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
SEC Delays Decision on Multiple Spot Bitcoin ETF Applications Until October
The U.S. Securities and Exchange Commission (SEC) has postponed its decision on multiple spot Bitcoin ETF applications from entities such as BlackRock, WisdomTree, Valkyrie, Fidelity, VanEck, Bitwise, and Invesco Galaxy until October. These ETF proposals aim to provide retail investors easier access to Bitcoin without needing to buy the cryptocurrency directly.
The SEC has prolonged the comment periods to allow more public feedback, with various deadlines set for October. It has 240 days from the start of its review to finalize its decision, and traditionally, the SEC utilizes this entire duration. A recent ruling by the D.C. Circuit Court of Appeals found some of the SEC's reasons for denying Bitcoin ETF applications as "arbitrary and capricious" after Grayscale contended its rejection was without solid justification. The court noted significant similarities between Bitcoin and Bitcoin futures, suggesting that the regulator should reevaluate its stance.
US Bitcoin Corp to Host 8,500 of Celsius's Bitcoin Miners as Part of Asset Management Deal
US Bitcoin Corp (USBTC), a data center operator, will manage 8,500 Bitcoin miners with a combined hashrate of 820 petahash (PH) belonging to the bankrupt crypto lender, Celsius, at its Alpha Site. This is part of a potential deal to oversee up to 310,000 Bitcoin miners from various clients, including Celsius. In May, the Fahrenheit LLC consortium, which includes USBTC, won the bid to manage Celsius's assets, including its lending portfolio and about 122,000 mining machines.
USBTC will oversee Celsius's mining division and play a key role in setting up a 100-megawatt Bitcoin mining facility. The deal's completion awaits approval from the bankruptcy court. This collaboration signifies a significant step in the mining industry, according to USBTC president Asher Genoot. Furthermore, USBTC has finalized its merger with Bitcoin miner Hut 8 Mining Corp, leading to the creation of a new entity named Hut 8 Corp.
HashKey Capital's $100 Million Digital Asset Fund Targets Altcoin Investments
HashKey Capital, a digital assets financial services company, has launched a Hong Kong-regulated fund aiming to invest predominantly in altcoins, as reported by Reuters. The fund, which began operations on Friday, plans to allocate less than 50% of its investments to major cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH), opting to diversify into smaller-cap digital assets.
Portfolio manager Jupiter Zheng highlighted that the fund's strategy aims to tap into the broader crypto market beyond just BTC, which represents roughly half the entire cryptocurrency market cap. Since announcing the fund last month, HashKey Capital aims to raise $100 million for digital assets investments. The initiative follows Hong Kong's recent establishment of a regulatory framework for digital assets, enhancing its stature as a global crypto hub.
Trading Desk Insights
Stock futures are trading higher on Friday morning after a seesaw trading session at the end of August. Notably, the U.S. job market outperformed expectations last month, underscoring its robustness even amid the headwinds of Federal Reserve's rate adjustments. The nonfarm payroll numbers revealed an addition of a seasonally adjusted 187,000 jobs, surpassing the projected 170,000. On the flip side, the unemployment rate edged up to 3.8%, a notch above the anticipated 3.5%, marking its highest since February 2022 and presenting a notable rise from July's metrics.
Bitcoin dropped yesterday by around 6% from 27,300 to a session low of 25,650 as one of the top exchanges received an influx of around 6,000 BTC. This move was coupled with the largest influx of Bitcoin to exchanges witnessed in 2023. BTCUSDT is trading back in its previous trading range and is supported by the 25,650 mark. We expect a rebound towards 26,300 and possibly 26,825.
In a trading update, the SEC has chosen to postpone the decision on the spot Bitcoin ETF applications from esteemed financial institutions including BlackRock, WisdomTree, Invesco Galaxy, Wise Origin, VanEck, Bitwise, and Valkyrie Digital Assets. These applicants are keen to introduce the first-ever spot Bitcoin ETF, a move that many believe would simplify retail participation in the Bitcoin market, eliminating the complexities of individual wallet setups or direct Bitcoin purchases. Per regulatory protocol, the SEC has up to 240 days from the initiation of its review process to render a final verdict. Historically, the SEC often utilizes the full extent of the allotted comment and review windows, thus making this recent delay in line with anticipated timelines.
Finally, HashKey Capital's $100M digital asset fund is expected to invest significantly in altcoins with less than half in Bitcoin (BTC) and Ether (ETH), in the aim of diversifying allocations to smaller cap assets.
Economic calendar:
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- N/A
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- US S&P Home Price Index
- US JOLTS Job Openings
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- US ADP Non-Farm Employment
- US prelim GDP
- China manufacturing + services PMI
THURSDAY
- EU flash CPI
- US Core PCE
- US unemployment claims
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- CAD GDP
- US nonfarm payrolls
- US unemployment rate
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Technical Charts
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