As we enter the final quarter of the year, the industry has seen exciting developments in terms of price action, as well as significant developments in institutional adoption and the macro environment. Historically, September is seen as a negative month for bitcoin, but this year the flagship cryptocurrency had its best month since 2013 with a gain of over 7%. The other three times September was a positive month for bitcoin, it was followed by strong returns in the following three months. While historical price action doesn’t dictate future results, it can give an indication of what could potentially happen in the fourth quarter. 
Bitcoin monthly returns (%) Source: Coinglass
Aside from bitcoin, other Web3 projects saw significant breakouts from their downtrend in September. This price action was led by AI and tokenisation projects, with both Web3 sectors seeing double-digit gains this month. Coupled with the bullish price action, the Web3 industry has seen other significant developments with continued adoption by global banks, the FED cutting interest rates and the US political landscape turning pro-Web3. Join us in this month’s edition for a recap of the most impactful trends in the Web3 industry.
Continued Major Global Financial Institutional Developments
In September, Visa announced a significant move in the Web3 space with its Visa Tokenized Asset Platform (VTAP). This initiative is set to help banks issue fiat-backed tokens on the Ethereum network. The platform is designed to support the creation of fiat-backed tokens powered by smart contracts, facilitating the digitization and automation of existing processes to enable real-world asset exchanges. One of the earliest adopters, Spanish bank BBVA, plans to launch a live pilot by 2025. This development showcases Visa’s ongoing commitment to blockchain and the Web3 space, evident since their start of processing cryptocurrency payments in stablecoin USDC on Ethereum in March 2021. Additionally, Visa has recently partnered with Brazil’s central bank on a pilot project for a central bank digital currency (CBDC).
Furthermore, one of Germany’s largest banks, Commerzbank, has ventured into providing Web3 trading and custody services to its corporate clients in collaboration with Deutsche Börse’s subsidiary, Crypto Finance. This new service offers access to bitcoin and ether, with Commerzbank handling the digital asset custody and Crypto Finance managing trading services. This partnership, enhanced by Commerzbank’s crypto custody license from Germany’s BaFin obtained in late 2023, promises a regulatory compliant and secure trading and custody solution for digital assets.
These initiatives from global banks highlight the continued development of integrating blockchain and Web3 technologies into traditional finance. While it may take a few years for these initiatives to come to full fruition, it is undeniable that institutions around the world are integrating Web3 solutions.
FED Joins The Rest of The World in Cutting Interest Rates
On 18 September, the US Federal Reserve made a significant policy shift by cutting interest rates by 0.5%, the first reduction in four years. This policy move is expected to inject more liquidity into global markets, potentially easing financial conditions across various asset classes, including Web3 markets. For the Web3 sector, this could translate into increased capital inflows as investors seek higher returns in alternative assets beyond traditional equities and bonds. Lower interest rates generally foster a risk-on environment, making technology and innovation-driven markets such as Web3 more attractive. This environment could accelerate investment in cryptocurrencies, decentralised finance (DeFi) platforms and blockchain startups, as the lower cost of capital makes speculative and growth-oriented investments more attractive.
Political Landscape Shifts To Pro-Web3
In September, the stances of both Kamala Harris and Donald Trump on cryptocurrencies took centre stage. Harris, while not fully embracing the industry, made her first significant comments on Web3 assets, indicating that her administration would “encourage innovative technologies like AI and digital assets while protecting consumers and investors”. While this falls short of the industry’s hopes for significant regulatory change, it does signal a shift in the political mood.
On the one hand, Trump has fully embraced pro-crypto policies, proposing bold initiatives such as a US bitcoin stockpile and an advisory council to shape crypto-friendly regulations. His opposition to central bank digital currencies (CBDCs) and vocal support for bitcoin have energised Web3 advocates. Extending Trump’s enthusiasm in the Web3 space, we have seen the launch of ‘World Liberty Financial’, a decentralised financial platform backed by Donald Trump. While much remains behind the scenes, the platform has stated that its goal is “mass adoption of stable coins and decentralised finance”.
Conclusion
As we enter the final quarter of the year, the market is positioned for potential growth, with optimism surrounding “Uptober” — a month that historically delivers strong performance for the Web3 market.
However, the backdrop remains complex. Recent months have been marked by geopolitical tensions, such as the ongoing conflict in the Middle-East and strained U.S.-China relations, which have added volatility to global markets.
Despite these challenges, the outlook appears to be stabilising. After Bitcoin posted its best September since 2013, momentum is building, Institutions continue to adopt Web3 technologies, central banks, including the Fed, have turned to rate cuts in response to moderating inflation and a slowing economy, and the political landscape for Web3 is strengthening. As we move into the fourth quarter, the market is setting itself up for an exciting finish to the year.
To explore how you can navigate these developments and capitalize on emerging opportunities, contact us today and learn about the strategies available to you in this exciting market!
