September 11, 2023

Markets Insights

Economic Calendar

Next FOMC meeting: Sept 20th 2023

  • Probability of a 0bps hike → 93%
  • Probability of a 25bps hike → 7%

The News Room

Ripple Acquires Crypto-Focused Chartered Trust Company Fortress Trust

Ripple has acquired Fortress Trust, a Nevada-based chartered trust company focusing on crypto and Web3. While financial details remain undisclosed, the acquisition's price is believed to be less than the $250 million Ripple spent on Metaco earlier this year. The deal adds a Nevada regulatory license to Ripple's growing collection, which already includes a New York BitLicense and money transmitter licenses in 30 U.S. states.

Founded by Scott Purcell, a veteran in the crypto space and former CEO of Prime Trust, Fortress Trust offers financial and regulatory solutions for blockchain businesses. Monica Long, Ripple's president, views this acquisition as a step towards making Ripple the go-to solution for enterprises seeking blockchain-based value transfer services. Ripple had previously invested in Fortress Trust's parent company, Fortress Blockchain Technologies, in August 2022.

Mastercard Launches Program Make CBDCs as User-Friendly as Traditional Money

In response to the growing global interest in Central Bank Digital Currencies (CBDCs), Mastercard has launched a program aiming to aid central banks in their CBDC ventures. Collaborating with Ripple, Consensys, Fluency, and Fireblocks, the payment giant aims to foster interoperability across various payment mediums and facilitate a smoother transition to digitalized economic frameworks.

Raj Dhamodharan, head of digital assets and blockchain at Mastercard, emphasized the endeavor to develop user-friendly CBDCs while upholding regulatory compliance and consumer protection. The initiative, which aligns with the Bank of International Settlements' strategy, is supportive of both open and closed CBDC architectures, aiming to accommodate the preferences of different central banks. Meanwhile, Visa is also exploring avenues to "bring things on-chain," actively sharing its learnings with central banks worldwide.

Taiwan's Regulator Set to Issue 10 Guiding Principles for Virtual Assets in September

Taiwan's Financial Supervisory Commission for Virtual Currency Management is preparing to release 10 guiding principles for crypto businesses in September, according to a report by CNA. These guidelines will mandate crypto businesses in Taiwan to establish review mechanisms, separate customer payments from their own token holdings, and adhere to anti-money laundering (AML) regulations. Furthermore, unregistered foreign firms will be prohibited from operating in Taiwan. This development is a continuation of the country's efforts to regulate the crypto sector, aligning with global standards set by the Financial Action Task Force and bolstering the registration of crypto platforms. Last year in 2022, the country registered 24 crypto platforms.

Trading Desk Insights

Stock futures started the week on a positive note, with tech equities drawing significant attention following recent downturns. Tesla saw a noteworthy 6% rise in premarket trading after receiving an upgrade from Morgan Stanley, which forecasts a notable rally due to advancements in its autonomous software. Furthermore, Qualcomm's shares surged by over 5%, following their announcement on Monday of a deal to supply Apple with 5G modems until 2026.

The optimistic environment on Monday received a boost from a Wall Street Journal piece on Sunday, suggesting a majority agreement among Fed members to maintain the current rates in their upcoming meeting. Early Monday indications from CME FedWatch tool showed a 93% probability that the Fed will maintain its stance on September 20. However, any subsequent rate hikes for the year remain uncertain.

In the upcoming days, the market's focus will be on crucial inflation data. This comes after a series of last week's economic indicators surpassed expectations, reigniting concerns that the Federal Reserve might adjust rates more than initially anticipated. Market participants remain hopeful for subdued readings on the CPI and PPI, despite anticipated surges attributed to energy-related expenses.

Moving on with the crypto market.

Bitcoin continues to trade lower, currently flirting with the infamous support of $25,000. Volume is building up, meaning there is a possibility that it eventually breaks prices to the downside which would lead us to believe that prices are heading towards 22,500 with a possibility of 21,500 and 20,000 in extension.

Altcoins continue their trajectory lower as the risk off market takes over. One of the biggest laggards this morning would be ARB, CFX, PEPE and XRP. ETHBTC has pulled back from its resistance of 0.064 and is now trading lower towards 0.062 with potential support near 0.0606.

Digital asset investment products witnessed outflows of $59m last week for a fourth consecutive week of outflows totalling $294m and represents 0.9% of total assets under management (AuM). Bitcoin suffered the most, seeing outflows of US$69m last week, while short-bitcoin saw its largest single week of inflows since March 2023, totalling US$15m. Blockchain equities did not escape the negative sentiment, with US$10.8m outflows, marking the 5th consecutive week of outflows.

Technical Charts


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