November 1, 2023

Markets Insights

Economic Calendar

Next FOMC meeting: Nov 1st 2023

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

The News Room

Etherfuse Introduces 'Stablebond' for Tokenizing Mexican Government Bonds on Solana Blockchain

Etherfuse, a decentralized blockchain infrastructure platform, introduced 'Stablebond' during Solana’s breakpoint conference in Amsterdam, targeting the extensive yet underutilized bond market in Mexico. The platform aims to engage retail investors in the country, drawing attention to the fact that Mexico is the second-largest bond market in Latin America with high liquidity, but only 2% of bondholders are Mexican. Etherfuse sees this as an opportunity to diversify investment in bonds beyond institutions, governments, and foreign investors.

Stablebonds, tokenized bonds built on the Solana blockchain and backed by the Mexican Government, represent an innovative blend of traditional bonds and blockchain technology, promising security and transparency. This launch aligns with the growing trend of tokenizing real-world assets, a market that has seen substantial growth from $100 million at the start of the year to $698 million. Etherfuse’s CEO, Dave Taylor, highlighted the potential of Stablebonds to enhance stability in decentralized finance (DeFi) and blockchain products while providing a novel investment solution that bridges traditional finance and blockchain innovation.

Large Market-Making Firms in Talks to Potentially Provide Liquidity for BlackRock's Bitcoin ETF

Large market-making firms, including Jane Street, Virtu Financial, Jump Trading, and Hudson River Trading, are reportedly in discussions to potentially provide liquidity for BlackRock's anticipated Bitcoin ETF, pending regulatory approval. While these trading giants have engaged in talks with BlackRock, all parties involved have either declined to comment or have not responded to requests for comments. The crypto space in the U.S. has experienced a crackdown this year, causing some firms to reduce their crypto activities. Despite this, the approval of Bitcoin ETFs by the U.S. Securities and Exchange Commission could create new opportunities for U.S.-based firms to engage in crypto trading, leveraging their expertise in market-making for ETFs. Market makers play a crucial role in ETFs, ensuring the ETF price reflects the value of its holdings. The approval of Bitcoin ETFs in the U.S. has become more likely following a court's criticism of the SEC's rejection of Grayscale's initial application to convert its Bitcoin Trust into an ETF, indicating a potential change in the regulatory stance towards Bitcoin ETFs.

Saudi Arabia's NEOM Initiative Invests $50 Million in Web3 Firm Animoca Brands

Saudi Arabia’s NEOM initiative is set to bolster its position in the Web3 domain with a $50 million investment in Animoca Brands, a key player in Web3 gaming and investments. This move aligns with the Saudi Vision 2030 strategy, aiming to diversify the economy and promote technological innovation. The investment is divided into two parts: half for acquiring Animoca shares from the secondary market and half through convertible notes, with the completion of the latter contingent on certain conditions. Despite Animoca’s delisting from the Australian Securities Exchange in 2020, its shares continue to trade in the secondary market, reflecting a sustained interest in the company. As Saudi Arabia has previously invested in numerous U.S. venture capital firms involved in blockchain and Web3 ventures, this partnership with Animoca Brands represents a significant step toward achieving the goals set out in Vision 2030, fostering innovation and embracing the potential of blockchain technology.

Trading Desk Insights

Equity futures remained stagnant on Wednesday, with Wall Street poised for the Federal Reserve's impending verdict on interest rates, coming off a challenging month. ADP's October report revealed a softer private sector jobs addition at 113k, falling short of the anticipated 130k. This unexpected underperformance spurred a rally in equity futures, as the softened labor market landscape might temper expectations of imminent rate hikes.

While the consensus is that the Federal Reserve will hold its ground on rates post the conclusion of its two-day meeting on Wednesday, the real focus for investors will be gleaning insights from Chair Jerome Powell and the Federal Open Market Committee's forward-looking stance. Current market sentiments, as informed by futures pricing, predict no rate adjustment at this meeting, with only a 29% chance of a potential hike come December. Conversations are already hinting at a possible rate cut by June.

Bitcoin echoed the stock market's upward trajectory earlier today, buoyed by ADP's weaker-than-expected jobs data. However, it faced resistance at the 35,250 mark, pulling back to trade around 34,500. Both daily and weekly charts, which are pivotal for traders, show the RSI venturing into the overbought domain (above the 70 mark). Historically, these levels have been indicative of FOMO phases, as seen during the mid-2019 and late 2020 bull runs, where traders aggressively dive in, driven by the fear of missing out on lucrative returns.

In a significant update for the crypto domain, total assets under management (AUM) touched $31.7 billion in October, marking the first surge since June 2023. The month was punctuated with major strides in the digital asset arena. The green light for the ETH futures ETF, coupled with whispers about BlackRock's application approval and other pivotal events, have revitalized investor sentiment. The anticipation is building around the potential nod for the inaugural spot Bitcoin ETF.

On a separate note, PayPal has secured the green light to roll out its crypto services in the United Kingdom.

Technical Charts


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