November 17, 2023

Markets Insights

Economic Calendar

Next FOMC meeting: Dec 13th 2023

  • Probability of a 0bps hike → 100%
  • Probability of a 25bps hike → 0%

The News Room

Tether Plans $500M Investment Into Bitcoin Mining Operations

Tether Holdings Ltd., the entity behind the USDT stablecoin, is expanding its business model by investing in Bitcoin mining, planning to spend around half a billion dollars in the next six months. With a strong financial base, evidenced by a $3.2 billion surplus and a $610 million credit line provided to Northern Data AG, Tether aims to build mining operations in Uruguay, Paraguay, and El Salvador, targeting a 1% share of the total Bitcoin network hashrate. This ambition would place Tether among the top 20 global Bitcoin mining entities. However, the move comes amid a challenging period for the industry, with competitors facing bankruptcy and the looming Bitcoin halving that could affect mining revenues. Despite these challenges, Tether's commitment and significant investment signal a strategic pivot that could potentially reshape the competitive landscape of Bitcoin mining.

South Korea's Pension Fund Bought $20M Coinbase Shares in Q3, Made 40% Profit

The National Pension Service of South Korea, one of the largest pension funds in the world, made a notable entry into the digital asset market by purchasing nearly $20 million worth of Coinbase shares in the third quarter. The investment in the prominent Nasdaq-listed crypto exchange marks the fund's first recorded foray into a digital assets company in its U.S. stock portfolio. Despite rising 4% in the third quarter and showing a 177% increase this year, the move has attracted criticism from the South Korean National Assembly due to the perceived speculative nature of digital assets. However, this step aligns with a growing recognition among global pension schemes of the potential of digital assets as a diversification opportunity in investment portfolios.

CoinShares Secures Exclusive Option to Acquire Valkyrie Funds for Crypto ETF Expansion

CoinShares has negotiated an exclusive option to acquire Valkyrie Funds, a key player in the crypto ETF advisory space, aiming to leverage Valkyrie's expertise and potentially incorporate the CoinShares brand into Valkyrie's pending Bitcoin spot ETF. This option, active until March 2024, underscores CoinShares' ambition to expand into the U.S. market and capitalize on the fragmented global ETF market, which is poised for growth with the advent of crypto spot ETPs. While Valkyrie will operate independently until CoinShares exercises this option, the collaboration is set to enhance both companies' offerings, with Valkyrie's CEO, Leah Wald, expressing excitement about the partnership's potential. Valkyrie, alongside other financial institutions like Franklin Templeton and BlackRock, is competing in the race for a spot Bitcoin ETF approval by the SEC, which has delayed its decision on multiple applications, indicating the regulator's cautious approach to the burgeoning digital asset investment products.

Trading Desk Insights

Stocks experienced a decline on Friday as investors endeavored to sustain the positive momentum witnessed this month. All indices are poised to record weekly gains for the third consecutive week. The S&P 500 and Nasdaq have both shown a robust performance, with gains exceeding 2% as of Thursday's closing bell. November has proven to be a particularly fruitful month, with the S&P 500 surging by 7.5% and the Nasdaq demonstrating an impressive 9.8% leap.

These remarkable gains were catalyzed by benign U.S. inflation figures, offering investors a glimmer of hope that the most severe inflationary pressures, along with the Federal Reserve's unwavering stance on interest rates, might be receding into the past.

Turning our attention to the realm of cryptocurrencies, Bitcoin has continued its descent, approaching our intraday support level of $35,250, as anticipated. The market currently lacks the necessary impetus to propel it to its annual peaks. Evidently, market participants are seizing the opportunity to secure their profits, mindful of the upcoming BTC spot ETF deadline looming one and a half months from now. Trading volume has declined by a notable 31% to $41 billion, while futures and options open interest are also tapering off.

Looking at ETHBTC, it experienced a 9% decline since the previous Friday, aligning perfectly with our earlier predictions. The prevailing trend for this pair remains bearish, unless a substantial pivot high like the one at 0.0625 is breached. In other words, Bitcoin continues to reign supreme in the prevailing market landscape.

Shifting gears, an overwhelming majority of individuals and entities holding Bitcoin have witnessed a surge in the value of their holdings compared to their initial acquisition price. A striking 80% of Bitcoin addresses currently hold assets that have appreciated in value, making it apparent that should these addresses opt to sell their Bitcoin at the prevailing market rates, they would stand to realize a significant profit.

Technical Charts


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.

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