March 8, 2024

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Next FOMC meeting: Mar 20th 2024

  • Probability of a 25bps ease → 3%
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The News Room

BlackRock Eyes Bitcoin ETF Exposure for Global Allocation Fund Amid Crypto Push

BlackRock has indicated potential plans to invest in spot Bitcoin ETFs through its Global Allocation Fund, according to an SEC filing. This move could broaden exposure to Bitcoin's price performance for the fund, which managed $17.8 billion as of early March. This development follows BlackRock's recent initiative to include Bitcoin ETFs in its Strategic Income Opportunities Fund, with assets over $36.7 billion. BlackRock's own iShares Bitcoin Trust (IBIT) has been particularly successful, capturing significant inflows and reaching a valuation of $12.7 billion in assets. This interest in digital asset ETFs comes as BlackRock awaits SEC decisions on its and Fidelity's proposals for a spot Ethereum ETF, underscoring the asset manager's growing engagement with cryptocurrency investment products.

SEC Delays Decision on Options Trading for BlackRock's Bitcoin ETF, Eyes Further Evaluation

The SEC has postponed its decision on permitting Nasdaq ISE, LLC to offer options trading on BlackRock's spot Bitcoin ETF to April 24, aiming for additional time to evaluate the proposed rule change. This extension aligns with similar delays for decisions on Cboe Exchange, Inc., and Miax Pearl LLC regarding their applications to list and trade options on spot Bitcoin ETFs. The delay allows the SEC to thoroughly consider the implications of introducing options trading for these ETFs, following public comments favoring approval. The SEC's decision will significantly impact the regulatory landscape for cryptocurrency-based financial products, indicating a cautious approach to overseeing the expansion of Bitcoin and its integration into mainstream financial markets.

Nigeria's Central Bank Partners with Gluwa to Boost eNaira Adoption Using Blockchain Technology

The Central Bank of Nigeria is enhancing the eNaira, its digital currency, through a partnership with Gluwa Nigeria, employing blockchain technology to improve system efficiency and increase adoption across Nigeria's population of over 226 million. By integrating Gluwa's Credal blockchain technology via application programming interfaces (APIs), this collaboration aims to bolster financial inclusion, enhance eNaira functionality, and promote financial innovation. The partnership will facilitate more straightforward loan origination, tracking, settlement, and credit scoring for local fintech lenders, addressing challenges in expanding eNaira's adoption and bridging the gap with the country's predominant cash-based informal economy valued at $220 billion. Despite the eNaira's launch in 2021 and significant growth in wallet numbers and transaction value, its adoption has lagged behind cash transactions, partly due to limited merchant acceptance.

Trading Desk Insights

Bitcoin surged to a fresh all-time high of $70,200 before encountering significant selling pressure, pushing it down to $67,300. Currently, prices are oscillating within the range of $65,500 and $68,000. Bid and ask orders are stacking up on Binance between $67k and $70k, while Coinbase noted an increase in offers, particularly around the $70k mark.

The supply-demand equilibrium has tilted to 1:10 recently, attributed to Wall Street's adoption of U.S.-based spot BTC ETFs. This rally has also spurred heightened activity in the options market. Total open interest in BTC options on Deribit surged to a record $20.4 billion, surpassing the previous peak of $14.36 billion in October 2021. Similarly, ETH's options open interest reached an all-time high of $11.66 billion. Notably, the bitcoin call option at the $200,000 strike price on Deribit saw a notional open interest exceeding $20 million, nearly three times BTC's current market rate of $67,000. This strike price gained popularity the last time bitcoin traded above $60,000 in 2021.

Examining ETF flows, the market absorbed a fresh round of net inflows totaling $472.6 million, while Grayscale saw continued outflows amounting to $374.8 million. Fidelity and Valkyrie recorded their most significant inflow day, with $473.4 million and $41.8 million respectively.

Memecoins continue their rally as ETH approaches the $4k milestone. PEPE, SHIB, WIF, and DOGE surged as much as 34%, 20%, 38%, and 11% respectively in the last 24 hours, benefitting from a "spillover effect" from BTC and ETH growth.

S&P 500 futures remained largely unchanged on Friday as traders dissected cross-currents in February's jobs report.

February's jobs data presented conflicting signals regarding the Federal Reserve's timing for interest rate cuts. While the number of jobs added last month surpassed expectations at 275,000 versus an expected 198,000, the unexpected uptick in the unemployment rate to 3.9% (versus an expectation of 3.7%) and lighter-than-feared wage growth at 4.3% (versus an estimate of 4.4%) raised concerns. Treasury yields and the US dollar declined on the release.

Federal Reserve Chair Powell, speaking at the Senate Banking Committee on Thursday, stated, "We're waiting to become more confident that inflation is moving sustainably at 2%. When we do get that confidence, and we're not far from it, it'll be appropriate to begin to dial back the level of restriction."

In other developments, the European Central Bank left rates unchanged on Thursday and revised its forecast for inflation and growth downwards.

Lastly, the number of family offices worldwide has tripled since 2019, sparking a new competition among private equity firms, hedge funds, and venture capital firms to attract their investments. According to reports, the number of family offices globally exceeded 4,500 last year, with a concentration in North America, managing assets of $6 trillion or more.

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