April 18, 2024

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Next FOMC meeting: May 1st 2024

  • Probability of a 25bps ease → 2%
  • Probability of a 0bps hike → 98%

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The News Room

Tether Restructures to Diversify Beyond Stablecoins into AI, Bitcoin Mining, and Education

Tether, the company behind the USDT stablecoin, has announced a strategic reorganization to expand into broader digital asset sectors, creating four new divisions. "Tether Finance" will continue to manage the operations of the USDT stablecoin, "Tether Power" will delve into Bitcoin mining, "Tether Data" will focus on investments in emerging technologies such as artificial intelligence, and "Tether Edu" will develop educational programs. This expansion aims to shift Tether's focus from being primarily a stablecoin issuer to a more diverse company that supports sustainable financial and technological empowerment, according to CEO Paolo Ardoino. Tether's move represents its commitment to contributing to a resilient financial and tech ecosystem that promotes self-sustainability and independence.

Aptos Labs Collaborates with Microsoft and Brevan Howard to Launch 'Aptos Ascend' for Institutional DeFi Entry

Aptos Labs has announced a partnership with Microsoft, Brevan Howard, and SK Telecom to launch Aptos Ascend, a comprehensive suite designed to offer institutional solutions for entering decentralized finance (DeFi). This initiative aims to provide regulatory support, transaction privacy maintenance, and integrated KYC features, leveraging Microsoft Azure and Azure OpenAI services. The collaboration is part of a broader effort seen across various layer-1 blockchains, like Avalanche and NEAR, to connect large institutions with DeFi opportunities. Brevan Howard will contribute by exploring digital asset management opportunities for institutions, while Boston Consulting Group will assist in the implementation. Aptos Labs, established by former Meta employees, also integrates AI with blockchain technology using Microsoft's infrastructure, including the newly introduced chatbot, Aptos Assistant.

Big Four’ Accounting Giant EY Adopts Polygon PoS for Enhanced Business Contract Management

Ernst & Young has introduced a new enterprise contract management service, OpsChain Contract Manager, that allows clients to secure contracts on a public blockchain while maintaining privacy through zero-knowledge circuits. Currently running on Polygon proof-of-stake (PoS) due to its lower transaction costs, this service is marketed for Ethereum and is part of EY's broader strategy to leverage public blockchains for business applications. The firm plans to transition its zero-knowledge rollup, Nightfall, from Polygon to Ethereum mainnet and potentially to a layer-3 in its next upgrade. This initiative reflects a shift from early private blockchain solutions towards using public blockchains like Ethereum, which EY believes offer greater privacy and cost efficiency. The move is in line with broader trends in the industry as firms like BlackRock also explore Ethereum for tokenized funds, signaling growing institutional interest in blockchain technology.

Trading Desk Insights

Bitcoin exhibited a strong recovery after momentarily dipping below the critical support level of $60,000. However, remaining below the 50-day moving average suggests that the resistance level around $67,000 remains unbroken. Current market conditions show a spot premium over futures, reminiscent of previous trends when Bitcoin was trading around $40,000. This indicates a decrease in speculative trading, which is a favorable sign.

In the realm of ETFs, there has been an increase in outflows, totaling $165 million, predominantly led by Grayscale, which accounted for $133.1 million of this amount. Meanwhile, Blackrock recorded its lowest inflow at $18.1 million, as it continues to try to assert its market presence.

Base now leads the pack in terms of daily active addresses and transactions among Layer 2 solutions. In the DeFi sector, activity in Q1 2024 was primarily propelled by Solana and Base, accounting for 45% and 17% of total DeFi activities by the quarter's end, respectively.

In corporate developments, Tether is undergoing a strategic reorganization into four divisions as it broadens its scope beyond stablecoins. The newly established divisions include: Data, focusing on strategic technology investments such as artificial intelligence; Finance, overseeing the operations of the USDT stablecoin, a key player in the crypto markets with a market cap exceeding $100 billion; Power, managing investments in Bitcoin mining; and Edu, dedicated to educational initiatives.

Turning to broader financial markets, the S&P 500 experienced volatility as Wall Street sought to regain stability following consecutive losses. The Nasdaq, particularly affected by a downturn in technology stocks, declined by more than 3%, signaling a potential fourth consecutive week of losses, which would be the longest downturn since December 2022.

Overall, the stock market's recent declines can be attributed to diminished expectations for rate cuts, prompting investors to take profits following a robust performance in the first quarter of the year.

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