Welcome to the latest edition of the institutional newsletter, Crypto Long & Short. This week, we bring you:
- Andy Baehr from CoinDesk Indices shares a “Vibe Check,” discussing the dynamics of two markets — fast money and slow money.
- Sam Ewen from CoinDesk explains why internet-native communities desire internet-native currencies and how stablecoins serve as the natural bridge.
- In our “Chart of the Week,” we take a closer look at the decline of Ethena’s USDe and the factors behind it.
As always, feel free to connect with me on LinkedIn for any topics you’d like to see in future newsletters. Thank you for being with us!
Vibe Check
Fast Money, Slow Money
– By Andy Baehr, CFA, head of product and research, CoinDesk Indices
The fast money has been largely absent recently. A couple of months back, a whale sold 24,000 bitcoins on a Sunday afternoon Eastern time, causing a stir in the market and pushing prices down. At that time, ETH had just reached an all-time high of $4,955. This was the conclusion of a vigorous six-month rally that had propelled the CoinDesk 20 Index to its height of 4,493. SOL attempted to bridge the gap, but the market did not cooperate.
The Federal Reserve’s quarter-point rate cut on September 17 — along with signals of two more — failed to revive the momentum. Geopolitical uncertainties and tariff concerns dampened risk appetite. DATs experienced a correction from previously inflated levels. Although bitcoin reached a new peak in early October, the landscape shifted dramatically on October 10 when President Trump announced 100% tariffs on Chinese imports, igniting one of the most significant liquidation events in crypto history. This raised urgent questions regarding market structure and fragility. The wave of automatic deleveraging began to unfold. The ongoing government shutdown further clouded sentiment. Even gold, which had defied the odds all year, plummeted 5.7% from its peak last week — marking its largest one-day decline in over a decade. My YouTube account suggested that Moses the Jeweler was melting down an iced-out Audemars Piguet for its gold. If that’s not indicative of a market peak, I don’t know what is.
Top cryptocurrencies and benchmark indices have faced challenges over the past two months
Source: CoinDesk Indices
The slow money, however, continued to thrive.
Mergers and acquisitions were active: Coinbase acquired Echo for $375 million. FalconX took over 21Shares. Ripple completed its $1.25 billion purchase of Hidden Road, which has now been rebranded as Ripple Prime.
Regulatory progress was evident: on September 17, the SEC approved general listing standards, reducing the review time for crypto ETFs from 240 days to just 75. The SEC also greenlighted GDLC, marking it as the first crypto ETF in the U.S. to track a market index, specifically the CoinDesk 5.
Integration is on the rise: JPMorgan has begun accepting bitcoin and ether as collateral for institutional loans. Jamie Dimon’s once-dismissed “pet rock” is now backing loans at the world’s largest bank.
The asset class is effectively building, integrating, and maturing, despite price fluctuations testing investor confidence. Currently, bitcoin is holding steady at the levels it occupied before the whale sell-off. With ETH and SOL regaining vital thresholds, they have potential for further gains. While fast money may be attempting a comeback, the slow money has remained consistent.
Expert Insights
Stablecoins and Internet-Native Money
– By Sam Ewen, head of social media, multimedia and media innovation, CoinDesk
Vice is celebrating its 31st anniversary.
The Sims has reached 25 years.
Facebook has turned 21.
Roblox is now 19.
Minecraft is celebrating its 16th year.
Instagram has hit 15.
Most of these platforms existed even before Bitcoin came about.
The rise of crypto didn’t merely introduce a new form of currency — it evolved alongside a generation that immersed themselves in digital economies. Gamers and social media users — the true internet generation — have been building, trading, collecting, and socializing in virtual realms long before “Web3” was a recognized term. Now, these individuals are adults wielding purchasing power, formulating investment ideas, and possessing a strong instinct for online value exchange.
It’s thus no surprise that communities rooted in the internet are seeking currencies that reflect their digital nature. Stablecoins represent a vital connection point — strategically positioned to accommodate this generational and behavioral evolution.
If you were around in 2000 at the age of 30, entering your credit card info on a website seemed like a gamble. Fast forward to today, where over $16 billion is transacted daily in the e-commerce sector. Trust developed through experience and time. A similar evolution is poised to occur with digital currencies. Age plays a role — and today’s younger demographic is already familiar with digital assets and how they function.
Now, let’s broaden the perspective. An estimated 75–88% of the global population belongs to what is known as the Global South: a group living outside traditional “western” countries. Regions where the banking infrastructure is lagging in comparison to internet connectivity. For instance, in sub-Saharan Africa, recent reports from Chainalysis indicate that “a sudden currency devaluation prompted increased crypto adoption…[and] many moved into crypto to counter inflation.” Coupling this necessity with a growing digitally savvy population and rapid money movement, the stablecoin proposition becomes impossible to overlook.
In the past month, I’ve traveled to Rio, Seoul, and Singapore. Although these cities are vastly different, they share a common theme: discussions around stablecoins and cross-border transactions.
The transition to a digital currency landscape is speeding up, and traditional financial institutions are officially on alert. Adapt — or face the risk of being disrupted. The architects of this change? Blockchain technology and stablecoins.
Chart of the Week
This week, we focus on Ethena’s USDe, which has seen a decline from $14 billion to $10 billion over the past 30 days. This drop directly correlates with the compression of USDe’s yield, influenced by BTC and ETH perpetual funding rates. The blended funding rate recently dipped into the negative zone multiple times but has now rebounded to a more advantageous range of 2-4%. This fundamental recovery in funding is poised to quickly restore the yield appeal of USDe, encouraging capital to flow back into the stablecoin and reversing its recent market capitalization decline.
Listen. Read. Watch. Engage.
For more insights, stay updated with the latest crypto news at coindesk.com and market updates at coindesk.com/indices.
