Markets Insights
Economic Calendar
Next FOMC meeting: Sept 20th 2023
- Probability of a 0bps hike → 99%
- Probability of a 25bps hike → 1%
The News Room
Boerse Stuttgart Digital and Munich Re to Launch Insured Cryptocurrency Staking Service in 2024
Boerse Stuttgart Digital, a subsidiary of Europe's sixth-largest stock exchange group, is gearing up to launch an insured cryptocurrency staking service in 2024. Collaborating with global reinsurance firm Munich Re, it aims to create a product to minimize slashing risks — the penalties imposed on validators in a proof-of-stake blockchain for misconduct such as breaking network rules or engaging in malicious activities. This initiative follows a trend of prominent financial institutions, including Deutsche Bank and HSBC, venturing deeper into the crypto sector to offer digital asset services. The new service will leverage a license obtained earlier this year from German financial regulator BaFin, enabling Boerse Stuttgart Digital and its clients to earn rewards on stored assets securely.
BitGo and Swan to Launch First BTC-Only Trust Company in the U.S.
BitGo and Swan have revealed plans to establish a BTC-only trust company, aiming to provide custody services exclusively for Bitcoin, separating it from the broader digital asset market. This joint effort, awaiting regulatory approval, merges BitGo's proficiency in custody with Swan's acumen in client onboarding and fraud prevention. This move will pioneer the U.S.'s first Bitcoin-centric trust company.
BitGo's CEO, Mike Belshe, emphasized the significance of differentiating exchange and custody services, mirroring traditional U.S. financial practices. While Swan has previously employed both BitGo and Fortress Trust for BTC storage, the latter's imminent acquisition by Ripple has led Swan to transition its compliance and settlement to Bakkt. The company's commitment to risk reduction is underscored by its focus on isolating Bitcoin from altcoins within its trust. The news follows the fallout from Prime Trust's receivership and its abandoned acquisition by BitGo, which later secured $100 million in funding at a $1.75 billion valuation.
Core Scientific, Celsius settle Texas mining site dispute with $45M deal
Core Scientific has settled its ongoing disputes with Celsius by agreeing to sell its Cedarvale mining location in Texas for $14 million. In addition to this, the American bitcoin miner has also dropped its claims against Celsius, totaling $31 million, bringing the combined settlement to $45 million. This resolution, which is pending court approval, emerges after extensive negotiations between the two entities. As part of the agreement, Celsius will inherit a "partially-developed, non-operational" mining site with 215 megawatts of available power and will receive the site's design plans for construction completion. This settlement comes in the wake of disputes stemming from hosting fee defaults and unpaid bills by Celsius, which led to the termination of their hosting agreement in January 2023. Core Scientific's CEO, Adam Sullivan, expressed satisfaction at the resolution and anticipates his company's emergence from restructuring later this year.
Trading Desk Insights
Equity futures edged down this Monday morning, with the market's gaze fixed on the upcoming Federal Reserve policy decision this Wednesday.
The trading community is largely expecting the Fed to maintain interest rates during this week's policy meeting. The focus for traders will be discerning the central bank's perspective on future inflation. Current data from the CME Group's FedWatch tool indicates a 99% likelihood that the Fed will maintain its current rate stance this Wednesday and a mere 34% chance for a rate hike come November.
The US 10-year yield popped higher last night towards 4.415%, the highest level since November 2007, which might place pressure on risk assets overall, especially if it continues to trade higher.
Many central banks around the world are announcing their interest rate decision this week including the US, Switzerland, England and Japan.
Bitcoin has broken out of its previous range and is aiming to reach the previous high of 28,100. It seems that the recent price action got a boost of confidence as the probability of a rate hike at this week’s meeting has fallen to 1%.
According to CoinDesk, a crypto whale traded 92,600 out-of-the-money call options for ETH worth appx $150m with strike prices of $2,200 with a December expiry and a strike price of $2,000 with an October expiry.
In other news, New York’s financial regulator wants cryptocurrency companies regulated in the state to be more transparent about how they list and delist crypto coins.
Finally, digital asset investment products saw outflows totalling US$54m last week, with outflows for 8 out of the last 9 weeks that aggregate to US$455m.
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.
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.
Contact Us
Sign up to receive more exclusive market coverage:
Start trading with Secure Digital Markets today by e-mailing:
trading@securedigitalmarkets.com