoshi’s trove of untouched 1.1 million bitcoin (which he claimed to have lost access to by stomping on the hard drive that contained his private keys). He also sued – and threatened to sue – anyone who suggested that he was a fraud, including podcaster Peter McCormack and former public school teacher Magnus Granath (aka Hodlnaut).

But Wright was, in fact, a fraud, according to a U.K. court that definitively ruled earlier this year that Wright was not Satoshi Nakamoto, and ordered Wright to publicly post admissions he was not the creator of Bitcoin on both his website and social media accounts. Wright has pledged (to his ever-dwindling number of supporters) to appeal the decision.

Wary of another public failure, the media has – until now – been reticent to publicly name another Satoshi candidate. And, in the meantime, the crypto industry itself has largely come to a consensus that the identity of Satoshi is better left a mystery. American crypto exchange Coinbase even cited the unmasking of Satoshi as a potential business risk in its S-1 prospectus filed ahead of going public.

But that doesn’t mean that the public’s curiosity over the true identity of Satoshi has abated. There have been convincing arguments made that any one of a number of early cypherpunks could be the creator of Bitcoin.

Some of the most commonly suggested Satoshi potentials are computer programmer Hal Finney (who died in 2014, and lived near Dorian Satoshi Nakamoto), Bit Gold creator Nick Szabo, Hash Cash developer Adam Back, and b-money creator Wei Dai. All of them have denied being Satoshi. Less common theories point to former programmer and criminal cartel boss Paul Le Roux (who is currently in prison) or the Central Intelligence Agency (CIA). Still others believe Satoshi was not an individual, but a group of coders working together.

Among Polymarket bettors, 46% have put their money on another candidate: computer programmer and cypherpunk Len Sassaman, who killed himself in 2011, shortly after Satoshi stopped posting on BTCTalk, an early forum for crypto discussions.

Galaxy Digital’s Alex Thorn posted on X that if Sassaman was indeed identified as Satoshi in the HBO documentary, it would be “neutral to positive” for BTC given that Sassaman has since died. (If Satoshi is still alive and has access to the 1.1 million BTC tied to him/her/them, if that stockpile were ever sold, that could in theory crater the asset’s price.)

Like Finney, Szabo, Back and the others, there have been convincing arguments made that Sassaman could be Satoshi. A convincing argument, however, is not the same thing as proof. Though the new HBO documentary teases “never before seen clues,” the real smoking gun would be the movement of Satoshi’s coins – something that no claimant has been able to do.

If Satoshi is dead, or unwilling to go public – even to access the treasure trove of bitcoins worth roughly $68 billion at today’s value – that proof may never come.

U.S. Election Betting: Regulated Presidential Markets Are Live, and Tiny Compared to Polymarket’s

With a month to go before Election Day, Kalshi and Interactive Brokers have listed prediction markets on the race for the White House.

Two U.S.-regulated, dollar-denominated prediction markets began taking bets on the presidential race this week, with a month to go before Election Day.

Kalshi, which fought a long legal battle with the Commodity Futures Trading Commission to offer election contracts in the U.S., launched its presidential markets on Friday, following Wall Street powerhouse Interactive Brokers’ (IAB’s) ForecastEx, which did so the day before.

So far volumes are modest at both CFTC-supervised exchanges, with $344,101 worth of contracts traded on Kalshi and $346,000 on ForecastEx. By comparison, more than $1.2 billion has been staked on the race between Kamala Harris and Donald Trump at Polymarket, the crypto-powered prediction market platform, which, despite prohibiting U.S. users under a CFTC settlement, has reaped record volumes this year while Kalshi and IAB sat on the sidelines awaiting legal clarity.

“It will be hard for the two sites to catch up, but that is not entirely impossible,” said Koleman Strumpf, an economics professor at Wake Forest University in North Carolina. For one thing, “some traders may switch from Polymarket to the other sites,” he told CoinDesk. (Despite geofencing, American traders have reportedly been using VPNs to access Polymarket.)

Moreover, “more than half of all trades will happen between now and election day if history is any guide (and there is more volume for close races which this looks to be),” said Strumpf, who has studied the history of election markets.

However, Aaron Brogan, a managing attorney at Brogan Law, said that Polymarket has two advantages beyond being the first mover.

“Polymarket is theoretically accessible to people all over the world. In contrast, Kalshi’s products aren’t available to ‘foreign nationals’ and certain other excluded groups,” he said. “Second, Polymarket doesn’t have explicit position limits, but Kalshi’s rules do. In this case, the limit is quite high, but it’s conceivable that this could be a limiting factor on total market size.”

