November 3, 2023

Markets Insights

Economic Calendar

Next FOMC meeting: Dec 13th 2023

  • Probability of a 0bps hike → 90%
  • Probability of a 25bps hike → 10%

The News Room

MicroStrategy Increases Bitcoin Holdings with $5.3 Million Purchase Amidst Price Surge

In October, MicroStrategy purchased an additional 155 Bitcoin for $5.3 million, capitalizing on the cryptocurrency's price surge during the month. Michael Saylor, the company's Chairman, announced that their total Bitcoin holdings have reached 158,400. Previously, from August 1 to September 24, MicroStrategy had acquired 5,445 Bitcoin at an average price of $27,053 each. The October surge in BTC prices, approaching $35,000, positions the company favorably given their recent acquisitions. Despite a revenue increase of 3.3% to $130 million in the third quarter, MicroStrategy reported a substantial net loss of $143.4 million, attributed mainly to a $109.6 million provision for income taxes, reflecting changes in the valuation allowance on their deferred tax asset due to Bitcoin impairment. Despite these financial results, the company's share price was relatively stable post-earnings release, and their strategy to continue acquiring and holding Bitcoin is bolstered by the anticipation of growing institutional adoption.

Sam Bankman-Fried Guilty on All 7 Counts in FTX Fraud Trial

Sam Bankman-Fried, the founder and former CEO of FTX, has been found guilty by a New York jury on all seven counts of fraud after a five-week trial, potentially facing up to 115 years in prison with sentencing set for March 2024. U.S. Attorney Damian Williams labeled the offense as one of the largest financial frauds in American history. Despite the verdict, Bankman-Fried's defense, led by attorney Mark Cohen, plans to appeal, maintaining his innocence and intention to fight the charges. The jury deliberated for a short period before returning a unanimous guilty verdict.

Throughout the trial, federal prosecutors depicted him as deliberately misusing around $8 billion of customer funds for various personal investments, while his defense argued he was simply an overworked entrepreneur who misunderstood the ownership of the company funds. Bankman-Fried was charged with wire fraud and conspiracy to commit wire fraud against FTX's customers, wire fraud and conspiracy to commit wire fraud against Alameda's lenders, conspiracy to commit securities fraud against FTX's investors, conspiracy to commit commodities fraud against FTX's customers, and conspiracy to commit money laundering.

XRP Gains Approval from Dubai Financial Services Authority

Ripple has obtained the Dubai Financial Services Authority's (DFSA) approval to use its XRP token in the Dubai International Financial Centre (DIFC), reinforcing its expansion in the Middle East. This nod from the DFSA allows licensed virtual asset firms in the DIFC to use XRP, adding to the previously approved Bitcoin, Ethereum, and Litecoin, with Toncoin also gaining approval. Ripple's commitment to the region is underscored by its DIFC-based MENA headquarters and the fact that a significant portion of its customers are from the area. Furthermore, Ripple has recently partnered with the National Bank of Georgia for a pilot project on a digital version of the Georgian lari, aiming to explore applications in various sectors, and is actively involved in over 20 other countries with similar initiatives.

Trading Desk Insights

Equity futures ticked upward on the back of a softer-than-expected jobs report, positioning the market for its most robust week of gains in 2023. The S&P 500 is marching towards a 5.6% weekly increase, with the Nasdaq on track for a 5.8% rise, setting both up for their most impressive performance since November of the previous year.

Friday's labor data, falling short of consensus forecasts, may signal that the Federal Reserve's aggressive rate hikes are starting to bite, potentially marking a cooldown in their inflation-taming efforts. The addition of 150,000 jobs in October trails the predicted increase of 178,000 and is notably less robust than September's surge of 297,000. The uptick in the unemployment rate to 3.9% further underscores this trend, against the steadier 3.8% anticipated.

Turning to the cryptocurrency sphere, Bitcoin is reverting to a key ascending trend line on the 4-hour chart, which has been guiding its uptrend since October 15. The currency's trajectory shows consistent higher highs and lows—a textbook bullish pattern. However, traders should keep an eye out for potential bearish signals, such as a fall through previous pivot lows or a break below the trendline, which could spell trouble for the trend's sustainability.

In a broader perspective, Bitcoin's network has crossed a milestone, settling over 40 million transactions in a single quarter—a first since its inception. This increased network activity underscores the growing utility demand for Bitcoin, bolstering its long-term value proposition beyond just a store of value.

In regulatory news, the spotlight remains on Sam Bankman-Fried, the founder of FTX, who has been convicted on all seven counts of financial misconduct and now confronts the grim prospect of up to 115 years behind bars. The prosecution's narrative was bolstered by testimonies from individuals once part of Bankman-Fried's close-knit circle. In a resolute statement, the U.S. attorney for the Southern District of New York condemned the actions as "one of the greatest financial frauds in American history," emphasizing the judiciary's zero tolerance for such deceitful schemes.

Technical Charts


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