October 24, 2023

Markets Insights

Economic Calendar

Next FOMC meeting: Nov 1st 2023

  • Probability of a 25bps ease → 1%
  • Probability of a 0bps hike → 99%

The News Room

BlackRock's iShares Bitcoin Trust ETF Advances, Listed on DTCC

BlackRock, the world's largest asset manager, is advancing preparations for its proposed iShares Bitcoin Trust ETF, now listed on the DTCC's website with the ticker "IBTC." This makes it the first proposed spot Bitcoin ETF to be listed on DTCC, a significant entity in financial market infrastructure. The move follows BlackRock's amendment to its Bitcoin ETF proposal on Oct. 18, which included necessary identifiers and potential launch logistics. Analyst Eric Balchunas from Bloomberg Intelligence views this as a sign that the product's approval might be near.

Meanwhile, Ark Invest and 21Shares have made amendments to their Bitcoin ETF applications, and Grayscale continues its pursuit to convert its Bitcoin Trust (GBTC) into an ETF. The ongoing adjustments and preparations suggest growing momentum in the industry's push for Bitcoin ETFs.

SEC Instructed to Reconsider Grayscale's Spot Bitcoin ETF Proposal

The U.S. Court of Appeals for the D.C. Circuit has formally instructed the SEC to reconsider Grayscale Investments' proposal to turn its GBTC fund into a spot Bitcoin ETF. This move followed the SEC's decision not to appeal the court's August judgment. Grayscale has since filed a new application, but it remains unclear whether the SEC might find another reason for rejection. The court had earlier compared Grayscale's proposal to existing Bitcoin futures ETFs, highlighting their similarities. Meanwhile, other asset management giants such as Fidelity and WisdomTree are awaiting the SEC's nod for their respective spot Bitcoin ETFs. SEC Chair Gary Gensler noted the presence of several such filings under consideration but refrained from commenting specifically on Grayscale's case.

Deutsche Bank and SC Ventures Successfully Execute First Stablecoin Swaps on UDPN

Standard Chartered Bank's SC Ventures and Deutsche Bank have successfully executed the first stablecoin swaps on the Universal Digital Payments Network (UDPN). The transactions involved exchanging USDC and EURS stablecoins through their respective digital currency wallets. The proof of concept saw SC Ventures use UDPN's tools to create decentralized identities and associated digital wallets, while Deutsche Bank utilized a graphical interface for its swaps.

Launched at the World Economic Forum in Davos earlier this year, the UDPN aims to facilitate interoperability among regulated stablecoins, central bank digital currencies, and other digital assets, bridging the gap between digital currencies, banks, and e-commerce platforms. Numerous banks are currently testing the UDPN's sandbox environment for potential future transactions in the digital currency space.

Trading Desk Insights

Tuesday saw a boost in stocks as market participants turned their attention to a new wave of earnings reports, all the while keeping a close watch on the evolving dynamics of Treasury yields. Recent surges in these yields have sparked apprehensions about the overall health of the economy, casting a shadow over the equity market.

At the market close today, Microsoft and Alphabet are slated to unveil their earnings report. Meta and IBM are on deck for Wednesday's market close, with Amazon and Intel set to disclose their results on Thursday post-market. These technological behemoths hold the potential to significantly sway the Nasdaq's trajectory, which could, in turn, ripple through the crypto sector.

In the crypto world, Bitcoin's value momentarily surpassed the $35,000 mark, a milestone last witnessed in May 2022. This surge is attributable to a buoyant mood surrounding the potential of a bitcoin spot ETF and investors seeking refuge from a shaky US economy, which resulted in a surge in short liquidations. This current rally sees Bitcoin ascending nearly 110% since both the year's start and its lowest level in 2022. As per data insights from CoinGlass, Bitcoin underwent a staggering $475 million in short liquidations within the last 24 hours. The SEC's recent decision to forgo an appeal in Grayscale’s litigation before a critical deadline has reignited optimism about a possible green light for a bitcoin-centric ETF in the upcoming months. It's noteworthy that the SEC's interaction with the crypto domain seems to be evolving in a more collaborative direction.

This present upswing seems primarily driven by spot markets coupled with bullish undertones from institutional actors on the CME. Interestingly, there's no significant evidence suggesting a retail-fueled move in the offshore realm. As the rally unfolds, CME BTC futures OI has skyrocketed past 100k BTC for the first time. This bullish phase has, in contrast, diminished offshore positions, with the perp OI contracting by 26,735 BTC just yesterday. In comparison, CME's OI swelled by 4,380 BTC. Such dynamics have elevated CME’s market dominance to a record 25%, swiftly closing the gap with Binance's combined perps and futures offerings.

Technical Charts


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