Markets Insights
Economic Calendar
Next FOMC meeting: Nov 1st 2023
- Probability of a 0bps hike → 72.6%
- Probability of a 25bps hike → 27.4%
The News Room
Mt. Gox Creditors' Repayment Deadline Extended to October 2024
The repayment deadline for creditors of the collapsed Bitcoin exchange Mt. Gox has been extended by a year to October 31, 2024, as per a recent letter from Rehabilitation Trustee Nobuaki Kobayashi. This move follows the passage of the previous deadline in April for creditors to furnish repayment information, with some delays attributed to the time needed for verifying provided data and coordinating with relevant financial entities. However, creditors who've already submitted the required information might begin seeing repayments as early as the end of this year, although precise timings remain uncertain and subject to change.
Mt. Gox, once the largest Bitcoin exchange, declared bankruptcy in 2014 after a massive Bitcoin loss. The exchange plans to distribute a portion of its remaining assets, including 142,000 BTC, 143,000 BCH, and 69 billion yen, though the specifics remain undisclosed. This repayment delay, confirmed amid rumors, is suspected to have contributed to a recent 5% uptick in Bitcoin's price, according to crypto trading firm QCP Capital.
Bankrupt Bitcoin Miner Core Scientific to Buy 27K Bitmain Servers for $77M
Bankrupt mining company Core Scientific has inked a deal to buy 27,000 Bitcoin mining servers from Bitmain for $23.1 million in cash and $53.9 million in stock, a move aligned with its bankruptcy recovery plan. The servers, set to arrive in Q4 2021, will boost Core Scientific's hash rate by 4.1 exahashes. This deal comes as part of Core Scientific's rebound strategy from bankruptcy, filed last December amidst falling revenues and soaring energy costs. The firm anticipates emerging from bankruptcy later this month, with crypto entity Anchorage Digital possibly acquiring equity. Bitmain's CEO expressed enthusiasm about collaborating with Core to enhance the Bitcoin network's robustness.
European Crypto Asset Manager CoinShares Expands to U.S. With New Hedge Fund Unit
Crypto asset manager CoinShares is launching a hedge fund unit for qualified U.S. investors, extending its operations beyond its European domain. Headquartered in St. Helier, Jersey, CoinShares aims to offer institutional investors actively managed digital asset portfolios. CEO Jean-Marie Mognetti views this expansion as a logical step in response to the evolving macroeconomic landscape impacted by interest rates and inflation.
Lewis Fellas, the head of the hedge fund division, expressed that the upcoming fund products aim to leverage the anticipated return of interest rate-driven volatility while minimizing counterparty risk and providing clear asset class and strategy exposures to investors. This development comes amidst a backdrop of declining interest in crypto assets among traditional hedge funds, as noted by a PwC report in July, which also highlighted a potential strategic reassessment by nearly a quarter of hedge funds due to the U.S.'s regulatory stance, with 12% contemplating a shift to more crypto-friendly jurisdictions.
Trading Desk Insights
Stock futures edged higher on Friday, yet the market sentiment remains cautious given the trajectory we've seen this week. The S&P 500 and the Nasdaq have retreated 2.7% and 3.5% for the week, marking their most pronounced weekly downturn since March and potentially culminating in their third consecutive negative week. Such dynamics can be attributed to the Federal Reserve's inclination to maintain elevated interest rates. This stance might exert pressure on equities and other risk assets.
Following the central bank's outlook, we witnessed a noticeable uptick in bond yields. Specifically, the 10-year Treasury yield surged by 15 basis points, reaching 4.498% - a high unseen since 2007. Concurrently, the 2-year rate surpassed the 5.2% threshold, a peak not touched since 2006.
Additionally, the looming threat of a government shutdown adds another layer of uncertainty, potentially weighing on consumer confidence and exerting a drag on economic momentum.
Bitcoin is trying to recover after the sudden drop caused by the Federal Reserve’s outlook on monetary policy. BTCUSDT is still trading above its support level of 26,200 which is a positive sign. If we zoom out and pay attention to the daily chart, we can see that prices have been capped by a declining trend line formed since the yearly highs and have started to pull back from its 50-day moving average.
ETH is under pressure and is looking to break its recent low posted on September 11th before reaching our support level of 1,500. This has pushed ETHBTC to trend lower towards the next support of 0.05773.
LINK is one of the only top altcoins that has been outperforming BTC in the double digits since Monday.
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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