Bitcoin rally delivers $4.1 billion tax windfall for Strategy

The US services prices gauge hit a four-year high in September, rising to 74.0, while the services PMI eased to 54.9. Fed Vice Chair Philip Jefferson noted upward inflation risks, complicating Bitcoin's rate-relief outlook. Rising input costs and uncertain rate adjustments may pressure leveraged Bitcoin positions.

Binance Research reports Bitcoin's 54.2% drawdown appears milder than past declines, but adjusted for volatility, it's comparable. Historically, rebounds from shallow drawdowns often fail. Bitcoin's current 35.6% drop suggests a similar outcome. Crypto equity inflows surged to $163M last week, with Circle, MicroStrategy, and BitMiner attracting significant investment.

The SEC approved the first 3X Bitcoin and Ether ETFs, allowing 3X daily returns. Operated by Volatility Shares, these funds use regulated futures, not actual cryptocurrencies. The SEC has not yet allowed trading. These ETFs target daily moves, not long-term performance, and reset leverage daily, creating volatility decay. The CFTC is also involved in crypto regulation.

Bitcoin (BTC) rose 0.56% to $85,738.64, tracking the broader crypto market's 0.50% increase. Strive Asset Management bought 2,000 BTC for $169 million, expanding its holdings to 29,462 BTC. The purchase was funded by selling Seta preferred stock. Analysts note Bitcoin's price is influenced by macro factors like the S&P 500 and gold, with key levels at $85,825.34 and $87,397.

The Commodity Futures Trading Commission (C.F.T.C.) is planning to establish crypto rules without congressional approval, following the failure of the Clarity Act. Bitcoin is trading around $86,100, showing slight gains. The C.F.T.C. has proposed two new regulations, CTX and CAM, to oversee crypto asset transactions and markets, aiming to prevent fraud. The market's reaction to these developments remains uncertain.

The CFTC proposed federal regulations for crypto exchanges, covering trades involving leverage and requiring customer protections. The rules aim to standardize oversight, with compliance costs potentially impacting some products. BTC and ETH prices remained stable, while altcoins saw mixed movements. The US Treasury rejected two crypto surveillance proposals, and the SEC approved leveraged funds. Ethereum tested cross-chain transactions, and OKX plans to tokenize major stocks.