October 31, 2023

Markets Insights

Economic Calendar

Next FOMC meeting: Nov 1st 2023

  • Probability of a 0bps hike → 100%
  • Probability of a 25bps hike → 0%

The News Room

VanEck Updates Spot Bitcoin ETF Application, Hints at Direct Bitcoin Seeding

VanEck has updated its application for a spot Bitcoin ETF with the U.S. Securities and Exchange Commission (SEC), revealing an anonymous investor's purchase of 50,000 shares using Bitcoin. This move, detailed in the October 27th filing, mirrors a similar language pattern seen in BlackRock’s recent spot Bitcoin ETF filing, though VanEck’s application uniquely suggests potential direct Bitcoin seeding for the product. Financial lawyer Scott Johnsson noted this could be indicative of the firm’s genuine intent or perhaps an oversight.

The amended application outlines various factors that could impact the ETF’s value, such as global Bitcoin supply fluctuations, market sentiment, and competition from other digital assets. This step is part of a broader trend, with firms such as Bitwise Asset Management, ARK Invest, 21Shares, and BlackRock also revising their applications, aiming to address the SEC’s persistent concerns related to market integrity and investor protection. Despite this progress, the SEC has yet to approve any spot Bitcoin ETFs, maintaining its cautious stance due to concerns over potential market manipulation and the need for enhanced regulatory oversight.

Kasikorn Bank Expands Crypto Presence with Satang Acquisition in Thailand

Kasikorn Bank (K-Bank) in Thailand has significantly expanded its footprint in the crypto industry by acquiring 97% of the parent company of Satang crypto exchange for approximately 3.705 billion Thai baht ($102.8 million). The acquisition was carried out through Unita Capital, a newly established subsidiary of K-Bank with a focus on digital asset investments. Following the acquisition, Satang will undergo rebranding to become Orbix, encompassing three new subsidiaries for custodial services, digital asset fund management, and blockchain technology development. This move comes on the heels of K-Bank’s recent launch of a $100 million fund targeting web3, fintech, and AI technologies, and signals a competitive stance in the Thai cryptocurrency landscape where it aims to secure 20% market share by 2024. The Thai market is noted for its high level of institutional support in the crypto sphere, with other major players such as Siam Commercial Bank and Gulf also making significant strides in this domain.

Singapore Partners with UK, Japan, and Switzerland on Digital Asset Initiative

The Monetary Authority of Singapore (MAS) has joined forces with UK, Japanese, and Swiss regulators for Project Guardian, an initiative aiming to foster responsible digital asset innovations across borders. The project targets asset tokenization in sectors like fixed-income, foreign exchange, and asset management, seeking to boost transaction efficiency and processes. Highlighting the need for global regulatory cooperation, the initiative involves 15 financial institutions, including crypto-supportive entities such as JPMorgan and Citi, and regulatory bodies like Japan’s Financial Services Agency and the UK’s Financial Conduct Authority. The participating regulators will engage in policy discussions, risk assessments, and legislative developments for tokenized solutions, alongside promoting universal standards and cross-border digital asset interoperability. This partnership underscores MAS’s commitment to understanding digital asset innovations, with aspirations to develop consistent standards and regulatory frameworks across participating nations, further positioning Singapore as a pro-crypto hub on the international stage.

Trading Desk Insights

Tuesday sees stock futures exhibiting minimal change, wrapping up what has been a challenging month marked by soaring Treasury yields reaching notable highs. Following a noteworthy surge on Monday, the S&P 500 successfully emerged from correction, marking its most significant daily gain since late August. Additionally, the Nasdaq bolstered its position with a 1.2% uptick. However, caution prevails as major indexes like the S&P 500 and Nasdaq seem poised for an October close in negative territory — down by 2.8% and 3% respectively. Notably, this is the S&P 500's first three-month decline since the turbulence of March 2020.

Market participants anticipate a potential short-term rally, noting that stock prices are veering into oversold regions. The commencement of the earnings season might introduce a fresh wave of corporate buybacks.

All eyes are on Wall Street, keenly awaiting the Federal Reserve's impending verdict on interest rates slated for this Wednesday. Current futures pricing hints at a staggering 98% likelihood of rates being maintained at their present benchmarks. On the economic front, hopes are high that the forthcoming October payroll report will showcase a moderation in labor market dynamics.

In international updates, the Bank of Japan has slightly eased its approach to the “yield curve control” (YCC) strategy. This move is perceived as a counterbalance to the Federal Reserve’s liquidity measures. Retaining its short-term policy rate at -0.1%, the bank persists with its negative interest rate regimen. Significantly, there's a shift towards greater flexibility, suggesting yields could surpass the 1% threshold — a deviation from the traditionally dovish YCC approach, showcasing the BOJ in a relatively hawkish light.

On the cryptocurrency front, Bitcoin has made impressive strides with a 30% monthly gain, marking its best performance since January. Prices oscillate within the $33,400 to $35,200 bracket. Strategic moves could hinge on breakouts, either upward to approximately $36,450 or a potential decline toward $31,800, possibly even $31,100.

Moreover, the broader cryptocurrency market is displaying expanding breadth, signaling renewed bullish vigor. This expansion suggests a heightened risk appetite among investors and hints at a sustained bullish momentum, especially as a wider spectrum of tokens partake in Bitcoin's rally.

Highlighting specific crypto performers, SOL (Solana) takes the limelight, boasting a remarkable +70% surge this month and a staggering 265% rise year-to-date. Over the past quarter, SOL has overshadowed its counterparts with a 51% jump, in contrast to the modest 26% gain witnessed by the top 20 cryptocurrencies. Meanwhile, Solana's vibrant community is currently convening at the annual Breakpoint conference in Amsterdam, fostering discussions on governance and ecosystem development.

Technical Charts


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