Price differences

Early afternoon Friday in New York, prices of “yes” shares for Harris were trading at 51 cents, signaling traders give her a 51% chance of winning. Trump’s odds on Kalshi were at 50%.

Harris was also leading Trump on ForecastEx, but by a wider margin, 53-47. Meanwhile, on Polymarket, the two candidates were neck and neck, at 49% each.

Harry Crane, a statistics professor at Rutgers University in New Jersey, said these differences were not very meaningful. “We’re used to using polls in election forecasting, and with polls, there’s a well-understood margin of error, three percentage points usually, depending on sample size,” he said.

Similarly, in markets there is sometimes a “margin of inefficiency” where any profits to be made from arbitraging price differences are not worth the effort. “There’s no sufficient incentive for anyone to scoop up the penny that the difference might present.”

But prediction markets “don’t need to be identical to be useful for forecasting,” Crane said. Over time, observers can collect data on these markets, determine which ones had stronger predictive track records, and come up with a consensus forecast that might put more weight on one market than another, he said.

Unfinished business

Kalshi sued the CFTC last year after the agency denied its application to list contracts on which party would control each house of Congress. The company won the case (which the CFTC is appealing) and listed the congressional contracts on Sept. 13.

They traded for only a few hours before the appeals court granted the CFTC an administrative stay freezing the contracts, which it lifted Wednesday. Emboldened, the company not only revived the congressional contracts but self-certified the presidential one. Self-certification is the process whereby CFTC-regulated entities list products without the agency’s prior approval. IAB, which started ForecastEx over the summer, quickly followed suit.

The CFTC, which is also considering a proposal to ban political event contracts at the exchanges on its watch, has asked the appeals court to expedite the case. Among other reasons, the agency said its proposed regulation “may be substantially impacted by this Court’s decision on the merits.”

But it’s apparently given up on stopping these contracts from trading before the election. Its proposed timetable would have briefs filed by Nov. 22 (more than two weeks after Americans cast their votes) and oral arguments heard on Dec. 2.

Australia’s Police Confiscates Crypto Worth $6.4M in Crackdown on ‘Ghost’ Messaging App

Operation Kraken has nothing to do with the cryptocurrency exchange Kraken, the company said.

Australia’s police has confiscated $6.4 million in cryptocurrency as part of a global crackdown on Ghost, an encrypted communications network, authorities allege was “built solely for the criminal underworld,” a statement said.

The seizure of the cryptocurrency comes two weeks after the AFP arrested a Sydney resident Jay Je Yoon Jung, 32, the alleged mastermind behind Ghost. He appeared in a Sydney court on Wednesday to face the charges. Another man who allegedly distributed the app has also been arrested.

The seized crypto has been transferred into secure AFP cryptocurrency storage and the authorities will seek its permanent forfeiture.

The effort is titled Operation Kraken but Kraken the cryptocurrency exchange “has not been the subject of any Operation Kraken investigations,” an AFP spokesperson wrote in an email to CoinDesk. “Operation Kraken was an investigation into a dedicated encrypted communications platform.”

A Kraken spokesperson said, “We’re disappointed by this operation’s codename, which has absolutely nothing to do with our brand.”

The crackdown last month saw 700 AFP members execute 93 search warrants, arresting 46 people, intervening in 50 threats to life, and seizing 30 illicit weapons and 200 kg of illicit drugs, the AFP said.

Robinhood Introduces Crypto Transfers in Europe as It Doubles Down on Expansion

The trading app will let customers deposit and withdraw over 20 cryptocurrencies, including bitcoin, ether, solana and USD coin.

Robinhood (HOOD) customers in the European Union can now transfer more than 20 cryptocurrencies, including include bitcoin (BTC), ether (ETH), solana (SOL) and USD coin (USDC), in and out of the trading app.

The California-based company is expanding its offerings as the bloc’s crypto laws known as Markets in Crypto Assets (MiCA) come into effect.

“With the launch of crypto transfers in Europe, we’re making self-custody and entering DeFi simpler and more accessible for our customers,” Johann Kerbrat, VP and general manger of Robinhood Crypto, said in a statement. “Support for deposits and withdrawals gives customers more control over their crypto, while ensuring they have the same safe, low-cost, and reliable experience they expect from Robinhood.”

The new capability comes 10 months after the trading app started letting customers in the EU trade crypto, saying the region has one of the world’s most comprehensive policies for crypto asset regulation.

