November 9, 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

U.S. SEC Said to Open Talks with Grayscale on Spot Bitcoin ETF Push

Grayscale Investments is currently in discussions with the U.S. Securities and Exchange Commission (SEC) regarding the conversion of its Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin exchange-traded fund (ETF). Following a court ruling that found the SEC's initial rejection of the application to be "arbitrary and capricious," the case has been sent back to the regulator for reevaluation. Grayscale's chief legal officer Craig Salm highlighted ongoing constructive engagement with the SEC's Division of Trading and Markets, emphasizing that the approval of the ETF is seen as a question of 'when' rather than 'if.' The SEC has not commented on the discussions, and Chair Gary Gensler has avoided providing specifics while awaiting staff recommendations. The industry views the potential approval of a Bitcoin ETF as a significant step that could facilitate mainstream investor access to digital assets.

Standard Chartered and SBI Holdings Establishing $100M Investment Firm Targeting Crypto Startups

Standard Chartered, through its venture arm SC Ventures, is partnering with Japanese financial services firm SBI Holdings to create a $100 million investment company focusing on crypto startups. This joint venture, to be based in the UAE, will concentrate on market infrastructure, risk and compliance, decentralized finance (DeFi), and tokenization. Standard Chartered's choice of the UAE, and specifically Dubai, for its crypto ventures is influenced by the region's advanced regulatory framework. This initiative follows Zodia Markets, a digital asset marketplace majorly owned by Standard Chartered and supported by SBI Holdings, receiving preliminary approval for crypto broker-dealer operations in Abu Dhabi in September.

Ark Invest Launching New Suite of Digital Asset ETFs with 21Shares

Ark Invest, in partnership with 21Shares, is poised to debut a series of new ETFs aimed at providing investors with diversified options for integrating digital asset exposure into their portfolios. This suite, which will be listed on the Cboe, includes five products set to trade next week and focuses on Bitcoin and Ethereum futures contracts, as well as public equities tied to the blockchain industry. Despite this development, Ark has clarified that these funds do not offer direct investment in digital assets or spot Bitcoin, and those desiring direct exposure should look elsewhere. The crypto and finance sectors are closely monitoring the SEC's pending decision on spot Bitcoin ETFs, with anticipation of such approvals potentially driving recent increases in Bitcoin's price.

Bitcoin Miner Marathon Digital Beats Q3 Earnings Estimates, Misses on Revenue

Marathon Digital, a leading North American Bitcoin miner, outperformed earnings expectations in Q3, reporting earnings of $0.35 per share against an anticipated loss of $0.11 per share, although it slightly missed revenue targets with $97.8 million against a projected $99.6 million. The company increased its Bitcoin production to 3,490 BTC, significantly up from the previous year's Q3, and sold two-thirds of its Q3 Bitcoin yield to cover operating expenses. Looking ahead, Marathon Digital aims to expand its Bitcoin mining power to 26 exahashes per second by the end of 2023, positioning itself for a 30% growth in the next year, potentially overtaking Core Scientific as the largest publicly traded mining company by hashrate.

Trading Desk Insights

Equity futures edged higher in early Thursday trading, adding to its longest rally in over a year. Although gains were slight — with the S&P 500 up a mere 0.1% — the index celebrated its eighth consecutive day of wins, a streak not seen since November 2021. Nasdaq marginally advanced by 0.08%, achieving its ninth straight day in the green, its most prolonged period of gains in two years. Market participants now turn their focus to the upcoming commentary from Federal Reserve officials, with Chair Jerome Powell's insights being highly anticipated.

In the cryptocurrency arena, Bitcoin has shattered its previous trading range, soaring to an 18-month peak near $38,000 amidst growing enthusiasm over a potential ETF. This sharp increase in Bitcoin's value triggered a substantial short squeeze, with short liquidations soaring by 380% to $465 million over the last 24 hours, while trading volume in the same period spiked by 165% to $86 billion. Typically, Ethereum and other alternative cryptocurrencies tend to rally following Bitcoin's lead.

Ethereum has breached the $2,000 mark for the first time since April, coinciding with the registration of an iShares Ethereum Trust by Delaware’s Division of Corporations. This follows the pattern observed with the iShares Bitcoin Trust, which was registered shortly before BlackRock's application for a Bitcoin ETF. BlackRock has yet to make an official statement regarding this development.

Technical Charts


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