Markets Insights
Economic Calendar
Next FOMC meeting: Dec 13th 2023
- Probability of a 25bps ease → 0%
- Probability of a 0bps hike → 100%
The News Room
ARK 21Shares Bitcoin ETF Amends Filing to Provide Indirect Bitcoin Exposure
The ARK 21Shares Bitcoin ETF has amended its S-1 filing to indicate a shift from providing direct to indirect Bitcoin exposure, signaling a strategic realignment in the presentation of its cryptocurrency investment product. This move, possibly in response to regulatory nuances, suggests a closer alignment to the structure of the Grayscale Bitcoin Trust (GBTC), although GBTC holds Bitcoin directly and trades at varying premiums or discounts, unlike the proposed ARK 21Shares Bitcoin ETF which tracks an index and offers indirect exposure through financial instruments. This change comes amidst the SEC's preference for cash creations in ETFs, a stance that may necessitate other ETF filers to adapt their strategies. ARK's adjustment, which includes an 80 basis points fee and new risk disclosures, reflects a maturing approach to crypto ETF offerings and highlights the evolving dialogue between regulatory bodies and financial institutions in the crypto ETF space.
Osaka Digital Exchange to Start Security Token Trading Platform
The Osaka Digital Exchange (ODX), a joint venture of major Japanese financial institutions including SBI Holdings and Sumitomo Mitsui Financial Group (SMFG), is launching a new digital securities trading platform on December 25. ODX, which was established with the aim of creating a digital stock exchange, has obtained regulatory approval for its Start trading system designed for security tokens. The exchange will see an initial issuance of around 3 billion yen ($20 million) worth of tokenized securities by real estate firm Ichigo Owners. These securities will be invested in six residential properties with the goal of offering convenient access to city centers and are anticipated to be the largest security token issuance by Ichigo Group to date. The tokens will be issued using Progmat, a digital asset management platform.
Tether Freezes $225M Linked to Human Trafficking Syndicate Amid DOJ Investigation
The issuer of the USDT stablecoin, Tether, has frozen $225 million worth of its stablecoin in cooperation with an investigation by the U.S. Department of Justice (DOJ) into a human trafficking ring in Southeast Asia. Utilizing blockchain analytics from Chainalysis, this action represents the largest freeze of stablecoin assets to date. The freeze affected 37 wallets, with the majority of the USDT previously moved to the crypto exchange OKX, which also participated in the investigation. The criminal activities were connected to the so-called "pig butchering" scam, which has significantly impacted U.S. citizens. Tether assured that the frozen funds were in self-custody wallets and were not owned by Tether's customers. The company emphasized its commitment to setting high safety standards in the cryptocurrency industry through proactive law enforcement engagement and transparency. Tether took similar action last month, freezing addresses linked to terrorism and conflict in Ukraine and Israel.
Trading Desk Insights
On Tuesday morning, the stock market experienced a decline as traders analyzed disappointing retail performance and anticipated the release of the Federal Reserve meeting minutes. This comes on the heels of a robust session on Wall Street, during which both the S&P 500 and Nasdaq recorded their fifth consecutive days of gains. Notably, technology stocks exhibited strong performance, leading the broader market indices upward.
The eagerly awaited Federal Reserve meeting minutes from the October 31st to November 1st gathering are scheduled for release at 2pm EST. Traders are eager to gain insights into the central bank's interest rate decisions, especially after the Fed maintained its benchmark rate at a range of 5.25% to 5.5%. Market participants are keen to discern any potential shifts in the Fed's stance going forward. Presently, Fed funds futures pricing indicates a strong consensus that the Federal Open Market Committee will maintain a stable stance at its forthcoming December meeting.
Meanwhile, Bitcoin continues to trade within the range it has established since October 24th, exerting upward pressure on prices. In contrast, altcoins have taken a breather recently, while ETH continues to exhibit choppy trading behavior within the 1,900 to 2,140 range. Notably, the ETHBTC pair has remained relatively flat despite a recent retracement.
In other cryptocurrency-related developments making headlines today:
- The SEC has accused Kraken of operating an unregistered platform and mishandling customer funds.
- Bittrex Global, a well-known cryptocurrency exchange, has announced its decision to cease all trading operations on their trading platform as of December 4th. This decision follows the bankruptcy filing and cessation of operations by its U.S. arm several months ago.
- The CEO of Binance intends to step down and plead guilty to violations of U.S. anti-money laundering regulations. This agreement is expected to allow Zhao to retain majority ownership of Binance, although he will not hold an executive role within the company. Additionally, Binance has agreed to pay fines totaling $4.3 billion to resolve the matter.
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.
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.
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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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