In March, the company fully rolled out its brokerage operations in the U.K. It began to onboard customers in the non-EU country a year ago after an earlier attempt failed due to a shift of focus during the Covid pandemic.

Many U.S.-based crypto exchanges have doubled down their operations in Europe after the advent of MiCA, which will come into effect this year. Coinbase (COIN), the largest U.S. exchange, is looking to offer derivatives in the European Union, it announced in January, while Kraken recently acquired a German crypto service provider to expand its footprint in the region.

Diddy Hires Sam Bankman-Fried’s (New) Lawyer

The unlikely pair already share a cell. Now they share a lawyer.

Sean “Diddy” Combs has hired Sam Bankman-Fried’s lawyer, Alexandra Shapiro, to appeal a New York judge’s decision to keep him locked up while he awaits trial for racketeering and sex trafficking charges.

Bankman-Fried, who was sentenced to 25 years in prison in March for the collapse of his crypto exchange, FTX, hired Shapiro to handle his appeal shortly after his conviction. Last month, she filed a 102-page appeal in the Second Circuit, requesting a new trial for Bankman-Fried and accusing the judge overseeing his case of being unfairly biased against him.

Lawyers interviewed by CoinDesk are largely skeptical of the appeal’s chance of success.

The fraudster is currently six months into his sentence, and has chosen to remain in Brooklyn’s notoriously dangerous Metropolitan Detention Center (MDC) while he awaits the outcome of his appeal, rather than be moved to a low-security prison near his family in California.

The unlikely result of Bankman-Fried’s decision to stay in MDC is that he’s now roommates with Diddy. According to a recent report from the New York Times citing sources familiar, Bankman-Fried and the rapper are both living in the same unit of the jail, sleeping in a “dormitory-style room” with other inmates.

On Sep. 12, New York prosecutors charged Diddy with racketeering conspiracy, sex trafficking of children by force, fraud or coercion and transporting for prostitution.

The sex trafficking charge alone carries a maximum sentence of life in prison, with minimum sentences of 10-15 years depending on the ages of the victims. The racketeering conspiracy charge and the transportation for prostitution charge carry maximum sentences of 20 and 25 years in prison, respectively.

Tether’s USDT Has Uses Beyond Crypto Markets, Trading: CEO Paolo Ardoino

Ardoino said there’s more of a need for stablecoins outside the U.S., especially in countries with rampant inflation and shoddy financial infrastructure.

Tether’s USDT may have started as a cryptocurrency, but today the largest stablecoin by market value is the most used digital dollar in the world, Tether CEO Paolo Ardoino said in an interview with Bullish CEO Tom Farley.

Bullish is the owner of CoinDesk and a significant holder of USDT.

Stablecoins, cryptocurrencies whose value is pegged to a real-world asset, form the backbone of crypto trading. They provide a way to store value within the cryptocurrency market without worrying about the fluctuations of cryptocurrencies like bitcoin (BTC). Most are linked 1:1 to the U.S. dollar, though some reflect other currencies and assets such as gold.

But there’s more to USDT than crypto markets, Ardoino said. In countries like Argentina and Turkey, the stablecoin provides a lifeline as an alternative to volatile national currencies. Before the widespread adoption of USDT, people in inflation-stricken countries had to resort to the black market to get dollars.

“USDT works much better outside of the U.S.,” he said. “In the U.S., there are 15 different transport layers for the U.S. dollar. You have banks, credit cards, debit cards. You have Venmo, PayPal, Cash App, and many others … But who needs a dollar?”

That might help explain why USDT is not only the largest stablecoin, with a market cap of almost $120 billion, it’s the third-largest cryptocurrency overall. Only bitcoin (BTC) and ether (ETH) are larger. And it’s more than three times the size of its nearest rival, Circle’s $35.6 billion USDC.

More than half of USDT – $61 billion – is issued on the Tron blockchain, with $54.3 billion on Ethereum, the blockchain most widely associated with decentralized finance (DeFi). That’s because it’s significantly cheaper to conduct transactions on Tron, Ardoino said.

According to Etherscan, the transaction costs known as gas fees for a simple swap on Ethereum average around $14.60. On Tron, it’s closer to 20 cents.

“Imagine someone living in Haiti that earns $1.34 per day. How can they pay $5 for transaction fees?” he said. “These markets cannot afford to pay five, six dollars per transaction on Ethereum or some other chain.”

Ardoino also discussed another angle where stablecoins and geopolitics intersect: Treasury bills. The debt provides backing for the cryptocurrency, easily switchable into dollars if USDT holders want to cash out. And, in the meantime, the interest payments roll into Tether’s coffers.

