November 8, 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

USDC Stablecoin Issuer Circle Considering IPO in 2024: Bloomberg

As per Bloomberg sources, Circle, the company behind the USDC stablecoin is reportedly considering going public in 2024. The stablecoin issuer, currently with a market capitalization of over $24 billion, is in discussions with advisors about a potential initial public offering (IPO). Although the valuation Circle might seek is not clear, the company was previously valued at $9 billion during an attempted public listing through a SPAC deal in 2022, which ultimately did not go through. Circle's strategic goal has been to become a public company in the U.S., and its investor base includes major financial institutions such as Goldman Sachs, Fidelity, and Blackrock. After reaching a market cap peak of nearly $56 billion, USDC has seen a significant decrease since June 2022.

Marathon Digital Pushes into Paraguay Amid Ongoing Expansion

Marathon Digital, a leading Bitcoin miner, is advancing its diversification and cost-reduction strategy ahead of the anticipated Bitcoin halving in April 2024. The company's latest initiative is a 27-megawatt mining project in Paraguay, leveraging the country's surplus hydro energy near the Itaipu Dam. This move, aiming for 1.1 exahash per second of computing power, follows their successful international deployment in Abu Dhabi.

With the Bitcoin halving event set to slash mining rewards by half, Marathon is proactively seeking ways to lower operational costs and mitigate financial pressure by tapping into cheaper and more reliable power sources abroad. This geographical diversification not only aims to improve margins and reduce business risks but also contributes to further decentralizing Bitcoin's network hash rate while potentially aiding host countries in economic and environmental aspects.

Klaytn Plans to Explore Ship-Asset Tokenization with Korindo and NEOPIN

Klaytn, a Layer 1 blockchain network developed by South Korean tech giant Kakao, is exploring real-world asset (RWA) tokenization in collaboration with PT Pelayaran Korindo and NEOPIN. This venture focuses on tokenizing ship-related assets, aiming to revolutionize ship finance by making it more accessible to individual and institutional investors.

Tokenization of ship assets, such as financing shipbuilding and purchasing by using ships as collateral, is expected to significantly improve liquidity and diversify investment options in web3-based finance. While still in the memorandum of understanding phase, this initiative demonstrates Klaytn's commitment to applying blockchain technology to practical service-building processes and expanding the scope of investment in the digital asset space.

Trading Desk Insights

U.S. equity futures hovered around the breakeven point on Wednesday, pausing after the S&P 500 and Nasdaq both locked in their most extended runs of consecutive gains since November 2021 the day prior.

On the housing front, mortgage rates in the U.S. experienced their sharpest one-week decline in over 12 months, prompting an uptick in mortgage applications for the first time in four weeks. This activity is largely attributed to the latest U.S. Treasury issuance details, the Federal Reserve's more accommodative stance noted in their November FOMC comments, and signs of deceleration in the employment sector. Purchase applications edged up by 3% from the prior week, yet remained 20% below the levels seen a year earlier.

In crypto assets, Bitcoin's ascent has momentarily stalled, with the cryptocurrency maintaining a narrow trading range within its upward trend channel, struggling to breach the $36,000 level. Immediate intraday support is observed near $34,250, and the RSI faces resistance from a descending trend line, suggesting a cooling off of the recent bullish drive.

Turning to Ethereum, the ecosystem's revenue is witnessing a recovery from its lows, potentially indicating a pivot point for ETH. Following a trough in early October, Ethereum's weekly revenue from network transaction fees has bounced back, registering above $30 million for two consecutive weeks. This recovery coincides with the asset's price touching a seven-month low and its comparative valuation against Bitcoin dropping to a 15-month low. Increased capital flow from Bitcoin to alternative cryptocurrencies has catalyzed user engagement on Ethereum, underpinning a number of DeFi protocols and decentralized exchanges (DEXs). The Ethereum network recently processed $250 billion in asset transfers in one week, the highest since the regional banking distress in mid-March, and a substantial increase from the $105 billion in late August. Moreover, on-chain data reveals that Ethereum has shifted to a deflationary state over the past week, with more ETH being burned than minted, after two months of net inflation.

Technical Charts


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