January 10, 2024

Markets Insights

Economic Calendar

Next FOMC meeting: Jan 31st 2024

  • Probability of a 25bps ease → 5%
  • Probability of a 0bps hike → 95%

The News Room

Hacker Seized SEC Phone Number, Falsely Announces Bitcoin ETF Approval on X Platform

The U.S. Securities and Exchange Commission (SEC) faced a security lapse on its X (formerly Twitter) account, leading to the spread of false information about Bitcoin ETF approvals. According to X’s Safety team, the breach occurred when an individual gained control over a phone number linked to the @SECGov account through a third-party, rather than a direct compromise of X's systems. This incident, which briefly impacted Bitcoin (BTC) prices, highlights the SEC's failure to implement basic security measures, such as two-factor authentication, which was not enabled at the time. The lapse has drawn criticism and concern from U.S. senators J.D. Vance and Thom Tillis, who have demanded an explanation from the SEC, emphasizing the gravity of cybersecurity in regulating major financial markets. The incident underscores the importance of robust digital security practices even for high-profile regulatory bodies like the SEC.

BlackRock, ARK 21Shares Follow Rivals in Cutting Bitcoin ETF Fees

The crypto industry is eagerly awaiting the potential approval of a spot Bitcoin exchange-traded fund (ETF) by the U.S. Securities and Exchange Commission (SEC), possibly as soon as today. In anticipation, BlackRock (BLK) and ARK 21Shares have joined other competitors in reducing their proposed ETF fees. BlackRock updated its fee to 25 basis points from the previously announced 30, offering a promotional rate of 12 basis points for the first $5 billion during the first year. ARK 21Shares reduced its fee to 0.21% from 0.25%, waiving fees entirely for the first six months or until the fund reaches $1 billion in assets. These reductions follow similar moves by Bitwise, Valkyrie, WisdomTree, Fidelity, Invesco, and Galaxy, with Bitwise currently offering the lowest fee at 0.20%. The competition among providers is intensifying, with fee structure emerging as a key factor in the race for market share once the ETFs are potentially approved by the SEC.

WebN Group and Nomura's Laser Digital Launch Libre: A New Institutional Web3 Protocol on Polygon

WebN Group and Laser Digital, Nomura's crypto arm, have introduced Libre, an institutional web3 protocol leveraging Polygon technology. This protocol, aimed at compliantly issuing and managing alternative investments, is built on the Polygon Chain Development Kit, emphasizing scalability and security. With experience in asset tokenization since 2014, Libre's founder Dr. Avtar Sehra envisions a platform enabling services like collateralized lending and automated rebalancing of private investment portfolios. Scheduled to go live in Q1 2024, Libre will first be utilized by investment firms Brevan Howard and Hamilton Lane. The initiative represents a significant step in using blockchain technology to diversify and enhance access to alternative asset funds. This development is part of a broader movement towards fund tokenization, as evidenced by similar projects like JPMorgan’s Onyx collaboration and Standard Chartered’s SC Ventures' Libeara platform, highlighting the growing interest in leveraging blockchain for investment portfolio management and fund distribution.

Trading Desk Insights

Today marks a pivotal moment for crypto investors globally as they eagerly await the SEC's decision on a range of spot BTC ETF applications.

However, let's dissect what unfolded yesterday afternoon:

Bitcoin experienced a sharp decline, plummeting by over 6% from 47,900 to a session low of 44,800. This downward spiral was triggered by an erroneous announcement posted on the U.S. SEC's X account, falsely claiming the approval of the highly anticipated Bitcoin spot ETFs. Subsequently, the SEC chair clarified on X that their account had been compromised, and the SEC had not greenlit the spot BTC ETF. Investigation revealed that an unidentified individual gained control over a phone number linked to the SEC X account, which lacked two-factor authentication at the time of the breach.

In parallel, several issuers are vying for attention, sparking a price war. Notably, Cathie Wood's ARK Invest, in partnership with 21Shares, initially announced a 0.8% fee, only to switch gears on Monday, offering a fee waiver for the first six months.

Analysts project initial inflows of $2 billion to $3 billion within the first month, escalating to an estimated $10 billion to $20 billion by year-end.

Looking ahead in 2024, other bullish drivers for Bitcoin include the anticipated halving in April, coupled with potential interest rate cuts from the Federal Reserve.

ETHBTC witnessed a notable rebound, surging by 11% since yesterday afternoon. It's advisable to monitor this ratio closely in 2024. During the next bull market phase, there's considerable speculation that ETH might outperform BTC by more than 30% within a few months.

This morning, standout performers include ETH, ARB, LINK, AAVE, MATIC, among others.

On the traditional market front, stock futures exhibited minimal movement today. Investors are eagerly anticipating the release of fresh U.S. inflation data and earnings reports.

CPI and PPI reports are scheduled for Thursday and Friday, respectively, coinciding with the intensification of earnings season. Notably, Friday's reports will unveil results from major financial heavyweights like JPMorgan Chase and Bank of America. Investors will scrutinize the inflation figures for insights into potential Federal Reserve rate cuts. Despite recent adjustments, market expectations for rate cuts hover around 66%.

Bitcoin Charts

Macro Charts


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