Markets Insights
Economic Calendar
Next FOMC meeting: Dec 13th 2023
- Probability of a 25bps ease → 1%
- Probability of a 0bps hike → 99%
The News Room
MicroStrategy Purchased $600M of BTC in November, Increased Holdings by 10%
In November, MicroStrategy (MSTR), the largest corporate holder of Bitcoin (BTC), significantly increased its Bitcoin holdings by acquiring an additional 16,130 BTC for approximately $608 million. This purchase was made at an average price of about $36,785 per Bitcoin, as reported in a recent regulatory filing. MicroStrategy's total BTC holdings now stand at 174,530, bought at an average price of around $30,252 each. This move marks a notable uptick in the firm's Bitcoin acquisition strategy, having held 158,400 BTC at the end of October, representing over a 10% increase in holdings within a month. Additionally, MicroStrategy has entered into an agreement with financial institutions including Cowen and Company, Canaccord Genuity, and BTIG, to potentially offer up to $750 million in class A common stock.
World's Largest Bitcoin Futures ETF Breaks 2021 Record Highs for Assets Under Management
ProShares' Bitcoin Strategy ETF (BITO), a Bitcoin futures fund in the U.S., reached a record high of $1.47 billion in assets under management (AUM), surpassing its previous peak in December 2021. This growth reflects a renewed interest from institutional investors in Bitcoin, as evidenced by a surge in Bitcoin spot ETF applications filed in the U.S. BITO, traded on the Chicago Mercantile Exchange, offers regulated exposure to Bitcoin-linked returns.
Simeon Hyman, ProShares' Global Investment Strategist, highlighted BITO's strong investor demand and its position in the top 5% of U.S. ETFs by average daily trading volume. BITO's appeal is partly due to its close tracking of Bitcoin's spot prices. In June, the fund saw its largest inflow in a year, with more than $65 million in a single week. The overall rally in Bitcoin prices has been further fueled by anticipation of U.S. regulatory approval for Bitcoin spot ETF offerings by major investment firms such as BlackRock and Fidelity.
Institutional Crypto Trading Platform Talos Taps Into Uniswap's Liquidity
Talos, a crypto trading platform primarily serving institutional clients, is expanding its services to include liquidity from Uniswap, a leading decentralized finance (DeFi) platform. This marks Talos's first venture into sourcing liquidity from a decentralized exchange and represents Uniswap Labs' first enterprise API (Application Programming Interface) integration. An API facilitates the exchange of information between computers. Talos CEO Anton Katz highlighted that this integration will offer their institutional clients access to a broader and deeper pool of liquidity, including exposure to various projects and protocols unique to Uniswap.
Trading Desk Insights
In the world of trading, equity futures saw a modest decline on Friday morning, leveling off after reaching a new high for the year in 2023 and concluding their most successful month in well over a year. The previous day marked the end of a remarkable November, breaking a three-month streak of losses for stocks. The S&P and Nasdaq indices surged by 8.9% and 10.7%, respectively, marking their strongest monthly performance since July 2022. Advisers on Wall Street are cautioning investors to remain vigilant as we approach the end of the year and look ahead to 2024.
Traders were eagerly awaiting Federal Reserve Chair Jerome Powell's remarks later in the day. Powell was scheduled to engage in a fireside chat at Spelman College at 11 a.m. ET. The substantial rally in November was partially attributed to traders beginning to believe that the Federal Reserve had finished raising interest rates and might even consider cutting them in the first half of the upcoming year. The next interest rate decision from the Fed is set for December 13th.
Meanwhile, Bitcoin experienced a slight upward push this morning, reaching its highest level of the year at $38,850. Although trading volume has increased slightly, it has not reached significant levels, similar to the liquidations seen in the past 24 hours. Open interest surged since 3 a.m. EST but has since plateaued. The increased activity in the futures market compared to the spot market suggests that the recent price surge may not be sustainable in the short-term.
Since November 17th, a remarkable $1.4 billion worth of Bitcoin has been withdrawn from exchanges, indicating a bullish sentiment among market participants. This could be indicative of a long-term holding strategy or a shift towards investors taking direct control of their assets following the Binance controversy.
Turning our attention to the altcoin market, the weekly trading volume of AI tokens reached its highest point in several months, surpassing $3 billion in early November. This boost was driven by improved macroeconomic conditions and positive quarterly results from chip maker Nvidia. Notably, Worldcoin (WLD) and Render (RNDR), accounted for more than half of the overall trading volume in November. Strong narratives surrounding AI, layer 1 blockchains, and gaming have propelled the growth of select altcoins, with the prices of Solana's SOL and Avalanche's AVAX more than doubling over the past two months.
Technical Charts
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.
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