Welcome to the Crypto.com Monthly Research Roundup Newsletter!
1. Market Index
In September, the price index increased by +7.60%, while the volume and volatility indices were negative at -18.93% and -20.67%, respectively.
2. Charts of the Month
Bitcoin’s price increased by 7% in September 2024, the highest recorded monthly returns in September since 2013. It recorded negative monthly returns in eight Septembers from 2013 to 2024, making it historically a ‘bad’ month for BTC.
Looking forward, October is known as ‘Uptober’ (a portmanteau of ‘up’ and ‘October’), as it’s historically associated with BTC’s strong performance in October. BTC recorded nine years of positive returns in October from 2013 to 2023, with an average return of 22.9%.
Ethereum is currently experiencing its longest inflationary period since its transition to Proof-of-Stake (PoS), with over 303,420 ETH added to the supply from mid-April to September. Due to the Dencun Upgrade in March, where EIP-4844 and other updates have helped lower burn rates as more transactions occurred on Layer 2s, there is an increase in ETH supply, therefore affecting Ethereum’s deflationary status. Its inflation rate is currently at 0.42% per year.
The NFT market experienced its sixth consecutive month of decline, with sales volume dropping by 19% month-over-month. There were mixed performances among the top chains.
Ethereum and Solana fell by 20% and 26% respectively. However, Bitcoin rose by 5%, supported by the resurgence of Ordinal NFTs. Additionally, Blast continued to see positive growth after August, thanks to Fantasy.top. Flow, a platform primarily supporting sports NFTs like ‘NBA Top Shot’ and ‘NFL All Day’, also gained traction in September with around 50% growth.
3. Monthly Feature Articles
Monthly Feature Report | AI Agent in Crypto
An AI agent is a system that can autonomously operate or perform tasks on behalf of a user or another programme. The global AI agents market is expected to grow from US$5.1 billion in 2024 to $47.1 billion by 2030, representing a 45% CAGR.
AI agents’ capabilities have expanded rapidly with the rise of generative AI and large language models (LLMs). The current landscape in crypto includes Agent Creation, Trading, Smart Wallets/Payments, Gaming, Social, Art/NFT, and Security and Privacy. Crypto.com recently released an AI Agent SDK, which processes natural language and executes instructions.
This report looks into AI agents and their applications in the cryptocurrency realm. Read AI Agents in Crypto now.
Key Takeaways:
- An AI agent is a system that can autonomously operate or perform tasks on behalf of a user or another programme. Globally, the AI agents market is expected to grow from US$5.1 billion in 2024 to $47.1 billion by 2030, representing a 45% CAGR, according to MarketsandMarkets™.
- Web3 provides a good environment for AI agents. Blockchain eliminates intermediaries from transactions through automatic execution of smart contracts and enables AI agents to process transactions on behalf of users.
- The current landscape of AI agents in crypto include Agent Creation, Trading, Smart Wallets/Payments, Gaming, Art/NFT, and Security. Amongst the listed tokens in the AI agents landscape, Artificial Superintelligence Alliance (FET) has the largest market capitalisation with $4.2 billion (at the time of writing).
- Crypto.com recently released an AI Agent SDK, which aims to empower developers — and ultimately end-users — to interact with the Cronos blockchain and other Crypto.com services by leveraging AI tools as an advanced intermediary. At the time of writing, the current version is able to handle functions like calling chain data (e.g., balance enquiry), wallet management (transfer functions), and basic smart contract interactions (swap). New capabilities will gradually be released.
- Application of AI agents in crypto is in the early stages, but we believe that in the future, AI agents’ development in crypto could evolve into a multi-agent network and intent-based interactions — where users can type in any commands, and multiple agents in the backend would work together to provide verifiable, reliable, and secure outcomes to users.
Monthly Feature Report | Pair Trading
Pair trading is a market-neutral strategy that involves taking advantage of relative price movements between two correlated assets. It has gained popularity because of the high volatility and rapid price movements characteristic of cryptocurrency markets. Traders often look for cryptocurrency pairs that exhibit a historical correlation or cointegration, such as Bitcoin (BTC) and Ether (ETH). By monitoring the price spread or price ratio of the paired tokens, traders can identify opportunities to enter long and short positions based on deviations from the expected relationship.
In this report, we demonstrate the performance of pair trading with the BTC/ETH price ratio as an example. Read Pair Trading now.
Key Takeaways:
- Pair trading is a market-neutral strategy that involves taking advantage of relative price movements between two correlated assets. By simultaneously buying one asset and selling another, traders seek to profit from the convergence or divergence of their prices.
- In this report, we demonstrate how to use a pair trading strategy to perform trading with a daily interval, with the BTC-ETH pair as the example. The trading strategy is evaluated based on the data from January 2021 to August 2024.
- The price ratio (BTC/ETH) is the tracking indicator, as it presents a mean reversion in the period.
- Buy and sell signals need to be determined for when to enter and exit trading. Z-Scores with a moving window of 30 days are calculated, and then the upper and lower thresholds of Z-Scores for trading signals are set.
- According to historical data, the strategy could generate significant positive gains when trading signals are well defined and may perform better than simply holding assets within specific time ranges.
- Pair trading strategy purely relies on historical price relationships without considering fundamental factors. Additionally, there are some limitations regarding this exploration, including the stationary assumption, lack of out-of-sample testing, market conditions, transaction costs, and risk management.
Interested to know more? Access exclusive reports by signing up as a Private member, joining our Crypto.com Exchange VIP Programme, or collecting a Loaded Lions NFT.
4. Alpha Navigator
This institutional-focused report dives into macro trends, market-neutral pairs, style-factor screens, and events. Read the full Alpha Navigator report here.
- Cryptocurrencies, equities and fixed income were all up in September and BTC led the rise.
- BTC’s price performance showed moderately positive correlations with Equities, and a weak correlation with Fixed Income.
5. Crypto Conference & Economic Calendar from Market Pulse
Crypto Conferences Calendar
Economic Calendar
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Research & Insights Team
