December 8, 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 CEO Optimistic About Spot Bitcoin ETF Approval Following Positive SEC Engagements

Grayscale Investments CEO Michael Sonnenshein expressed optimism about ongoing dialogues with the Securities and Exchange Commission (SEC) regarding the potential approval of a spot Bitcoin exchange-traded fund (ETF). Despite no specific timelines, Sonnenshein noted active engagement and positive signals from the SEC. Grayscale's pursuit of a spot Bitcoin ETF gained momentum following a court decision in August, requiring the SEC to re-review their application after initially rejecting their proposal to convert the GBTC fund into an ETF. SEC Chair Gary Gensler, known for his critical stance on crypto, is still reviewing this decision amidst concerns about fraud and manipulation in the crypto space. Sonnenshein also responded to JPMorgan CEO Jamie Dimon's recent critical remarks about crypto, highlighting the growing investor interest in cryptocurrencies and the adaptation of traditional financial institutions to these new technologies, as evidenced by JPMorgan's introduction of programmable payments via JPM Coin.

Circle Partners with Nubank to Bring USDC Stablecoin to Brazil, Tapping into Latin America's Crypto Market

The issuer of the USDC stablecoin, Circle, has partnered with Latin American fintech leader Nubank to broaden access to its dollar-backed digital asset. This collaboration will introduce USDC support within Nubank Cripto, allowing Brazilian users to buy and hold digital dollars. Nubank boasts a customer base of 90 million across Latin America, with over 85 million in Brazil. Alongside this partnership, Nubank has teamed up with Talos to reduce crypto trading costs. Jeremy Allaire, Circle's CEO, highlighted Brazil's significant role in digital currency adoption and sees the partnership as a key moment in expanding USDC's global reach.

Brazil is actively developing its own digital currency and attracting top crypto firms and payment companies. The widespread use of Pix, a peer-to-peer digital payment app, in Brazil shows the high consumer interest in digital assets. Thomaz Fortes, the general manager of Nubank's crypto arm, looks forward to integrating Nubank Cripto with other financial services in their app, signaling growing digital asset adoption in Brazil.

Deloitte Taps Polkadot Ecosystem's Kilt Blockchain for Digital Shipping Logistics

Deloitte, a leading professional services firm, is set to utilize the Polkadot-based Kilt blockchain in collaboration with Nexxiot to provide innovative logistics and supply-chain services in the shipping industry. Their service, named KYX, combines Know Your Client (KYC) and Know Your Cargo processes for verifying client identities and cargo. This system, built on the Kilt network, allows entities to create blockchain-based services without needing direct involvement with cryptocurrencies. Shipping giant Hapag-Lloyd will be the first to implement KYX, with plans to equip 1.5 million containers with tracking devices. This follows IBM's earlier, similar blockchain project in shipping, TradeLens, which was discontinued due to limited commercial interest. Deloitte's involvement in blockchain extends back several years and includes participating in fintech firm Digital Asset's network for decentralized infrastructure, indicating a growing interest and resurgence in blockchain-based enterprise projects.

Trading Desk Insights

There has been a remarkable surge in open interest for both BTC and ETH on the Deribit platform, setting a new record at an impressive $23.6 billion. This surge signals a heightened demand for these leading cryptocurrencies. When we delve into the specifics, 67% of this substantial open interest is concentrated on Bitcoin. Notably, a significant portion of this open interest revolves around specific strike prices:
For BTC, there is a notable focus on call options with strike prices set at $50,000, $40,000, and $45,000.
For ETH, call options are in demand with strike prices at $2,300, $2,400, $2,500, and $3,000.

Shifting gears, El Salvador has embarked on an intriguing endeavor to attract crypto millionaires with its 'Freedom VISA' program. This recently launched initiative invites more than 1,000 individuals annually who are willing to invest a minimum of $1 million in either BTC or USDT. If fully subscribed, this program has the potential to bring in a substantial $1 billion in deposits each year.

In the stock market, the outlook appears to be mixed as stock futures experienced a decline on a Friday morning. This dip comes as investors assess the latest U.S. jobs report. The much-anticipated nonfarm payrolls data for November exceeded expectations, registering at 199,000, surpassing the projected 180,000 figure. Additionally, there was an unexpected drop in unemployment from 3.9% to 3.7%. This unexpected turn of events has triggered an uptick in the 10-year yield and the US Dollar Index, indicating a heightened probability of extended periods of higher interest rates.

Throughout the week, stocks have faced considerable challenges, with the S&P 500 registering a 0.2% decline, thus ending its five-week winning streak. On the other hand, the Nasdaq managed to reclaim positive territory for the week, recording a 0.2% gain and marking its sixth consecutive week of gains.

Technical Charts


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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