November 30, 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

Pando Asset Joins Race for Spot Bitcoin ETF as BlackRock Engages with SEC Again

Swiss asset manager Pando Asset has filed an S-1 form with the U.S. Securities and Exchange Commission (SEC) to launch a spot Bitcoin ETF, aiming to list it on the Cboe BZX Exchange with Coinbase as its custodian. This ETF, which would use CME's CF Bitcoin Reference Rate for pricing, adds to Pando's offerings of exchange-traded products tracking cryptocurrency prices on the SIX Swiss Exchange. However, the SEC has not yet approved any spot crypto ETFs, having delayed applications from several major asset management firms including BlackRock, Fidelity, and others.

Recently, the SEC moved applications from Franklin Templeton and Hashdex to a public comment period, indicating a possible acceleration in the review process. Furthermore, recent SEC meetings with Invesco and BlackRock have focused on concerns around the in-kind model and its balance sheet impacts. BlackRock has proposed a solution addressing these concerns, suggesting a modified approach involving cash transfers to resolve balance sheet issues for U.S.-based market makers. This development reflects the ongoing industry efforts to meet regulatory standards for the approval of spot Bitcoin ETFs.

FTX Gets Court Approval to Sell $873M Worth of Grayscale, Bitwise Trust Assets

The FTX estate, following its bankruptcy, received court approval to sell trust assets valued at approximately $873 million, including shares in Grayscale and Bitwise investment funds. This decision, as detailed in a Delaware bankruptcy court document, allows FTX to proceed with the sale based on their business judgment. To facilitate this process, the court has extended the role of Galaxy, a crypto investment firm previously appointed to manage FTX's substantial digital asset holdings. The value of these trust assets, primarily comprising shares in various Grayscale funds and a Bitwise crypto index fund, has increased from $744 million (as of October 25) to about $873 million, owing to a narrowing discount of the Grayscale Bitcoin Trust (GBTC) and a rally in cryptocurrency prices. This development comes in the wake of FTX's bankruptcy in November last year, triggered by a CoinDesk report exposing the precarious financial situation of its sister trading firm, Alameda Research.

Crypto Custody Firm Copper Launches Institutional Trading Platform for Tokenized Securities

Crypto custody firm Copper has launched Copper Securities, a new brokerage platform in the United Arab Emirates designed for institutional trading of digital assets. This platform, enhanced by the recent acquisition of UAE-based blockchain brokerage firm Securrency Capital, integrates a suite of blockchain-based financial and custodial services, with plans to add securities financing and payments applications within the next year. Copper Securities will offer access to tokenized securities in over 90 global markets, aiming to streamline traditional market operations using blockchain technology and smart contracts. CEO Dmitry Tokarev emphasized that this launch in the UAE represents a strategic move towards transforming capital market infrastructure, promising increased transparency, efficiency, and accessibility for institutional investors.

Trading Desk Insights

In the realm of equities, this Thursday morning showcased a mix of market dynamics, even as Wall Street approaches the conclusion of November with its most robust monthly gains in more than a year. Notably, the S&P 500 and Nasdaq are currently on course to record their most outstanding monthly performances since July 2022.

Traders were deeply engrossed in assessing fresh inflation data, which has sparked optimism about the Federal Reserve's potential to commence rate cuts in the forthcoming year. The data disclosed earlier today revealed that the PCE price index, esteemed as the Federal Reserve's favored metric for gauging inflation, exhibited a rise in line with expectations for October, registering a growth of 0.2% MoM and  3.5% YoY. These figures could serve as a reason for the Fed to retain its current interest rate stance before contemplating a reduction in 2024.

Turning our attention to the cryptocurrency domain, Bitcoin appears to be retracing from the upper boundary of a rising wedge pattern, implying that a pullback is in sight towards our downside targets. Our projections anticipate a retreat in prices towards our intraday support level at 36,700. On another note, ETHBTC may have garnered some buying interest and might potentially embark on a 4% increase towards 0.0564.

In other news, reports have emerged regarding a significant buyer, who happens to be the 74th largest holder of BTC, accumulating a substantial 11,270 BTC with a total valuation of $424 million since November 10th. These transactions took place within the price range of $36,000 to $38,000.

Furthermore, MicroStrategy, a prominent technology firm, has recently raised its Bitcoin holdings by 10%, buying $600 million worth of BTC during November at an average price of $36,785. Also, the tech company is contemplating a capital raise of up to $750 million through the issuance of common stock. As of now, MicroStrategy possesses a substantial BTC stash comprising 174,530 BTC, with an average acquisition cost of $30,250.

Lastly, it's worth noting that the world's largest Bitcoin futures ETF, known as $BITO, has garnered a noteworthy $1.5 billion in assets under management (AUM), surpassing the highs achieved in 2021. ProShares, the issuer of $BITO, reports an average daily trading volume of $160 million since its inception, placing it in the top 5% of all U.S. ETFs. The impending approval of a spot ETF is likely to attract heightened institutional interest, given its close correlation to Bitcoin's price movements.

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.

The information on which the analysis is based has been obtained from sources believed to be reliable such as, for example, the company’s financial statements filed with a regulator, company website, company white paper, pitchbook and any other sources. While Secure Digital Markets has obtained data, statistics, and information from sources it believes to be reliable, it does not perform an audit or seek independent verification of any of the data, statistics, and information it receives.

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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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