October 20, 2023

Markets Insights

Economic Calendar

Next FOMC meeting: Nov 1st 2023

  • Probability of a 0bps hike → 98%
  • Probability of a 25bps hike → 2%

The News Room

DTCC Acquires Blockchain Firm Securrency to Advance Institutional DeFi and Digital Assets Strategy

DTCC, a leading player in financial market infrastructure, has agreed to acquire blockchain-focused firm Securrency to bolster its digital assets strategy. The move aims to expedite the creation of a platform to harness institutional DeFi's potential, as stated by DTCC. Following the deal's closure in the upcoming weeks, Securrency will be rebranded as DTCC Digital Assets with its CEO, Nadine Chakar, at the helm.

Although the terms remain undisclosed, the acquisition underscores DTCC's intent to be at the forefront of tokenized assets, digital currencies, and related financial tools. With the capability to process trillions in securities transactions daily, DTCC's venture with Securrency, which recently assisted WisdomTree in launching blockchain-backed funds, seeks to revolutionize the market infrastructure. This will potentially lead to shorter settlement periods, enhanced regulatory supervision, and an enriched investor experience. The increasing interest in tokenization, especially with significant figures like BlackRock CEO Larry Fink endorsing it, emphasizes the growing trend of bringing diverse assets on-chain.

SEC Dismisses Charges Against Ripple CEO and Ex-Executive in Ongoing XRP Lawsuit

The SEC has decided to dismiss the charges against Ripple CEO, Bradley Garlinghouse, and ex-Ripple executive, Christian Larsen, both of whom were facing allegations related to securities law violations concerning Ripple's XRP sales. Garlinghouse expressed relief, indicating that they were unfairly targeted by the SEC. This move by the SEC comes after Judge Analisa Torres denied their request for an interlocutory appeal and their appeal for a trial delay. The SEC and Ripple will discuss potential remedies concerning Ripple's Section 5 violations, with a proposed schedule deadline set for November 9th. Ripple's Chief Legal Officer, Stuart Aldeorty, stated that this decision is not a settlement but an SEC "surrender." Earlier this year, Judge Torres had ruled that Ripple's XRP sales didn't qualify as an investment contract, delivering a setback to the SEC's ongoing case that began in December 2020.

BlackRock Amends Bitcoin ETF Prospectus, Acknowledges Fierce Competition

BlackRock has resubmitted an amended prospectus for its Bitcoin ETF application to the SEC, highlighting competition concerns and providing detailed pricing mechanisms. This follows their initial iShares Bitcoin Trust application on June 15, 2023, and a subsequent refiling in July to incorporate a surveillance-sharing agreement with Coinbase and Nasdaq. The amendments come amidst a surge of competitors, including Grayscale, which recently secured a legal victory over the SEC regarding its Bitcoin Trust conversion to an ETF. BlackRock's latest filing emphasizes the uncertainty of market acceptance and offers deeper insights into its ETF's pricing based on a CF benchmark index. This move by BlackRock follows similar recent amendments by Ark Invest and Fidelity, indicating growing optimism for ETF approvals.

Trading Desk Insights

The equity market has experienced a pullback as the 10-year Treasury yield surpassed the 5% mark, a level unseen since 2007, exerting pressure on risk-sensitive assets. Even with positive inflation data, the escalation in yields is largely accountable for the recent stock market softness. As of now, the S&P 500 has receded by 1.3% for the week, and the Nasdaq has declined by 2.1%.

Addressing the Economic Club of New York, the Federal Reserve Chairman, Jerome Powell, emphasized on Thursday that despite the advancements, inflation is still high. To counteract this, a slowdown in economic growth might be necessary. Furthermore, Powell expressed his view that the current rates are not overly elevated.

In the cryptocurrency realm, Bitcoin showed robust performance, with its value breaching the $30,000 threshold twice this week. The prime cryptocurrency is set to record an 11% weekly surge, its most significant leap since June 23 when it appreciated by 17%. While traditionally, a surge in treasury yields would dampen Bitcoin's momentum, the prospective approval of the inaugural spot bitcoin ETF in the U.S. is serving as a significant tailwind. The ongoing adjustments in filings by multiple entities, addressing previous SEC concerns, is being perceived optimistically by investors.

Another notable observation is Bitcoin's role as a safe haven. With growing apprehensions surrounding the Middle East situation, skepticism about the U.S. banking structure, and general market volatility, both Bitcoin and gold are witnessing upward trends.

On the altcoin front, there's been a rise in momentum. Adding to this narrative, the SEC recently retracted allegations against Ripple Labs' key executives – CEO Brad Garlinghouse and co-founder Chris Larsen – pertaining to the ongoing case accusing the firm of breaching U.S. securities regulations.

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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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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