December 4, 2023

Markets Insights

Economic Calendar

Next FOMC meeting: Dec 13th 2023

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

The News Room

Grayscale Setting Up for Bitcoin ETF Race by Hiring Industry Veteran From Invesco

Grayscale, a leading crypto asset manager, has appointed John Hoffman, a seasoned ETF expert from Invesco, as the new Managing Director and Head of Distribution and Strategic Partnerships. This strategic hire comes six weeks before a crucial decision by the Securities and Exchange Commission (SEC) on the potential launch of a spot Bitcoin (BTC) exchange-traded-fund (ETF) by Grayscale. Hoffman, who brings over 17 years of experience from Invesco, where he notably led the Americas, ETF, and indexed strategies team, is expected to leverage his expertise to benefit Grayscale, especially in this pivotal period. Dave LaValle, Global Head of ETFs at Grayscale, expressed enthusiasm over Hoffman's addition to the team. This move occurs as Grayscale prepares for the SEC's decision on the launch of several potential spot Bitcoin ETFs, including their own, amidst a competitive landscape with major players like BlackRock and Invesco.

Standard Chartered-Backed Zodia Custody Joins Ripple-Owned Metaco’s Global Crypto Storage Network

Zodia Custody, a cryptocurrency storage provider supported by Standard Chartered, is joining Metaco's network, a Ripple-owned custody specialist, to enhance the safekeeping and settlement of digital assets for global institutions. This collaboration reflects a growing trend in the crypto industry where enhanced storage and settlement networks are being developed to mitigate counterparty risks, especially in the wake of major firm collapses like FTX. Zodia Custody CEO Julian Sawyer described this as the 'third generation of crypto custody', emphasizing the integration of multiple custodians for efficient asset management. This network allows for global sub-custody arrangements, where institutions can contract others to hold assets in different jurisdictions. For instance, a Brazilian custodian could use Zodia as a sub-custodian in the UK, leveraging their regulatory permissions. Zodia Custody, already established in the UK, Ireland, and Luxembourg, has expanded into Singapore. Concurrently, Zodia Markets, also backed by Standard Chartered, has received preliminary approval to operate as an OTC crypto broker-dealer in Abu Dhabi. Metaco, expanding its influence in the sector, has also recently partnered with HSBC for its custody technology services.

U.S. Space Force Major Proposes Bitcoin's Role in National Defense and Cybersecurity

U.S. Space Force Major Jason Lowery has introduced a novel perspective on Bitcoin, emphasizing its potential role in national defense and cybersecurity. In his letter to the Department of Defense’s Innovation Board, Lowery argued for the strategic significance of Bitcoin and proof-of-work protocols, urging exploration of their applications in military strategy. He conceptualizes Bitcoin as a "macrochip," which could transform the global electric grid into a computational resource, introducing physical costs into digital security. This approach, he suggests, could revolutionize cybersecurity and data protection, challenging existing paradigms and offering a new method to secure internet data. Lowery's insights, stemming from his expertise in national defense and digital technology, highlight the urgency for the U.S. to adapt to these technologies. He recommends the Defense Innovation Board prioritize investigating Bitcoin's potential in cyber warfare and defense strategies, stressing that neglecting this could impact global power dynamics and compromise the U.S.'s position as a digital superpower.

Trading Desk Insights

Equity futures took a step back on Monday following the impressive performance of the S&P 500, which achieved a new high for the year in 2023 last Friday. This marked the culmination of a five-week upward trend. The S&P 500, representing a wide range of stocks, managed to achieve its highest closing value since March 2022 during this Friday milestone, resulting in a remarkable year-to-date gain of nearly 20%. Meanwhile, the tech-heavy Nasdaq index showed exceptional growth, surging by 37% in the year 2023.

The recent resurgence in the stock market, particularly since October, can be attributed to investors' growing belief that the Federal Reserve might start interest rate cuts in the coming year. This optimism persists despite Federal Reserve Chair Jerome Powell attempting to temper expectations by stating that it is premature to anticipate any policy easing.

All eyes are on the eagerly anticipated November jobs report scheduled for release this Friday.

On the cryptocurrency front, Bitcoin surpassed the $42,000 mark, marking a 19-month high, while the price of gold reached its highest nominal intraday level ever. This bullish sentiment spilled over into the crypto mining sector, with stocks like Marathon Digital and Riot Platforms experiencing gains of more than 14% and 12%, respectively. Additionally, Coinbase and Microstrategy also saw substantial increases of more than 9% and 8%, respectively.

Notably, prominent figures in the cryptocurrency industry are expecting the start of a new bull market, with an increasing number of voices predicting fresh all-time highs for Bitcoin in 2024, potentially surpassing the $100,000 mark. Another positive development on the horizon is the scheduled Bitcoin halving event, which occurs every four years and is set for May 2024. These factors collectively have the potential to trigger a significant upward surge in Bitcoin's price.

Technical Charts


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