March 25, 2024

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Next FOMC meeting: May 1st 2024

  • Probability of a 25bps ease → 12%
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The News Room

SEC Seeks Expanded Workforce to Tackle Crypto and Emerging Tech Challenges

The Securities and Exchange Commission (SEC) is seeking to enhance its workforce by over 50 new positions to address challenges posed by emerging technologies, including artificial intelligence, cryptocurrency, and changes in investor communications through forums and influencers. This request forms part of the SEC's fiscal year 2025 budget, highlighting the necessity to adapt to the evolving and complex capital markets, especially the "Wild West" of crypto markets, to protect investors from potential wrongdoing. Similarly, the Treasury Department and the Commodity Futures Trading Commission (CFTC) have submitted budget requests emphasizing the need for increased oversight and resources to combat digital asset risks, money laundering, and ensure the security of the financial system, including derivatives clearing organizations in the face of the rise in digital asset products. These budget requests underscore the agencies' focus on adapting regulatory and oversight frameworks to address the unique challenges presented by digital assets and emerging technologies in the financial sector.

DigiFT Launches U.S. Treasury Bill Tokens with Simplified Ownership Structure in Singapore

DigiFT, Singapore's on-chain real-world asset exchange, has introduced tokens based on U.S. Treasury Bills, employing a depository receipt structure for direct beneficial ownership and legal returns from the securities. Unlike the complex legal frameworks of most current RWA tokens, which often involve wrapped tokens representing interests in various financial instruments, DigiFT's approach simplifies investor understanding by offering a more straightforward legal arrangement. Targeted at stablecoin issuers, Web3 developers seeking regulatory-compliant solutions, and institutional and accredited investors, these tokens can be accessed through authorized self-custodial wallets using fiat or stablecoins. With a Capital Markets Services License and Recognized Market Operator status from the Monetary Authority of Singapore, DigiFT's launch comes amid a 15.2% growth in RWA tokens' market cap to $6.5 billion, reflecting the burgeoning interest in tokenizing real-world assets for enhanced transparency and efficiency.

French Energy Giant EDF’s Exaion Joins Chiliz Chain as Validator, Powers's Fan Token Platform

Exaion, an EDF subsidiary, has become a network validator on the Chiliz Chain, which powers's fan token trading platform, as part of its venture into the sports and entertainment blockchain sector. Leveraging its energy and technology expertise, Exaion aims to contribute to the digital transformation of industries by focusing on the energy efficiency of data centers. This collaboration with Chiliz aligns with Exaion's strategy to pioneer digital engagement innovations. The move also sees major football clubs like Paris St-Germain, which has become the first club to serve as a validator on the Chiliz Chain, securing the network that supports fan tokens for leading teams such as FC Barcelona, Manchester City, Juventus, and Paris St-Germain. Validators play a crucial role in maintaining the blockchain's integrity by verifying transactions and facilitating smart contracts, earning revenue through node operation.

Trading Desk Insights

Bitcoin has surged over 5% since Friday's equity close, displaying a pattern of higher highs and higher lows. Currently, price action is confined within a symmetrical triangle formation on the 1-hour timeframe. A breakout above $67,800 could ignite further bullish momentum, potentially propelling Bitcoin towards the $70k threshold and possibly surpassing this year's highs.

Last week, ETF flows painted a rather bleak picture. The market witnessed net outflows totaling $887.7 million, notably with GBTC experiencing staggering outflows of $2 billion. Monday marked a record day of outflows for GBTC, totaling $642.5 million. Fidelity and Blackrock's ETFs also saw their lowest daily inflows since inception, with $2.9 million and $18.9 million respectively.

According to Glassnode, the dollar value of mean on-chain transfers on the Bitcoin blockchain remains significantly below the peak observed in 2021. This suggests that investors are hesitant to sell their holdings. The 7-day and 14-day average mean transfer volumes remained below $200,000, a far cry from the $1 million levels seen during the 2021 bull market. Notably, spot volume has been predominantly concentrated in ETFs, which explains the subdued on-chain volume.

In the equity market, momentum continues to build as major U.S. stock benchmarks achieved new all-time closing highs last week. The S&P 500 recorded a gain of approximately 2.3%, while the Nasdaq surged around 2.9% during the same period.

These gains were fueled by the Federal Reserve's recent statements maintaining their timeline for potential rate cuts this year, coupled with ongoing investor enthusiasm for tech stocks amidst the AI-powered rally. Overall, investor sentiment remains buoyant. Historical analysis of Fed rate cycles since the 1970s suggests that investors generally have more to fear from the initial rate cut in a cycle than from subsequent pauses.

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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.

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