October 4, 2023

Markets Insights

Economic Calendar

Next FOMC meeting: Nov 1st 2023

  • Probability of a 0bps hike → 69%
  • Probability of a 25bps hike → 31%

The News Room

SEC's Request for Appeal Denied in Ripple Case

The U.S. Securities and Exchange Commission's (SEC) request to appeal its loss against Ripple has been denied by District Judge Analisa Torres, citing the SEC's failure to demonstrate crucial legal questions or substantial grounds for varying opinions. While the judge ruled in July that Ripple breached securities laws by selling XRP directly to institutional investors, it hadn't done so when selling XRP to the general public via exchanges. This decision raised questions regarding the extent of regulatory control over crypto. Although the SEC had planned to halt further decisions pending an appellate court's review, Judge Torres' recent ruling means the case will move forward, with a trial set for April 2024.

Ripple Granted Digital Asset License by Monetary Authority of Singapore

Ripple has secured a Major Payments Institution (MPI) license from the Monetary Authority of Singapore, enabling its subsidiary, Ripple Markets APAC Pte Ltd, to provide regulated digital asset token services in Singapore. CEO Brad Garlinghouse emphasized the strategic importance of Singapore, where they have doubled their staff in the past year and plan further expansion. The license aligns with Ripple's focus on enhancing cryptocurrency adoption in the fast-expanding Asia Pacific region. This comes as other prominent crypto entities such as Circle and GSR also received MPI licenses from the Singaporean authority this year.

Celsius Successor to Receive $450 Million in Cryptocurrency Seed Funding if Restart Plan Gains Approval

The potential successor to the defunct crypto lender, Celsius, named "NewCo", is pushing forward with plans to revive the business, backed by seed funding of up to $450 million in cryptocurrency and zero funded debt. The investment consortium Fahrenheit is set to manage NewCo and is committing up to $50 million for an equity position in the firm. They aim to repay affected customers by year's end and believe that this approach is the optimal recovery solution. The reorganization proposal, which saw over 98% creditor support, awaits approval by Judge Martin Glenn and regulatory bodies. A successful revival would be a first for the crypto industry, however, should the plan be rejected, Celsius could face liquidation, potentially reducing creditor recoveries.

Jump Trading Lost Nearly $300 Million in FTX Collapse, Per Michael Lewis' Book 'Going Infinite'

Jump Trading, a notable market-making firm in the cryptocurrency space, reportedly incurred losses nearing $300 million following the collapse of the FTX crypto exchange, as per Michael Lewis' new book "Going Infinite." The book, which narrates the experiences of Sam Bankman-Fried and the downfall of his exchange FTX, highlights that Jump Trading was among the most significant account holders unable to withdraw their funds during the crisis. Specifically, Jump Trading lost $206 million, while its affiliated trading firm, Tai Mo Shan Ltd., experienced losses exceeding $75 million. According to the book, the revelations come from documents found by Constance Wang, FTX's former COO.

Trading Desk Insights

Stock futures rebound after light jobs data sends yields lower. This comes on the back of Wall Street's losses prompted by strong job openings data, suggesting resilience in the labor market. The Dow lost 1.3%, notching its worst session since March. The S&P 500 tumbled 1.4% and at one point hit its lowest level since June while Nasdaq ended 1.9% lower. Consequently, the Dow's YTD performance turned negative, though the S&P 500 and Nasdaq remain bullish, advancing over 10% and 24% in 2023 respectively.

The recent JOLTS Job Openings data, clocking in at 9.61m—surpassing the 8.81m forecast—catapulted bond yields and saw the Nasdaq tumble by 2% post-release. Traders have their sights set on Friday’s nonfarm payroll at 8:30am EST—a pivotal metric in this climate.

Good news remains bad news in this market environment.

Bitcoin pulled back towards 27,200 after the initial pop on Monday. As the Dollar Index is retracing, we’re seeing the stock market and Bitcoin recover from the recent session lows. As long as prices remain above their 20-day and 50-day moving averages, we should expect further upside.

The inauguration of the ETH futures ETFs left much to be desired. Its lackluster inflow paints a picture of a tepid market and minimal appetite for ETH. The market's anticipation lies with spot ETFs, not their futures counterparts. Given that a BTC futures ETF has been in play for some time, the ETH variant shouldn't significantly sway market dynamics. Historical data supports this: the BTC futures ETF launch massively overshadowed the recent ETH debut, registering a whopping $1.01bn trading volume compared to the paltry $1.96m of the latter. This underscores the seemingly lukewarm desire to bolster crypto portfolios, aligning with the ongoing market consolidation.

The SEC's appeal motion concerning the Ripple case was turned down by District Judge Analisa Torres. Following the announcement, XRP witnessed a 5% uptick. Torres clarified in a concise statement on Tuesday that the SEC couldn't sufficiently demonstrate the presence of pivotal legal questions or substantial grounds for differing opinions. While this particular decision doesn't favor the SEC, the silver lining for the regulatory body is the scheduled trial in April 2024 to address remaining unresolved issues. The SEC might consider pursuing an appeal on the broader case in subsequent stages.

Technical Charts


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