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Direxion and ProShares File for ETFs Combining Bitcoin and Ether Futures Contracts
Direxion and ProShares have filed applications with the US Securities and Exchange Commission (SEC) for ETFs that would hold futures contracts tied to both Bitcoin and Ethereum. This move comes after several fund groups, including ProShares, recently filed for funds focusing solely on Ethereum futures.
In 2021, the SEC permitted ETFs holding Bitcoin futures contracts, with the first, ProShares Bitcoin Strategy ETF (BITO), gaining $1 billion in assets under management within days of launch. Despite the SEC's history of rejecting spot Bitcoin ETFs, fund issuers continue to look for alternative methods to offer investors crypto exposure.
Hong Kong Opens Cryptocurrency Trading to Retail Investors with New Licenses to HashKey Exchange and OSL Digital Securities
Hong Kong has officially opened cryptocurrency trading to retail investors, granting its first licenses under a new regime to HashKey Exchange and OSL Digital Securities Ltd. Both entities previously had licenses from Hong Kong's opt-in licensing regime for crypto asset service providers, likely expediting their new approvals.
The HashKey Exchange can now expand its business from serving professional investors to retail users. Similarly, OSL Digital Securities now allows retail investors to register on its platform and access digital asset products, starting with Bitcoin (BTC) and Ethereum (ETH). The move indicates Hong Kong's growing interest in re-establishing itself as a hub for cryptocurrency trading and financial services.
Kenyan Government Halts Worldcoin Operations Over Public Safety and Data Privacy Concerns
Worldcoin's operations in Kenya have been temporarily halted by the government due to public safety concerns and financial integrity. The country's Interior Cabinet Secretary announced that Worldcoin activities will remain suspended until public agencies can confirm there are no risks to the general public.
Worldcoin requires users to undergo iris scans to obtain a digital ID (World ID) for its "proof of personhood" verification services, which has been met with controversy regarding the handling of sensitive biometric data. In light of these concerns, the UK's Information Commissioner's Office, Germany's data authority, and France's privacy watchdog have launched their own investigations into Worldcoin. The company intends to work with local officials to increase understanding of their privacy measures during this pause in services.
Trading Desk Insights
On Thursday, stock futures experienced a decline following the significant selloff on Wednesday, which was triggered by Fitch's downgrade of the U.S. Wall Street has also been evaluating the most recent collection of quarterly results to gain insight into the current state of corporate America.
There were noteworthy downturns in the tech industry, with chipmaker Qualcomm suffering a 9% loss after failing to meet revenue expectations for the third quarter and providing lackluster guidance. Meanwhile, PayPal saw a similar 9% slump despite meeting expectations with its financial results. Two tech heavyweights, Apple and Amazon, are scheduled to release their financial reports after market close.
In other financial developments, the Bank of England took a step to curb inflation by increasing interest rates by 25 basis points early today. This is part of a broader trend of actions taken by global central banks in response to inflationary pressures.
Moving on with the cryptocurrency market, BTCUSDT is trading back in the previous trading range with most of the price action taking place between 28,800 and 29,700. If the equity market continues to slide lower, this may continue to place additional pressure in the overall cryptocurrency market. We are currently trading below the 50-day moving average which isn’t ideal for bulls to take control.
If we zoom out to the daily chart, we can see that it’s very possible for BTC to continue lower towards the rising trend line that has lifted prices since the start of the year, acting as great support. This area also intersects with the 200-day moving average, thus reinforcing its psychological importance.
According to a study by K33 Research, the five-day volatility of Bitcoin is currently lower than that of prominent conventional assets, including the Nasdaq, S&P 500, and Gold. As we have previously reported, this volatility has declined to historically low levels. It's a characteristic of volatility to tighten before widening again, implying it's highly unlikely these reduced levels will persist for a significant duration. As a result, we are led to anticipate that a major market catalyst will emerge in the ensuing few months, which would reinvigorate this volatility.
Economic Calendar:
THURSDAY
BOE decision
US unemployment + ISM services PMI
Earnings → Amazon, Apple, Block & Coinbase
FRIDAY
US Non-farm payrolls + unemployment
Technical Charts
Altcoins
According to a report by CCData, there was a notable increase in July in the assets under management (AUM) of investment funds connected to Stellar’s XLM, Ripple’s XRP, and Solana’s SOL. This surge in AUM is reportedly tied to a ruling that determined XRP tokens held on exchanges did not equate to investment contracts. This decision triggered significant price spikes across the cryptocurrency industry, with XRP and other altcoins, including XLM and SOL, experiencing substantial gains.
The AUM for XLM-oriented products saw a remarkable rise of 62.7%, reaching $17.3 million. Meanwhile, XRP-focused products saw their AUM rise by 33.2% in July, amounting to $65.7 million, and AUM of SOL-related products surged by 55.7% to $87.8 million.
Stellar’s XLM, in particular, has seen a positive trend over the past month, fuelled by the progression of its partnership with Circle's USDC and strategic alliances with entities like MoneyGram.
From a technical perspective, XLMUSDT surged by 100% after the positive news from the XRP ruling. Since then, both XRP and XLM have been pulling back. It seems that XLM will continue its trend lower towards the breakout area. The first target would be 0.128. If prices continue lower then we would be looking at the next targets of 0.112 and 0.096 in extension.
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.
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