Markets Insights
Next FOMC meeting: Sept 20th 2023.
- Probability of a 0bps hike → 80.5%
- Probability of a 25bps hike → 19.5%
The News Room
Hashdex Seeks SEC Approval for Bitcoin ETF with Unique Approach
Latin America's top crypto asset manager, Hashdex, is seeking SEC approval for a Bitcoin ETF, taking a different approach from other applicants. While many firms, inspired by BlackRock's application, have proposed surveillance-sharing agreements with Coinbase to monitor potential fraud, Hashdex intends to acquire spot Bitcoin from the regulated CME market via its existing Bitcoin futures ETF.
Hashdex suggests using the Exchange for Physical (EFP) Transactions for acquiring spot Bitcoin, rather than relying on unregulated spot exchanges, potentially offering regulators more assurance by tracking prices within a strictly regulated environment. Despite other institutions like Valkyrie, Wise Origin, and ARK 21Shares opting for the surveillance-sharing agreement route, Hashdex believes their method better addresses the SEC's concerns about market manipulation.
Robinhood Emerges as Third-Largest Bitcoin Holder with Over $3 Billion in BTC
Robinhood, the trading platform, holds over $3 billion in Bitcoin, making it the third-largest BTC holder after Binance and Bitfinex, as per data from Arkham Intelligence. The mysterious owner of this large Bitcoin wallet had previously caused speculation in the market. While some believed it could belong to BlackRock, others thought it might be crypto exchange Gemini.
Robinhood moved around 118,300 Bitcoin into this wallet over three months, and Jump Trading is the custodian of these tokens. Despite such a significant Bitcoin holding, Robinhood's crypto trading volume remains relatively low, with its Q2 crypto trading revenue standing at $31 million, a drop from Q1's $38 million.
Hong Kong's Bond Tokenization Efforts Deliver Significant Operational Improvements
In a recent report, the Hong Kong Monetary Authority (HKMA) highlighted the potential benefits of blockchain-based bonds, noting substantial operational improvements in the bond market. Under the "Project Evergreen" initiative, HKMA issued HK$800 million in blockchain-based green bonds, utilizing distributed ledger technology (DLT) for issuance and trading. This digital approach simplifies traditional bond processes, offering a unified platform for all parties and ensuring a consistent, tamper-proof record. Despite the promise, HKMA recognized the tokenization of financial assets like bonds is still nascent, facing challenges such as interoperability and the need for regulatory refinement. The HKMA noted that parts of the bond issuance process are still paper-based and called for an overhaul of established systems and regulatory fine-tuning.
Trading Desk Insights
Stock futures are on the rise as we commence the concluding trading week of a turbulent August. Since the onset of August, the S&P has declined by 4%, and the Nasdaq has shed approximately 5.3%.
Addressing attendees at the annual Jackson Hole central bank conference last Friday, Powell highlighted persistent economic growth and robust consumer expenditure. However, he emphasized a cautious approach by the central bank concerning future rate hikes. “Although inflation has moved down from its peak [...] it remains too high,” “We are prepared to raise rates further if appropriate, and intend to hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective.”
As of this Monday morning, investors anticipate nearly a 20% likelihood of the Fed introducing another rate hike in their upcoming September.
On the economic agenda this week, market players will be closely monitoring the Fed's favored inflation metric, the personal consumption expenditure index, due on Thursday. Subsequently, focus will shift to the new non-farm payroll statistics releasing on Friday.
Moving on with the crypto market.
BTCUSDT is trading back at its previous range between 25,725 and 26,300. After a brief pop trading as high as 26,850, prices have pulled back towards the lower bound of the previous trading range. No clear direction in sight but given how close we are from the infamous support level of $25,000, it seems to be a higher risk-reward play to consider the long side with a tight stop below this recent trading range.
On Sunday evening, the 1inch Investment Fund bought a total of 6,088 ETH at the price of $1,655 for a total of $10 million. The wallet currently holds a total of $80 million worth of various digital assets.
Ethereum's daily transaction fees have descended to an 8-month trough, registering at $2.8M — the most modest daily sum since December 26th. This represents an 89% reduction from the peak of 16,720 ETH noted on May 5th. Notably, the downward trend correlates with heightened activity on Friend.tech, operating on Coinbase's L2 chain, underscoring the growing traction of scaling solutions in the market.
Based on insights from Arkham Intelligence, Robinhood (HOOD), the esteemed investing and trading platform, has consolidated a significant position in Bitcoin (BTC), with holdings exceeding $3 billion in a singular wallet over recent months. This notable accumulation positions them as the third-largest holder, trailing only the renowned crypto exchanges Binance and Bitfinex, which have assets of $6.4 billion and $4.3 billion in their respective wallets.
Economic calendar:
MONDAY
TUESDAY
- US S&P Home Price Index
- US JOLTS Job Openings
WEDNESDAY
- US ADP Non-Farm Employment
- US prelim GDP
- China manufacturing + services PMI
THURSDAY
- EU flash CPI
- US Core PCE
- US unemployment claims
FRIDAY
- CAD GDP
- US nonfarm payrolls
- US unemployment rate
- US ISM manufacturing PMI
Technical Charts
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