March 15, 2024

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Next FOMC meeting: Mar 20th 2024

  • Probability of a 25bps ease → 1%
  • Probability of a 0bps hike → 99%

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The News Room

El Salvador Moves $400M in Bitcoin to Cold Storage, Revealing Larger BTC Treasury

El Salvador, led by President Nayib Bukele, has significantly bolstered its position in the cryptocurrency world by transferring approximately $400 million worth of Bitcoin (BTC) into a cold wallet, labeled as the country's first "#Bitcoin piggy bank." This move suggests El Salvador's Bitcoin treasury far exceeds the public estimation, previously thought to be below 3,000 BTC. Stored in a physical vault within the nation, this strategic shift to a cold storage solution underlines El Salvador's commitment to integrating Bitcoin into its financial architecture since becoming the first country to officially adopt BTC as a treasury asset in September 2021. The majority of these Bitcoin transfers, notably from Bitfinex, were executed last week, reflecting a strategic accumulation as BTC prices fluctuated around $72,000. This development marks a transparent step towards consolidating the country's Bitcoin reserves, highlighting a more substantial investment in the cryptocurrency than previously disclosed.

Survey Reveals 19% of US Voters Have Bought Cryptocurrency, Showing Cross-Party Engagement

Approximately 19% of American registered voters have engaged in cryptocurrency purchases, with a nearly even distribution across political affiliations: 19% Democrats, 18% Republicans, and 24% Independents, according to a survey by crypto investment firm Paradigm. This data aligns with a previous study by Grayscale, highlighting a significant portion of the crypto-owning demographic as men and Gen Z. Despite skepticism regarding the impact of crypto ownership on voters' concern for related policies, the survey reveals that 6% of these voters possess crypto assets valued between $1,001 and $10,000, suggesting a meaningful financial stake in the sector. This level of investment contrasts with broader financial market participation, where 32% of voters own over $1,000 in stocks, and 57% don't own any stocks at all. The findings come amidst increased political activity and contributions from crypto-focused political donors and super PACs, with significant funds being allocated to various campaigns, illustrating the emerging influence of crypto in political realms. The survey was conducted by Public Opinion Strategies, polling 1,000 registered voters from Feb. 28 to March 4.

Cetera Approves Four US Spot Bitcoin ETFs for Client Portfolios, Emphasizes Education in Digital Assets

Cetera Financial Group, a wealth management firm with $190 billion in assets under management as of December 2023, has officially approved four US spot Bitcoin ETFs for adviser allocations into client portfolios, including BlackRock’s iShares Bitcoin Trust (IBIT), the Fidelity Wise Origin Bitcoin Fund (FBTC), the Franklin Bitcoin ETF (EZBC), and the Invesco Galaxy Bitcoin ETF (BTCO). This move, aimed at integrating Bitcoin ETFs into investment strategies where appropriate, is accompanied by educational training for financial professionals. Highlighting a preference for ETFs from established firms known for their extensive experience and resources, Cetera's selection reflects confidence in these providers' capability to navigate the emerging digital asset class. The approval underscores a growing trend among wealth managers to incorporate Bitcoin ETFs, mirroring a broader industry movement toward embracing digital assets, with varying degrees of openness among firms regarding the inclusion of such innovative investment products.

Trading Desk Insights

In a recent market analysis, Bitcoin experienced a notable decline of approximately 9%, falling from a high of $72,500 to a low of $65,500. This shift resulted in a significant increase in market liquidations, soaring by 175% to reach $775 million within a 24-hour timeframe. From a technical perspective, the $65,000 and $60,000 price points emerge as critical levels of interest, aligning with the 38.2% and 50% Fibonacci retracement levels, respectively. Fibonacci retracements serve as a key technical analysis tool, offering predictions on potential price support and resistance zones.

Evaluating the market from a skeptical standpoint reveals that the 20-day moving average has historically provided strong support, especially noticeable during the recent ETF-driven rally, currently positioning itself around the $65,000 threshold. As the market approached a low of $65,500 earlier today, an immediate rebound was observed, highlighting the resilience at this level.

The downturn was primarily instigated by unexpectedly high inflation figures and profit-taking activities by certain traders, signaling a necessary purge of excess leverage from the system. Despite the gradual institutional adoption, Bitcoin's inherent volatility remains evident. Nevertheless, it is anticipated that the volatility associated with Bitcoin will decrease as the cryptocurrency continues to mature.

In relation to ETF movements, the market absorbed an additional influx of $132.5 million in inflows, a figure that, while smaller compared to previous entries, still indicates positive sentiment.

Market rumors have also highlighted a significant event involving a fund that incurred a loss of approximately $1 billion on a spread bet between MicroStrategy (MSTR) and Bitcoin. It is reported that the fund liquidated its position towards the market's close, contributing to Bitcoin's price dip while elevating the MSTR premium.

In regulatory news, two Democrat Senators have called upon the Securities and Exchange Commission (SEC) to halt the approval of any further crypto-related exchange-traded products (ETPs), citing concerns over inadequate broker disclosures and the challenges of maintaining liquidity in the major cryptocurrency markets.

In other news, $3.35 billion worth of Bitcoin & Ethereum options expire today.

On the equities front, futures saw an uptick on Friday as investors aimed to conclude a week filled with inflation data on a positive note. This optimism comes despite a pullback on Thursday, following the release of February's producer price index data, which exceeded economists' forecasts. The subsequent rise in bond yields, with the 10-year Treasury note reaching 4.3%, raises questions about the Federal Reserve's capacity to relax monetary policy given the strength of recent economic indicators.

Market participants should brace for heightened trading volumes and potential price volatility on Friday, attributed to the simultaneous expiration of futures and options on stock indexes and individual stocks, an event known as "triple witching" that occurs quarterly.

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