Welcome to the institutional newsletter, Crypto Long & Short. This week:
- CoinDesk Indices’ Andy Baehr provides a “Vibe Check” that tells the story of two markets – the fast money and the slow money.
- CoinDesk’s Sam Ewen says it’s no surprise that internet-native communities want internet-native currencies, and why stablecoins are the logical bridge. .
- In “Chart of the Week” we examine Athena’s USDe decline and what caused the decline.
As always, you can contact me on LinkedIn to share topics you’d like covered in future newsletters. Thanks for joining us!
-Alexandra Levis
Vibe Check
Fast money, slow money
– Off Andy Baehr, CFA, Head of Product and Research, CoinDesk Indices
The fast money have kept their distance lately. Two months ago on a Sunday afternoon eastern time, a whale dumped 24,000 bitcoins in thin liquidity, spooking the market and sending prices lower. ETH’s all-time high of $4,955 was only hours old. The broad six-month rally that pushed the CoinDesk 20 index to its own record high of 4,493 ended. SOL tried to carry the baton another leg, but the market did not follow.
The Fed’s rate cut on September 17 – a quarter point and two more signaled – failed to restore momentum. Geopolitical tensions and customs fears weighed on risk appetite. DATs corrected from sugar high levels. When bitcoin registered a new all-time high in early October, it seemed the coast was clear. Then came October 10: President Trump’s announcement of 100% tariffs on Chinese imports triggered the most severe liquidation event in crypto history. Questions about market structure and fragility became louder. People AI’d”automatic downshift.” The ongoing government shutdown hasn’t helped sentiment either. Even gold, which defied gravity all year, fell 5.7% from its peak last week, the biggest one-day drop in over 10 years. My YouTube feed showed goldsmith Moses taking a cooled Audemars Piguet to the smelter and harvesting the gold, if that’s not a top?
Top names and benchmark indices have had a rough ride over the past two months
Source: CoinDesk Indices
The slow moneynever stopped though.
The M&A kept moving: Coinbase bought Echo for $375 million. FalconX bought 21Shares. Ripple completed its $1.25 billion purchase of Hidden Road and renamed it Ripple Prime.
The regulation is advanced: The SEC approved generic listing standards on Sept. 17, reducing crypto-ETF turnaround times from 240 days to 75. The SEC also approved GDLC, the first crypto ETF in the U.S. to track a market index, CoinDesk 5.
Integration accelerated: JPMorgan to accept bitcoin and ether as collateral for institutional loans. Jamie Dimon’s “pet rock” now backs loans at the world’s biggest bank.
The asset class continued to build, integrate and mature – even as prices tested faith. Now bitcoin is sitting right where it was two months ago before the whale struck. ETH and SOL have regained key levels and have room to run. The fast money may be back, but the slow money never went away.
Expert insight
Stablecoins and Internet-Native Money
– Off Sam Owenhead of social media, multimedia and media innovation, CoinDesk
Vice is 31 years old.
The Sims is 25.
Facebook is 21.
Roblox is 19.
Minecraft is 16.
Instagram is 15.
All but two of them existed before Bitcoin.
The rise of crypto didn’t just create a new form of money – it matured alongside an entire generation that grew up living in digital economies. Social media gamers and participants—the true Internet generation—were building, shopping, collecting, and socializing in virtual worlds long before “Web3” had a name. Now they are adults with purchasing power, investment theses and a deep intuition for how value moves online.
It’s no surprise that internet-native communities want internet-native currencies. Stablecoins are the logical bridge – the technology best positioned to capture this generational and behavioral shift.
If you were 30 in the year 2000, entering your credit card on a website felt risky. Today, over $16 billion is spent every day on e-commerce. Trust developed with time and experience. The same will happen with digital money. Age matters – and today’s younger consumers, entrepreneurs and investors are native to digital value.
Now zoom out. Between 75-88% of the world still falls under what is called Global South: those living outside the First World, so-called ‘Western’ countries. Places where traditional banking infrastructure lags behind connectivity. One example is sub-Saharan Africa, where, as recently reported by Chainaylsis, “a sudden currency devaluation led to increased crypto adoption…[and] more users move[d] into crypto to hedge against inflation.” Combine necessity with a population becoming more digitally fluent by the day and money moving at the speed of light, and the stablecoin thesis becomes impossible to ignore.
Over the past month I have been on the ground in Rio, Seoul and Singapore. Three wildly different cities – yet the same conversation everywhere: stablecoins and cross-border payments.
Make no mistake: the digitization of currency is accelerating, and the traditional gatekeepers are officially on notice. Evolve – or be disrupted. Does it cause disturbance? Blockchain and stablecoins.
Chart of the week
Let’s look at Athena’s USDe, which has recently dropped from $14 billion to $10 billion over the last 30 days. This decline stems directly from the compression of USDe’s dividend, driven by BTC and ETH’s perpetual funding rates. The blended rate has recently dipped into negative territory on several occasions, but has now recovered to a more favorable range of 2-4%. This fundamental recovery in funding will quickly restore USDe’s return proposition, thereby encouraging capital to flow back into the stablecoin and reversing the recent downward trend in its market capitalization.
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