March 7, 2024

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Next FOMC meeting: Mar 20th 2024

  • Probability of a 25bps ease → 3%
  • Probability of a 0bps hike → 97%

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The News Room

MicroStrategy Ramps Up Bitcoin Investment with $700M Debt Offering

MicroStrategy, led by Bitcoin advocate Michael Saylor, has increased its convertible debt offering from $600 million to $700 million to purchase more Bitcoin, aiming for an interest rate of 0.625% per annum. The conversion rate for these notes is set at $1,497.68 per share, a 42.5% premium over its closing price on Tuesday, underlining the company's aggressive investment strategy in Bitcoin, of which it holds around 193,000 BTC valued at approximately $13 billion. This move reflects MicroStrategy's position as the leading Bitcoin accumulator among publicly traded companies. Despite a recent dip in Bitcoin prices below $64,000 after reaching a new high above $69,000, MicroStrategy's shares saw a significant increase, trading up nearly 17% on the day, demonstrating the market's response to its continued investment in Bitcoin.

BlockFi Strikes Tentative Deal with FTX for Customer Full Value Recovery

BlockFi, a crypto lender that declared bankruptcy following FTX's collapse has reached a tentative settlement with FTX and Alameda Research's estates, potentially offering full value recovery for its customers. The agreement, pending judicial approval, involves BlockFi receiving $874.5 million in claims against both FTX and Alameda, including a $250 million secured claim prioritized after FTX's bankruptcy plan is creditor-approved. This deal also sees FTX relinquishing its claims against BlockFi, facilitating payments to BlockFi under FTX's restructuring plan. This settlement, stemming from BlockFi's complex financial entanglements with FTX and Alameda, including a $400 million credit line from FTX, and BlockFi being one of FTX's major creditors, is hailed as a significant victory for BlockFi's customers and creditors, redirecting funds initially earmarked for litigation towards customer reimbursements.

DCG and Barry Silbert Move to Dismiss NYAG Lawsuit Over Alleged $3 Billion Fraud

Digital Currency Group (DCG) and its founder, Barry Silbert, have submitted motions to dismiss a lawsuit brought by New York Attorney General Letitia James. The legal action, initiated in October 2023 and expanded recently, accuses DCG, its subsidiary Genesis Global Capital, and Silbert of defrauding investors connected to the Gemini exchange's Earn product and Genesis, resulting in a $3 billion loss following the failures of Three Arrows Capital and FTX. DCG's statement criticized the lawsuit as "meritless," arguing that it is based on "baseless innuendo, blatant mischaracterizations, and unsupported conclusory statements." This legal move comes after Genesis proposed a settlement with the NYAG last month, which DCG opposed.

Trading Desk Insights

Bitcoin is striving to reclaim its previous highs. Following the market downturn, BTC has exhibited a pattern of lower highs. A breach of this market structure could trigger further bullish momentum, propelling prices to new record levels. Failure to surpass the 67,700 resistance level may result in downward movement towards 65,500 and potentially 64,000.

Examining recent ETF flows, the market observed another round of net inflows totaling $332.1 million, alongside continued selling from Grayscale amounting to $276.2 million. Valkyrie marked its most successful day yet with inflows reaching $40.7 million.

According to Bloomberg reports, Pantera Capital is actively seeking fresh capital to acquire discounted Solana (SOL) tokens from the distressed FTX estate. They aim to purchase up to $250 million of SOL tokens at a 39% discount below the 30-day average price of $59.95, with a vesting period of at least four years.

The Dencun upgrade for ETH is slated for March 13th and is anticipated to result in reduced fees for users of layer-2 networks. Essentially, this upgrade enables Ethereum to function as a comprehensive database for other blockchains, thereby enhancing data storage efficiency and affordability.

Stock futures edged higher on Thursday following the first winning session in three days for the major averages. During Wednesday's testimony before the House Financial Services Committee, the central bank chair hinted that the policy rate has reached its "peak for this tightening cycle," but reiterated that the Fed is not prepared to initiate rate reductions. Investors will closely monitor Powell's appearance before the Senate Banking Committee on Thursday.

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