November 27, 2023

Markets Insights

Economic Calendar

Next FOMC meeting: Dec 13th 2023

  • Probability of a 0bps hike → 94%
  • Probability of a 25bps hike → 6%

The News Room

UK Technology Working Group Advocates Tokenization of Investment Funds

The U.K.'s Technology Working Group, formed by the Economic Secretary to the Treasury’s Asset Management Taskforce, recently released a report advocating for the tokenization of investment funds, emphasizing the need for regulatory compliance, traditional asset holdings, and interoperability across blockchain networks. The initiative, supported by the Financial Conduct Authority (FCA), marks a significant step towards integrating distributed ledger technology (DLT) in the financial sector, with existing European models like Meltzer Asset Management and Archax providing a blueprint for tokenized funds. The report highlights challenges such as obtaining banking services for tokenization providers and the necessity for regulatory clarity, especially concerning anti-money laundering regulations. The Group plans to further refine the tokenization model and collaborate with regulators to assess legislative impacts in the upcoming year, paving the way for more transformative financial technologies.

Blast Launch 'crossed lines' in Messaging and Execution, says Paradigm

Paradigm, a leading investor in the Ethereum Layer 2 network Blast, has publicly disapproved of the project's launch strategy, which involved enabling bridge transactions before the network's full capabilities were live and imposing a three-month withdrawal freeze. Dan Robinson, head of research at Paradigm, expressed disapproval over these decisions and the project's marketing tactics, stating they potentially harm the industry's standards. While Paradigm has voiced their concerns and disagreements to the Blast team, Robinson also acknowledged the technical prowess of Blast's founder, Tieshun Roquerre, and maintains belief in the team's ability to contribute positively to the blockchain ecosystem. Roquerre has noted Paradigm's post-launch suggestions but maintains that decisions on protocol changes remain under the purview of the Blast team.

Hong Kong Investment Firm Victory Securities Obtains Retail Crypto Trading License

Victory Securities, an investment firm in Hong Kong, has received authorization from the Securities and Futures Commission (SFC) to provide cryptocurrency trading and advisory services to retail investors, making it the first licensed corporation in the region to do so. This approval positions Victory Securities alongside other crypto-native exchanges like HashKey Exchange and OSL Digital Securities, which have also been permitted to cater to retail clients under Hong Kong's new crypto-friendly regulatory framework. This development reflects a broader trend towards Asia becoming a more attractive hub for the crypto industry, driven by clearer regulatory guidelines compared to other regions such as the United States. While Victory is currently listed as an applicant on the SFC's virtual asset trading platform registry, the firm's announcement indicates a move forward in expanding retail crypto access in Hong Kong.

Trading Desk Insights

Monday's trading session witnessed minimal fluctuations in the stock market, with Wall Street aiming to extend its positive momentum following four consecutive weeks of gains.

The financial landscape has been marked by a remarkable winning streak, as all major indices registered consistent growth over the past four weeks. This surge in stock prices has been attributed to the retreat of the 10-year Treasury yield from the brief pinnacle it reached, breaching the 5% mark in late October.

Turning our attention to the cryptocurrency realm, Bitcoin has exhibited the anticipated retracement on an intraday basis, moving towards the lower boundary of the ascending trend channel established on October 24th. This price movement could potentially lead Bitcoin towards the lower threshold of $36,000.

However, on a daily timeframe, Bitcoin has found support from an ascending trend line that originated at the end of October. Despite this positive momentum and the anticipation surrounding ETFs, there is a hint of bearish divergence lurking in the background. While prices have been scaling higher peaks, both the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) indicators have been showing lower highs, suggesting a potential slowdown in momentum.

The market's dedication to holding positions ahead of the ETF approval is evident, with Bitcoin still trading within a range but maintaining elevated levels. The Grayscale Bitcoin Trust (GBTC) discount has been steadily narrowing and recently dipped below 10%, marking its first descent to such levels since July 2021.

Shifting our focus to recent token unlock events, dYdX has a significant unlock scheduled for December 1st, with a substantial $500 million at stake, constituting 30% of the total supply. Additionally, there are other notable unlocks on the horizon, including APT on December 12th, involving $176 million, equivalent to 9% of the circulating supply, and 1INCH on December 1st, with $34 million representing 9.5% of the circulating supply.

Looking at digital asset investment products, the past week witnessed a substantial influx of $346 million, marking the highest weekly inflow in a streak of nine consecutive weeks. This robust performance has brought YTD inflows to an impressive $1.5 billion. Notably, a significant portion of these inflows, accounting for 87% of the total, originated from the regions of Canada and Germany.

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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