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The market continues its eerie silence as we navigate through this period of sideways action. It almost feels like the calm before the storm, with everyone waiting for the end of September to bring some much-needed movement. It reminds me of that Green Day song, where we’re all just waiting for something to happen.

There’s a palpable sense of hesitation in the air; it seems like everyone is waiting for someone else to make the first move that could break us out of this monotonous phase. The market’s current state is, quite frankly, boring at times.

Earlier this week, PitchBook’s Robert Le mentioned that various projects are preparing for token launches but are strategically waiting for the right moment. This sentiment could very well apply to the entire sector at the moment.

But what exactly are we waiting for? That’s the million-dollar question. There are probably several factors at play, but price action seems to be the most straightforward one to analyze.

I’ve been hearing a lot of bullish forecasts for the end of this year, possibly after the elections. Now, we’re starting to see data that supports these optimistic outlooks.

Interestingly, while CME’s future premiums are approaching their yearly lows, offshore traders continue to exhibit bearish sentiments, as noted by K33 analysts.

However, there’s a silver lining hidden in this bearish perpetual sentiment. Analysts Vetle Lunde and David Zimmerman highlighted that “the persistent bearish perp sentiment has led 30-day average funding rates to dip into negative territory for the seventh time since January 2018. Our small sample of similar environments suggests a compelling case for aggressive exposure in BTC in the coming months.”

There’s a recurring pattern where monthly funding rates hit rock bottom. While that might sound discouraging, it actually sets the stage for a significant rebound.

Historically, after hitting these lows, “the subsequent average 90-day returns have been a staggering 79%, with median 90-day returns at 55%,” based on data going back to 2018.

In addition to current market drivers like bitcoin’s strong correlation with the S&P 500 (now at a 23-month high), another upcoming event to watch is the FTX repayments.

Having already dealt with Mt. Gox repayments and their impact, the market now faces another significant bankruptcy resolution. This could be a game-changer.

These elements, combined with a potential Fed pivot, the U.S. election, seasonal trends, and delayed halving effects, “support our bullish end-of-the-year thesis,” according to K33 analysts.

The resolution of the FTX bankruptcy and subsequent repayments could start unfolding as early as October 7th when the confirmation hearing is scheduled. If things go smoothly, repayments might begin before year-end.

K33 predicts that “among the remaining creditors, we expect that 20-40% of the payouts will be redeposited into crypto markets, given FTX’s user base comprised aggressive crypto-native risk-takers.”

Perhaps this will be the catalyst we need to invigorate this sluggish market. Or maybe everyone really is just holding out until September ends. We have less than three weeks to find out.

— Katherine Ross

Cryptocurrency hasn’t seen significant gains in quite some time, leading some to wonder: Are we nearing another bear market?

But don’t tell that to Base. It’s setting new records for transaction counts and unique active addresses almost daily—recording over four million transactions per day from more than one million unique addresses right now.

While these metrics can be inflated by Sybil bots and other manipulations, volumes on Base DEXs like Aerodrome and Uniswap remain steady, even as other blockchain networks see declines.

The chart below illustrates this: The blue line represents weekly transaction counts for Base, while the orange line shows combined counts for rival networks Arbitrum, Optimism, and ZKSync. Notice how Base surged after Ethereum blobs were introduced with the Dencun hard fork in March.

Blobs provided layer-2 solutions like Base their own specialized fee market, reducing competition with regular users for block space. This change has dramatically lowered median L2 fees to mere fractions of a cent and has turned ETH into an inflationary asset once again.

Despite record-high usage, this hasn’t translated into increased profits for Base’s operator, Coinbase.

According to Blockworks Research data, Base generated $5.6 million in average weekly profit in the four weeks following blob activation in March. In contrast, over the past four weeks, Base has averaged only $407,000 in weekly profit—a reduction of over 90%.

This discrepancy shows that while on-chain activity has surged by more than 80%, profits have significantly declined. (Profits for Base and other networks like Arbitrum, Optimism, and ZKSync are indicated by columns in the background of the chart.)

It’s uncertain whether these transactions would have occurred on Base or anywhere else had fees not been slashed so drastically. Cheap fees may make operating a layer-2 network less lucrative, especially for companies focused solely on the network itself.

Nevertheless, any profit is still a win. Blobs have significantly reduced Base’s operating expenses—posting data to Ethereum mainnet cost Base under $11,000 last month, down from $3.8 million in February.

For perspective, Coinbase made $36.15 million in profit overall in the second quarter of this year.

Since its launch last June, Base has brought in a $53.63 million profit for Coinbase, averaging $11.5 million per quarter—not too shabby even with blobs.

The future of the crypto space could be significantly influenced by whoever occupies the White House next January—positively or negatively.

So far, neither side has proposed concrete policies regarding crypto, digital assets, or blockchain—just soundbites from Trump and vague industry outreach from Harris. Trump has been more openly agreeable towards crypto.

I’m still hopeful that we’ll see some real crypto policies emerge from both political camps in the next seven weeks or so.

It would be disappointing if we had to wait until after the election to truly understand what lies ahead for crypto. Let’s hope that isn’t the case.

— David Canellis

Although neither candidate focused extensively on the economy during their debates, there was a moment when Harris expressed her desire for the U.S. to “win the race on AI and quantum computing.” While there’s no direct race for crypto per se, it was one of those rare moments when crypto could have come up naturally—but it didn’t.

Don’t get me wrong; I’m not surprised. Regardless of political affiliations, this debate was less about policy and more about who could deliver the best one-liners.

And honestly, I’m somewhat relieved it wasn’t brought up. Yes, we need clarity on each candidate’s stance on the crypto industry, but last night’s debate would have treated it more like a hot potato than a serious issue.

— Katherine Ross

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