Markets Insights
Next FOMC meeting: Sept 20th 2023.
- Probability of a 0bps hike → 90.5%
- Probability of a 25bps hike → 9.5%
The News Room
Traditional Financial Institutions Make Significant Moves into Crypto Industry in Q2 2023: Genesis Trading Report
In a recent report, Genesis Trading indicated that Q2 of this year marked a significant shift in the crypto industry as traditional financial institutions made notable moves into the digital asset space. This influx of established entities was evidenced by numerous applications for bitcoin ETFs and the introduction of various new trading platforms and products.
Genesis emphasized that a comprehensive view of Q2 2023 data shows overall positive trends, even with bitcoin trading within a limited range. Additionally, the firm highlighted the ongoing regulatory challenges, stressing that without clear regulatory guidelines, financial firms might be inclined to shift their operations overseas.
SEC Seeks Appeal in Ripple Lawsuit Over XRP's Securities Status
The SEC has requested an interlocutory appeal in its ongoing lawsuit against Ripple Labs, asking Judge Analisa Torres for a pre-trial motion to potentially halt proceedings during the appeal process. The regulator disagrees with Torres’ earlier decision which determined that XRP's programmatic sales weren't securities. The SEC's request aims to preemptively address complications that may arise from the Ripple judgment in other related cases. Meanwhile, Ripple's Chief Legal Officer, Stuart Alderoty, noted that the SEC doesn't currently have the "right" to appeal, which is why they're seeking this route.
A part of the case involving allegations against executives Brad Garlinghouse and Christian Larsen about the XRP token is scheduled for a jury trial in 2024. Ripple Labs faces separate charges and hasn't been accused of aiding and abetting these specific violations.
Russia Launches Real-World Testing of Digital Ruble with 13 Banks
Russia is advancing its digital ruble initiative with real-world testing involving 13 banks, as announced by the country's central bank. Following the endorsement of the digital ruble law by President Vladimir Putin in July, Russia, impacted by severe sanctions from the U.S. and Europe due to the Ukraine invasion, sees the digital currency as a countermeasure to these financial constraints.
Olga Skorobogatova, the Bank of Russia's first deputy governor, anticipates that by 2025, both citizens and businesses can voluntarily use the central bank's digital currency. Initial testing will center on digital wallets, citizen-to-citizen transfers, QR code-enabled purchases, and basic automated transactions. The pilot will allow payments at 30 retailers across 11 Russian cities, with plans to extend participation to more citizens and businesses by year-end.
Trading Desk Insights
Markets advanced on Thursday morning following the release of an inflation data indicating a slightly subdued inflation growth compared to initial projections.
The Consumer Price Index (CPI) for July reported an annual increase of 3.2%, marginally below the anticipated 3.3%. On a monthly scale, inflation growth was pegged at 0.2%, aligning with market predictions. However, upon excluding volatile sectors such as food and energy, the core CPI for July stood at 4.7% year-on-year, notably exceeding the Federal Reserve's target of 2%.
In corporate news, over 90% of firms listed on the S&P 500 have disclosed their quarterly results, with a commendable 80% surpassing market expectations.
Bitcoin has rebounded off 28,600 and has recently traded as high as 30,260. Prices continue to trade within a falling broadening wedge pattern in place since mid-July. As much as we recently broke above this pattern, we never closed above it which is significant to report. Also, what is interesting with the recent move upwards, is that we were unable to break above the 50-day moving average, a key indicator to detect trend shifts.
In other news, the SEC is expected to appeal the XRP ruling against Ripple. The approval of the appeal could prevent the regulator and government from needing two trials.
Riot Platforms (RIOT), one of the largest publicly-traded bitcoin miners, reported mixed 2Q earnings released on Wednesday with revenue of $76.7 million, missing forecasts of $84.6 million. The firm anticipates additional consolidation within the industry. Riot shares have appreciated by over 383% this year, thanks to the robust performance of Bitcoin.
Economic calendar:
TUESDAY
- China CPI at 9:30pm EST
WEDNESDAY
- GBP, EUR & US 10-year bond auction
THURSDAY
- China new loans + money supply
- US CPI
- US Federal Budget Balance
FRIDAY
- US PPI
- US consumer sentiment and inflation expectations
Technical Charts
Altcoin Watch
The largest crypto exchange has announced that it will delist Cardano (ADA) and Polygon (MATIC) perpetual contracts. The move might have come in response to the SEC citing ADA and MATIC as securities in lawsuits against Binance and Coinbase.
Let’s take a look at a daily chart of MATICUSDT.
Prices have come down over 67% since the yearly highs posted in February around $1.57. Since then, prices have been trading within a declining trend channel. We haven’t been able to break above the previous pivot highs.
If prices break above 0.74 it might signal a potential trend shift. A break and close above 0.85 would be crucial for bulls to take the lead.
Disclaimer
This research is for informational use only. This is not investment advice. Other than disclosures relating to Secure Digital Markets this research is based on current public information that we consider reliable, but we do not represent it is accurate or complete, and it should not be relied on as such. The information, opinions, estimates, and forecasts contained herein are as of the date hereof and are subject to change without prior notification. We seek to update our research as appropriate.
Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation. The price of crypto assets may rise or fall because of changes in the broad market or changes in a company's financial condition, sometimes rapidly or unpredictably. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. Fluctuations in exchange rates could have adverse effects on the value or price of, or income derived from, certain investments. We and our affiliates, officers, directors, and employees, excluding equity and credit analysts, will from time to time have long or short positions in, act as principal in, and buy or sell, the securities or derivatives, if any, referred to in this research.
The information on which the analysis is based has been obtained from sources believed to be reliable such as, for example, the company’s financial statements filed with a regulator, company website, company white paper, pitchbook and any other sources. While Secure Digital Markets has obtained data, statistics, and information from sources it believes to be reliable, it does not perform an audit or seek independent verification of any of the data, statistics, and information it receives.
Unless otherwise provided in a separate agreement, Secure Digital Markets does not represent that the report contents meet all of the presentation and/or disclosure standards applicable in the jurisdiction the recipient is located. Secure Digital Markets and their officers, directors and employees shall not be responsible or liable for any trading decisions, damages or other losses resulting from, or related to, the information, data, analyses, or opinions within the report.
Crypto and/or digital currencies involve substantial risk, are speculative in nature and may not perform as expected. Many digital currency platforms are not subject to regulatory supervision, unlike regulated exchanges. Some platforms may commingle customer assets in shared accounts and provide inadequate custody, which may affect whether or how investors can withdraw their currency and/or subject them to money laundering. Digital currencies may be vulnerable to hacks and cyber fraud as well as significant volatility and price swings.
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