Rate Cuts, Meta Earnings, & OpenAI Recapitalization

Happy Halloween! Hopefully your crypto portfolio is the least spooky thing about today.

This Week in Crypto

Bitcoin started the week flying high above $116,000 on Monday, riding optimism about the FOMC meeting and renewed Trump-Xi talks. 

• However, on Wednesday, the Fed (as expected) cut rates by 25bps, but Fed Chair Jerome Powell revealed that this may be the last cut of 2025. 

• Bitcoin then dropped around 7% over the next 48 hours, falling to below $108K by Thursday. 

• ETH, XRP, SOL, and DOGE all also dropped 5-7% in 24 hours.

• As of today, BTC is trading around $109K.

After weeks of solid inflows, the ETF party came to an end.

• Bitcoin spot ETFs recorded $600M in weekly net outflows.

• Bitcoin wasn’t alone - Ethereum spot ETFs posted $81.4M in outflows just on Wednesday. 

And an assortment of crypto news:

• Binance rolled out QR-based crypto payments in Argentina, allowing users to pay for goods instantly and fee-free by scanning merchant QR codes within the app.

• Western Union announced plans to launch a U.S. dollar-backed stablecoin on Solana.

• And market-making firm Virtu Financial disclosed significant XRP holdings, signaling growing institutional integration.

This Week in TradFi

All about rate cuts this week:

• On Wednesday, the Fed cut rates by 25bps as expected, bringing the Fed funds rate to 3.75%-4.0%. 

• Markets initially popped off, with the Dow hitting a record high and the S&P 500 in the green.

• However, Fed Chair Powell then said that it’s possible (maybe even likely?) that this is the last rate cut of the year. More specifically, he said that a December rate cut is “not a foregone conclusion.” 

• The Dow immediately reversed course - closing down 74 points. The 10-year Treasury yield rose above 4%, and more rate-sensitive stocks like Costco, McDonalds, Visa, and Mastercard all fell.

On the international front:

• President Trump and President Xi met on Thursday in South Korea and announced a one-year trade truce. 

  • The U.S. will cut fentanyl-related tariffs on China from 47% to 10%, and China agreed to delay rare earth export curbs for a year and start buying American soybeans again. 

  • Semiconductors weren’t part of the deal, sending Nvidia stock down 2%. 

• Hong Kong’s economy expanded in Q3 by a faster-than-expected 3.8% YoY, growing for an 11th consecutive quarter. 

• Gold pulled back from recent highs after Powell’s comments, trading around $4,016/oz on Friday after hitting $4,381 on October 20.

  • Gold is still up 52% YTD and on track for its strongest annual performance since 1979. 

This Week in Tech

Some big tech highlights from this week:

• Meta reported solid Q3 earnings on Wednesday, with an adjusted earnings per share (EPS) of $7.25 vs. expectations of $6.69. 

  • Revenue came in at $51.24B, vs. $49.41B expected.

  • However, Meta stock dropped 11% on Thursday, in its worst single-day loss since October 2022. 

  • This was due to two reasons - a $16B one-time tax charge related to the Trump Administration’s budget bill, and Meta raised its 2025 capex guidance from $66-72B to $70-72B. 

• Nvidia’s market cap hit $5T this week - the equivalent of around 25 Disneys, 50 Nikes, 900 Macy’s, and more than double the entire market indexes of France and Germany combined. 

  • Stock rose nearly 3% on Wednesday, closing at record highs - propping up the tech-heavy Nasdaq while many other tech stocks struggled. 

On Tuesday, OpenAI announced that it had completed its recapitalization, splitting the AI lab into a for-profit corporation nested inside a nonprofit foundation. 

• Under the new structure, the nonprofit OpenAI foundation will have legal control over a public benefit corporation called OpenAI Group, which can raise funding or acquire companies without legal restraint. 

• The OpenAI foundation will own 26% of the for-profit, with a warrant for additional shares if the company continues to grow. Microsoft will hold around a 27% stake, valued at $135B, and the remaining 47% will be held by investors and employees. 

As usual, below are some fundraising announcements, M&A, and tech personnel changes that caught our eye:

• Bevel has raised a $10M Series A to scale its AI health companion.

• Figma has acquired AI-powered media generation company Weavy. 

• The Prompting Company, which helps products get mentioned in AI apps, has raised a $6.5M seed round. 

Arch is building a next-gen wealth management platform for individuals holding Alternative Assets. Our flagship product is the crypto-backed loan, which allows you to securely and affordably borrow against your crypto.

Disclaimer: None of the above is financial advice, seriously.