While the Beijing government, the second-largest holder of U.S. government debt, continues to trim China’s holdings of U.S. Treasury bills, stablecoin issuers like Tether have had a voracious appetite for them, scooping up just over $100 billion worth as the People’s Bank of China dumps them.

If Tether were a country, data shows, it would have holdings equivalent to Germany and would be closing in on South Korea.

“We added resiliency to the ownership of the U.S. dollar, so now you don’t have one single country, one single decision maker that can sell hundreds of billions of T-bills at once,” Ardoino said. “USDT and Tether are the best friends for the U.S. dollar.”

Cantor has most of Tether’s reserves

For most of its history, the state of Tether’s reserves has been a big question mark, and for good reason.

During its early days the company was repeatedly de-banked and was a bit of a vagabond, having to open and close accounts around the world from Qatar to China, Taiwan and Canada.

When USDT’s backing was unclear, CoinDesk fought to have the full details of Tether’s banking relationships released by the New York State Attorney General, which had obtained them during an investigation. The stablecoin is banned in New York as part of a settlement). Initially, the NYAG opposed CoinDesk’s Freedom of Information Law (FOIL) request for details about the reserves, but a judge dismissed their case.

Now, things have changed and the relationship is more simple: Most of the money is managed by financial services firm Cantor Fitzgerald with the bank’s CEO, Howard Lutnick, regularly vouching for the stablecoin issuer.

Ardoino said that Lutnick would have a perfect line of sight into the reserves backing USDT, and Tether completes the same style of attestation by a large accounting firm as its competitors.

“Whoever believes in these conspiracy theories should get out from their mother’s basement,” he said, referring to speculation the company doesn’t have sufficient backing for USDT.

The market doesn’t seem to.

A Polymarket contract gives a 4% chance that Tether will declare insolvency in 2024, which is lower than the market’s belief that a nuclear weapon will be used this year, which comes in at 9%.

Bitwise Takes a Step Toward XRP ETF

Ripple’s XRP barely budged after the Delaware filing was confirmed.

Crypto native asset manager Bitwise is moving toward creating an exchange-traded fund tracking (XRP), the token closely associated with crypto company Ripple.

The firm registered a trust entity in the state of Delaware on Tuesday, which appeared on the state’s Division of Corporations website. Registering a trust entity is a first step toward filing to list and trade shares of an ETF; companies like Bitwise, Blackrock and Fidelity all filed trust entities for bitcoin (BTC) and Ethereum’s ether (ETH) ahead of filing for ETFs following those tokens.

A spokesperson for Bitwise confirmed that the filing was real.

“We can now confirm that this is both legitimate and from Bitwise,” the spokesperson said.

This isn’t the first time that rumors about a potential XRP ETF have circulated.

Similar filings, which later turned out to be illegitimate, have previously been uploaded to the website in an attempt to pump the token’s price.

In November, for example, a filing for an apparent BlackRock XRP ETF appeared on the website, which was later confirmed by the asset manager to be false.

Despite the news, XRP’s price has not fluctuated much Tuesday, though much of the broader market fell heavily over the past 24 hours.

The Spectre of Sam Bankman-Fried Overshadowed Caroline Ellison’s Sentencing

Even though the FTX founder was not a part of last week’s proceedings, his role in the Alameda CEO’s life loomed large.

Caroline Ellison, flanked by her attorneys, was sentenced to two years in prison and three years of supervised release for her role in propping up FTX and Alameda Research last week.

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24 months

Caroline Ellison was not the main character at her own sentencing hearing.

When a federal prosecutor and a defense attorney took the stand to discuss Caroline Ellison’s conduct before and after the collapse of FTX, her former boss – and yes, former boyfriend – Sam Bankman-Fried took center stage.

Bankman-Fried was convicted a year ago and sentenced more than six months ago. Neither he nor any of his representatives had a role in Ellison’s hearing last Tuesday. And yet, much of Ellison’s actions were presented through the frame of Bankman-Fried’s conduct.

Assistant U.S. Attorney Danielle Sassoon, the prosecutor who toyed with Bankman-Fried during his cross-examination last year, leading to some indelibly awkward interactions, contrasted Ellison with the FTX founder on Tuesday.

Bankman-Fried showed no remorse, while Ellison did. Bankman-Fried posed a threat, while Ellison was not a recidivism risk. Bankman-Fried masterminded FTX’s sketchy actions, while Ellison merely carried out her former boss’s bidding, Sassoon stressed in her opening statement.

