Anthropic Goes to Market

Digital assets sold off across the board last week, except for BNB which finished up over 2%. BTC lost 2.4%, while ETH and HYPE both 3.3%. That means its been three weeks of almost nothing happening in crypto while broader markets have been quite exciting, so much for “Uptober” aye. BTC is actually on track for another red October, that would be the first time that’s happened in consecutive years since 2011/12.

Digital assets aren’t alone though, Gold is also bucking a trend as it languishes. The original safe haven asset fell 4.4% and dragged the rest of the precious complex down with it, silver 6.0%, palladium 6.7% and platinum 5.6%. Despite the ongoing conflicts in EasternEurope and the Gulf, the safe haven trade just hasn’t caught a bid recently. Meanwhile Brent was up 5.0% to $110.62.

Meta lost 10.0% after reporting earnings last week and CoreWeave dropped nearly 14%, though Taiwan Semiconductor rose 1.0% and Micron added 0.9%, which is a split in the AI trade we haven't seen before.

Thursday October 22nd did most of the damage. Almost everything fell that day and only four things didn't, Brent +2.4%, long Treasuries +1.8%, Apple +1.4% and WTI +1.3%. That is the war trade on one side and the rest of the market on the other.

Spot trading volume across the six majors came to $39.5bn against $43.5bn the week before, a decline of 9.3%. Basically all of that came out from less interest in alts. BTC volume fell 3.6, but everything else fell 16.3%, so BTC actually increased its share of volume to just under 60% from 55.7%. SOL lost a quarter of its volume week-on-week.

Perhaps unsurprisingly, as alts and more long-tail assets are quite popular with retail traders on there, Binance was down 12.4%, Kraken 17.6% and OKX 17.4%. At the same time Bybit added 3.3% and Coinbase was close to flat at 2.1% lower. BNB was the only major to gain on both price and volume, up 2.1% and 8.3%, however, that’s off a base small enough that it barely registers on the chart.

Money leaving the alts and sitting in BTC is what risk-off looks like from inside crypto, and it fits a week in where alts also led the price declines. Worth watching whether that share keeps climbing, as its usually a bad sign for trend followers.

Anthropic’s IPO filing (or S-1 filing to be precise) hit the wires at 9am New York time on Monday, and the first market to react was Binance, where its Anthropic perp has been quoting an implied valuation in billions of dollars since June.

Buyers pushed the perp up about $50 in the five minutes after the filing, sellers took it from $1,972 down to $1,845 in the five minutes after that, and by 10am it was back where it had sat all morning. $7m went through in that one bar, nearly as much as the contract did all of Saturday, and it didn’t change the valuation. Over the two days around the filing the perp took $3m more selling than buying on $42m traded and still finished up, and if you traded during the filing hour you paid about three times the spread you could see on screen. On Saturday the screen was right.

The 45 minutes before the filing caught my eye though. From 8:15am the perp climbed over 1% on ten times the morning’s volume and sat there until the news came out, which is the sort of move that makes you wonder if someone knew.

Trade.xyz launched its Anthropic pre-IPO contract about an hour after the filing, priced per share with a $138 reference. It held around $138 for five minutes before hitting $109 inside forty minutes, and spent the rest of the afternoon moving between $110 and $115. About 33% of the day’s volume took place in the first half hour, while open interest kept climbing as volume dried up.

The order book is thin and it got thinner throughout the day. After the initial launch there was around $100k of bids against $14k of asks, by evening both sides were around $15k. The oracle for this is just a moving average of the contract’s own book, so once trading slowed down funding went to zero. Until there’s a listing, a perp that prices off itself is a sentiment gauge and not much more, its basically leverage on a event contract.

Speaking of which, prediction markets are betting on a date of the IPO as well as pricing the launch. Kalshi’s contract on an announcement before December was around 69 cents on Monday, and its before-November contract was at 2 cents. Polymarket’s IPO-by-November market jumped to 90% the same day, but the two are venues are not really the pricing same thing. An IPO by November needs an announcement before December, so 90% probability on Polymarket against 69% on Kalshi are fundamentally different and shouldn’t be compared.

The three markets are measuring different things though. Binance is pricing the whole company, while trade.xyz prices a share, and Kalshi and Polymarket price a date. The S-1 leaves the share count blank, but it gives us enough to work one out. There were about 11 billion shares at the end of June once the preferred convert, and close to 17 billion if you count everything, options, the Amazon notes and the 5% that went to the public benefit fund. The 17 billion is the one the private market uses, because Series H at $58.90 a share on that count is a shade under $1 trillion, which is what Bloomberg reported the round at.

On 17 billion shares, trade.xyz’s $138 launch price valued Anthropic at $2.3 trillion, the $109 low at $1.85 trillion, and the $114 or so it settled at just under $2 trillion. Binance’s contract works out at $110 a share. So trade.xyz listed 25% above where Binance had the company and the market pulled it to within 5% in four hours.

If you use the smaller share count instead, the one that’ll actually show up on a terminal, $114 a share is only worth about $1.3 trillion, and Polymarket gives basically no odds to anything that low. So either the prediction markets are thinking in fully diluted numbers or the trade.xyz contract is cheap, probably the former. We won’t know which until Anthropic fills in the share count. Nothing here has a proper anchor yet, but the markets have at least found each other, and to be honest I didn’t expect a pre-IPO perp to manage that on day one.

The Fed meets on Wednesday with the statement and the press conference carrying all the weight on their own. Unch is priced at 94.5% on Polymarket this morning, with CME’s FedWatch around 90%. December is what really matters though, a 25 basis point hike there is priced at 75% and that meeting comes with a dot plot. Microsoft and Alphabet report after Wednesday’s close too, with Amazon on Thursday, so we’ll know by Friday whether the market is still paying the sellers of compute and punishing the buyers.

The midterms are eight days out, so last week’s call that prediction market money shows up in the first days of November gets tested next week, and Apple reports the day before the vote. For crypto there’s still nothing scheduled, five weeks running now, so the only date worth watching is the one in the spotlight.