November 14, 2023

Markets Insights

Economic Calendar

Next FOMC meeting: Dec 13th 2023

  • Probability of a 0bps hike → 95%
  • Probability of a 25bps hike → 5%

The News Room

Fake BlackRock XRP ETF Filing Sparks Temporary Surge in XRP Price

A deceptive filing made to appear as if BlackRock was preparing to launch an XRP ETF led to a temporary surge in XRP's price. The filing, which appeared on the Delaware Divisions of Corporations website, mimicked the format of BlackRock's authentic filings, including the asset manager's name and the address of its registered agent. It followed the pattern of BlackRock's previous filings for Bitcoin and Ether but included XRP. However, a BlackRock spokesperson clarified to The Block that the filing was unrelated to the company, debunking any plans for an XRP ETF launch by BlackRock. The false news initially led to a 12% increase in XRP's price, which later corrected back to around 66 cents per token after the revelation that the filing was fake.

Bitcoin Mining to Bolster Renewable Energy Grids: Iris Energy Co-Founder

Iris Energy co-founder and co-CEO Daniel Roberts highlighted the potential of Bitcoin mining to support renewable energy grids and provide solutions to energy supply imbalances. By strategically locating near renewable sources, Iris Energy aims to use excess energy for Bitcoin mining, especially in areas like West Texas, where renewable generation outpaces transmission capacity. This approach allows the company to balance the grid by consuming power when it's abundant and stepping back when demand peaks, as evidenced by the $2.3 million in power credits it received for curtailing operations during high-demand periods. Roberts emphasized Iris Energy's commitment to sustainable mining, using 100% renewable energy and building institutional-grade data centers capable of supporting high power-density applications beyond Bitcoin mining, such as generative AI. Despite market challenges and the FTX collapse, Roberts remains optimistic, noting improvements like a stabilized Bitcoin price, the anticipated approval of a Bitcoin ETF, and the upcoming halving event.

Tokenized Cash Fintech Fnality Raises $95M Led by Goldman and BNP Paribas

Fnality, a fintech firm focused on creating tokenized versions of major currencies backed by central bank cash, has secured $95 million in Series B funding. The investment, spearheaded by Goldman Sachs and BNP Paribas, includes contributions from prominent industry players such as DTCC, Euroclear, Nomura, and WisdomTree, alongside renewed support from its original 2019 backers including Banco Santander, BNY Mellon, Barclays, and others. Fnality aims to bridge the gap between traditional and decentralized finance by enabling blockchain-based settlement solutions in wholesale markets, with a focus on delivery versus payment systems. This new round of funding underscores the financial sector's commitment to integrating blockchain technology for more efficient and innovative transaction methods.

Trading Desk Insights

Stock futures experienced a robust uptick on Tuesday, eliciting a positive response from investors who welcomed the latest U.S. CPI report.

The CPI exhibited stability in the previous month, defying expectations of a 0.1% month-over-month increase. Meanwhile, the core CPI, which excludes food and energy prices, registered a growth of 0.2%, falling short of the anticipated 0.3% and marking its slowest expansion in two years. This development injected a sense of optimism into the market, signaling that the Federal Reserve was making progress in its battle against inflation. Subsequent to this report, fed-funds futures indicated that traders had eliminated any possibility of an interest rate hike in December, which had previously been estimated at 14%.

UBS has projected a contraction of the economy by 0.5% in the middle of the upcoming year, with annual GDP growth expected to reach a mere 0.3% in 2024. Unemployment is anticipated to climb to nearly 5% by the year's end. Additionally, the Swiss bank foresees the U.S. Federal Reserve reducing interest rates by as much as 275 basis points in 2024, a figure nearly four times higher than the market consensus. This forecast comes as the world's largest economy teeters on the brink of recession. In contrast, Goldman Sachs predicts that the U.S. economy will expand by 2.1% in 2024, surpassing other developed markets.

Now, turning our attention to the cryptocurrency market.

Bitcoin (BTC) is retracing towards our intraday support level of 35,600, where there is potential for a rebound. Trading volume is on the rise, up by 45% to $33 billion, while 24-hour liquidations in the market have increased by 35% to $175 million.

Ethereum (ETH) has returned to the 2000s price range but may undergo a pullback towards the breakout area at 1900. The ETHBTC pair has shown signs of recovery but remains in a downtrend. For now, we should expect a dead cat bounce as there is no clear reason to believe ETH should consistently outperform BTC in this market environment.

The crypto market is currently witnessing a significant shift in dynamics, with altcoins, including ETH, accounting for 60% of trading volume. This milestone represents the highest level observed in over a year and highlights an important trend in the cryptocurrency space. Historically, such an increase in altcoin trading volume relative to BTC has been a strong indicator of a bull market in the crypto space. This shift in trading activity suggests that investors are increasingly drawn to altcoins beyond the dominant BTC.

Technical Charts


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