“Your Honor had the opportunity to observe Ms. Ellison’s demeanor when she testified on the stand,” she said. “She was the same person who came to proffer with [the DOJ in 2022 and 2023] … just from a standpoint of demeanor, this was a sharp contrast with Bankman-Fried.”

Anjan Sahni, the Wilmer Hale partner representing Ellison on the stand, spoke a bit more about Ellison as a person, but still contrasted her with Bankman-Fried. Her role at Alameda was due to Bankman-Fried, her concealing Alameda’s financial situation was at the request of Bankman-Fried, indeed the central question of how Ellison came to a sentencing hearing having pled guilty to fraud and conspiracy charges came down to “why did Caroline go along with Sam Bankman-Fried,” he said.

The true tragedy, Sahni said, was “how rapidly and needlessly the trajectory of Miss Ellison unraveled,” when she came into contact with Bankman-Fried.

“Over time, her whole professional and personal life revolved around Bankman-Fried,” he said. Ellison’s primary concern was being “good enough” for the one-time golden boy of crypto. When he expressed romantic interest in Ellison, it was “genuinely thrilling” for her.

She had the opportunity to walk away at several points, her lawyer told the court, but she didn’t. “She could not bring herself to leave Bankman-Fried’s orbit…in hindsight, she sees it was crazy to stay.”

Ellison blinked rapidly throughout the hearing, frequently wringing her hands and wrapping her arms around herself as she listened to her attorney speak, cried as she spoke to the judge.

“At each stage of the process, it became harder and harder to extricate myself,” the 29-year-old said, her voice wavering. “I’m sorry I wasn’t brave.”

Even Judge Lewis Kaplan referenced Bankman-Fried as he read out his sentence, saying the FTX founder had Ellison’s “kryptonite” and noting that the guidelines recommendation for the two were identical.

Ellison cooperated, while Bankman-Fried “denied the whole thing,” he said.

“While you were greatly culpable in this fraud, no doubt about it, that remarkable cooperation…is a fundamental distinction between you and Mr. Bankman-Fried,” Kaplan said.

The judge seemed sympathetic to Ellison, and praised her extensive cooperation with prosecutors.

“You’re a very strong person in some ways, Miss Ellison. You were vulnerable and you were exploited,” Kaplan said. “You are genuinely remorseful … your testimony was honest. Mr. Bankman-Fried, as I said at his sentencing, perjured himself. There’s no way you’re ever going to do something like this again, I am persuaded.”

But her remorse, it seems, wasn’t enough to spare Ellison a custodial sentence.

“In a case this serious, to be literally a get-out-of-jail-free-card is not something I can see my way through to,” Kaplan said.

Ellison was sentenced to 24 months in prison, and will serve at least 1.5 years before being eligible for parole.

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Bitcoin Plunge Causes $450M in Bullish Crypto Bets Liquidated

Crypto market capitalization dropped 5% on average as Middle East tensions flared up late Monday, denting growth in risk assets.

Futures tied to major tokens saw over $450 million in long liquidations in the past 24 hours as a bitcoin (BTC) plunge led to losses among major tokens, with some falling as much as 8%.

CoinGlass data shows that bitcoin traders betting on higher prices lost over $122 million, while bets on ether (ETH) lost nearly $100 million. Smaller alternative tokens (altcoins) recorded over $85 million in liquidations — the highest such figures since July — with memecoin pepe (PEPE) an unusually high $10 million in liquidations.

A liquidation occurs when an exchange forcefully closes a trader’s leveraged position due to the trader’s inability to meet the margin requirements. Large-scale liquidations can indicate market extremes, like panic selling or buying. A cascade of liquidations might suggest a market turning point, where a price reversal could be imminent due to an overreaction in market sentiment.

Global equities and risk assets such as bitcoin took a hit Tuesday as Iran launched missiles on key Israeli locations, with the latter threatening retaliation in the coming days. BTC slid to as low as $60,300 in its worst start to a historically bullish month late Tuesday, before recovering above $61,500 in Asian trading hours Wednesday.

The drop caused pain for futures traders, who took on their biggest losses since early August.

The data shows that nearly 86% of all futures bets were bullish. Traders were positioning for higher prices in the weeks ahead as October traditionally favors BTC, with only two negative months since 2013.

Market conditions in the past few weeks, including global monetary policies and U.S. political support, indicated a continued bullish trend, with some traders targeting $70,000 for BTC in the coming weeks.