November 24, 2023

Markets Insights

Economic Calendar

Next FOMC meeting: Dec 13th 2023

  • Probability of a 0bps hike → 96%
  • Probability of a 25bps hike → 4%

The News Room

Singapore Central Bank Rules to Discourage Crypto Speculation, Ease Investment Qualifications

The Monetary Authority of Singapore (MAS) has confirmed its regulatory stance, insisting on stringent measures for crypto service providers to protect retail consumers from the risks of cryptocurrency trading. In its final response to industry feedback, MAS maintained that crypto entities must prevent retail speculation by prohibiting financing or margin transactions and avoiding incentives for trading. Furthermore, crypto service providers are barred from accepting payments via locally issued credit cards and must evaluate customers' understanding of risks before granting service access. These rules follow MAS's consistent warnings against speculative retail trading and its aim to balance crypto industry growth with consumer protection. Some flexibility has been shown, such as considering certain crypto assets in the accreditation of investors, but MAS has set high standards for exchanges in token listing and conflict of interest disclosures. The new measures, focusing on operational resilience and customer protection, are slated for gradual implementation starting mid-2024.

BBVA Switzerland Selects Ripple-Owned Metaco to Power Digital Asset Operations

BBVA Switzerland has announced a collaboration with Metaco, a company owned by Ripple, to expand its digital asset operations using Metaco's Harmonize platform. This move is part of a growing trend among banks to adopt digital asset solutions, with HSBC, DekaBank, DZ Bank, and VP Bank also partnering with Metaco. BBVA Switzerland, which began offering cryptocurrency trading and custody to its clients in 2021, aims to improve its operations' speed, efficiency, and governance through this partnership. Metaco will deliver its services via a Software-as-a-Service model, leveraging its partnership with Avaloq, a wealth-tech firm integrated with Harmonize, for a seamless digital asset management experience across various use cases like DeFi, tokenization, cryptocurrency custody, and smart contract management.

UK Investment Funds get Green Light for Tokenization

The UK government, in collaboration with The Investment Association, Treasury, and the Financial Conduct Authority (FCA), has approved the tokenization of investment funds, positioning the country at the forefront of adopting blockchain technology in asset management. This move is aimed at enhancing efficiency, transparency, and competitiveness globally. A roadmap and a baseline model for implementation within the existing legal framework have been published, allowing FCA-authorized funds to tokenize sales and redemption transactions that comply with specific criteria. This development aligns with the UK's broader strategy to become a hub for digital assets and web3, as evidenced by the upcoming Digital Securities Sandbox initiative and recent legislative proposals by Finance Minister Jeremy Hunt. Moreover, it reflects a global trend towards integrating real-world assets with blockchain, as demonstrated by JPMorgan's recent blockchain interoperability proof-of-concept for managing investment portfolios across multiple blockchains.

Trading Desk Insights

Equity futures are showing modest gains as Wall Street gears up for its fourth consecutive week of positive performance. The S&P 500 has advanced by 0.9% over the course of the week, while Nasdaq has recorded a 1% increase during the same period. This remarkable winning streak would mark the longest continuous weekly uptrend for both the S&P 500 and the Nasdaq since the month of June.

These market movements have been influenced by a noteworthy drop in Treasury yields this week, reaching their lowest points in several months. This decline has been driven by growing optimism that inflation is subsiding and speculation that the Federal Reserve might halt its rate hikes.

It's worth noting that the U.S. stock market will close early today, at 1 p.m., following the Thanksgiving holiday closure on Thursday.

In the cryptocurrency realm, Bitcoin made a brief appearance above the $38,000 threshold for the third time. However, it's important to highlight that on the two previous occasions recently, prices retraced by 6%. Analyzing the current technical landscape, there's a possibility that a similar scenario could unfold. The stock market appears to be approaching a potential peak, and the 10-year yield is showing signs of rebounding from its 50-week moving average, hinting at potential headwinds for risk assets.

JPMorgan has raised concerns that the Grayscale Bitcoin Trust (GBTC) might experience significant outflows amounting to $2.7 billion if their proposal for ETF conversion gains approval from the SEC. Notably, a considerable number of shares have been acquired in the secondary market this year at a substantial discount to their net asset value (NAV) in anticipation of the trust's conversion into an ETF. If these purchases were primarily speculative in nature, driven by expectations of GBTC's conversion, it is reasonable to anticipate that investors may decide to capitalize on their gains once the conversion takes place.

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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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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