Welcome back 👋. Each edition we cut through the noise and explain what’s driving crypto. This edition, JPMorgan added bitcoin to its long-term market forecast for the first time and expects it to beat stocks and gold. Plus, Blockchain 101 wraps up with a recap before Blockchain 201 begins next edition.

- Validator Digital

Bitcoin slipped over the past two weeks, briefly dropping below $80,000 on October 16 after hotter than expected inflation data and a selloff in AI stocks. The Alts, including Ether and Solana fell even harder. Investors pulled money from bitcoin funds for most of the period, then put $527 million back in on October 19, while ether funds lost $915 million.

👀 What to Watch Next

The Fed decides on rates October 27 and 28, after raising them in September for the first time since 2023. Following the inflation report, markets put roughly a 40% chance on another hike this month.

What Happened
On October 19, JPMorgan Asset Management included bitcoin for the first time in its yearly Long-Term Capital Market Assumptions, its 10 to 15 year return forecast for more than 200 investments. It expects bitcoin to return about 10% a year, ahead of large US stocks at 7.5% and gold at 5.5%. JPMorgan still calls bitcoin a speculative asset and has left it out of the model portfolios built from the forecast.

Why It Matters
JPMorgan describes the forecast, now in its 31st year, as a foundation for building client portfolios and long-term investment plans. Bitcoin now sits in that table with its own expected return, next to stocks, bonds and gold.

The Bottom Line
Bitcoin now has a long-term return forecast from the largest US bank, in the same planning tool it uses for stocks and gold.

Mastercard Now Lets Businesses Pay With Stablecoins
Mastercard launched a service that lets businesses hold stablecoins, crypto tokens designed to stay worth one dollar, and spend them on a Mastercard card or send them to someone’s bank account as regular money. Businesses holding stablecoins can now pay through Mastercard’s network, which reaches more than 17 billion cards, bank accounts, and digital wallets.

Europe Says USDC Has Grown Big Enough for Its Strictest Rules
USDC, Circle’s digital dollar, is the first stablecoin the EU’s banking regulator will supervise directly, with tougher rules starting November 12. A US dollar stablecoin is now an officially recognized part of Europe’s financial system.

BlackRock Files for a Bitcoin Fund That Limits Losses
BlackRock filed on October 19 for its third bitcoin fund, which limits how much investors can lose in exchange for capping how much they can gain. Investors who want bitcoin but worry about its price swings would get a safer way in from the world’s largest asset manager.

BNY and Citadel Use a Tokenized Government Bond to Borrow Cash
BNY, the bank that safeguards $63.4 trillion for its clients, turned a US government bond bought by Citadel Securities into a digital token on its own ledger, and Citadel then pledged it for an overnight cash loan, which BNY says is a first for one of Wall Street’s main lending systems. The purchase settled in minutes instead of the next business day, so firms can borrow against a bond the same day they buy it.

Samsung Wallet Adds Digital Dollar Transfers for 82 Million US Galaxy Phones
Starting the last week of October, Samsung Wallet will let US Galaxy owners send USDC, a stablecoin worth one dollar, to other crypto wallets or to bank accounts in more than 60 countries, where it arrives as local currency. Galaxy owners will be able to send money abroad from the wallet app already on their phone.

Bitcoin Leads JPMorgan’s 10 Year Outlook
At JPMorgan’s forecast rates, bitcoin would gain 159.4% over 10 years, compared with 106.1% for large US stocks and 70.8% for gold.

Here’s everything we’ve covered so far, all in one place.

A blockchain is a shared record book with no single owner. Each block is a page, and the chain links every page to the one before it, so old history can’t be changed. Validators check new pages, and Proof of Stake keeps them honest by putting their own crypto at risk. The staking queue lets validators join or leave at a steady pace. A transaction says who sent what to whom, signed by the sender. A wallet holds the keys that prove what’s yours.

So far we’ve covered how a blockchain records who owns what. Next, Blockchain 201 looks at what else it can do, starting with smart contracts.

Next Week: Blockchain 201
Last Week: What is a Wallet?

What story from this week are you watching most closely? Hit reply and let us know.

See you next week,

Don’t speculate, validate.
- Validator Digital

Disclaimer: Individuals have unique circumstances, goals, and risk tolerances, so you should consult a certified investment professional and/or do your own diligence before making investment decisions. The author is not an investment advisor and may hold positions in the assets covered. Certified professionals can provide individualized investment advice tailored to your unique situation. This newsletter is for general educational purposes only, is not individualized, and as such should not be construed as investment advice.