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Cboe is Launching Margined Bitcoin and Ether Futures in January
Cboe Digital is set to launch the first U.S. regulated margin futures for Bitcoin and Ether in January, marking a significant expansion in its cryptocurrency offerings. This move will position Cboe as the first regulated platform in the U.S. to offer both spot and leveraged derivatives trading on a single platform. Furthermore, Cboe plans to broaden its crypto derivatives portfolio by introducing physically delivered products, pending regulatory approval. The company already facilitates trading in spot futures for several cryptocurrencies including Bitcoin, Ether, Litecoin, and USDC. This development is expected to enhance liquidity and hedging opportunities in the cryptocurrency market, supporting its ongoing growth. Major crypto trading entities like B2C2, Cumberland DRW, Jump Trading Group, and others are backing Cboe's new venture, highlighting its potential to attract broader institutional participation and mature the crypto asset class.
JPMorgan Rolls out Programmable Payments via JPM Coin
JPMorgan has officially launched programmable payments on its blockchain-based payments system, JPM Coin, marking a significant development in the bank's digital currency initiative. This new feature automates transactions according to predefined rules, streamlining treasury operations for institutional clients by speeding up transactions and optimizing fund utilization during off-hours. The service, which has been in testing since 2021 with Siemens AG, is now live and set to be adopted by other major corporations like FedEx and Cargill. Although JPM Coin currently processes $1 billion daily, a fraction of JPMorgan's overall $10 trillion daily transactions, the bank aims to eventually extend its blockchain payment solutions to retail customers.
Midas - A New Yield-Bearing Stablecoin Investing in U.S. Treasuries
Midas is launching a stablecoin, stUSD, backed by U.S. Treasuries, aiming to integrate with DeFi platforms like MakerDAO, Uniswap, and Aave in the near future. The project, which plans to purchase Treasuries through BlackRock and use Circle's USDC stablecoin for entry, involves institutional partners like Fireblocks and Coinfirm. This initiative reflects a broader trend of bridging traditional finance yields, such as those from U.S. Treasuries, with the DeFi ecosystem by tokenizing TradFi assets. Midas's stablecoin, fully backed by U.S. Treasuries and issued under German law, is set to enter DeFi markets this quarter before targeting a retail launch in the upcoming year, highlighting the growing interest in yield-bearing stablecoins within the digital asset space.
Trading Desk Insights
On Monday, U.S. equities experienced a decline following Moody’s decision to revise its U.S. credit rating outlook from stable to negative.
Moody's rationale for this adjustment, shared on Friday, pointed to the United States' "very substantial" fiscal deficits and political gridlock in Washington as key contributing factors. However, it's important to note that despite this outlook shift, Moody's reaffirmed the nation's credit rating at AAA, signifying the highest level of creditworthiness. This development comes on the heels of Fitch's decision three months ago to lower the U.S. long-term foreign currency issuer default rating from AAA to AA+, citing expectations of fiscal deterioration, an increasing debt burden, and political deadlock on fiscal and debt-related matters.
The prevailing environment of rising interest rates coupled with a lack of an effective fiscal policy strategy has led Moody's to believe that "the U.S.' fiscal deficits will remain very substantial, significantly impairing debt affordability."
In the wake of the outlook change, Treasury yields experienced an uptick, with the benchmark 10-year yield edging towards 4.69%.
Turning our attention to the BTCUSDT market, it is exhibiting stability, with prices trading within an ascending trend channel since October 24th, marked by higher highs and lows. The resistance level at $38,000 remains unbroken, while the support level at $35,600 warrants close monitoring. Notably, heightened market activity on the CME indicates significant institutional involvement in driving this rally, with individual investors potentially playing a supporting role.
The announcement of Blackrock's ETH ETF plan propelled ETH prices from $1,890 to $2,130, representing a 13% increase. This development also had a ripple effect on the ETHBTC pair, causing a 13% surge. Consequently, this led to a more substantial rally in altcoins, particularly SOL, which surged by 50% to reach $64.
When examining Grayscale trusts, both GBTC and ETHE saw their discounts narrow, with GBTC at 10.4% and ETHE at -14%, reflecting a higher probability of witnessing the approval of spot ETFs for both BTC and ETH.
In other noteworthy developments, the digital asset investment product sector saw significant inflows of $293 million in the past week, extending a seven-week streak of inflows that has now surpassed the $1 billion mark year-to-date, making it the third-highest yearly inflow on record.
Lastly, blockchain investments registered $553 million across 126 deals last month, indicating a 16% decline in funding and a 20% reduction in the number of deals compared to September.
Technical Charts
Disclaimer
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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Crypto and/or digital currencies involve substantial risk, are speculative in nature and may not perform as expected. Many digital currency platforms are not subject to regulatory supervision, unlike regulated exchanges. Some platforms may commingle customer assets in shared accounts and provide inadequate custody, which may affect whether or how investors can withdraw their currency and/or subject them to money laundering. Digital currencies may be vulnerable to hacks and cyber fraud as well as significant volatility and price swings.
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