September 12, 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

Standard Chartered's Crypto Subsidiary Zodia Custody Launches Operations in Singapore

Standard Chartered's cryptocurrency storage subsidiary, Zodia Custody, has officially begun operations in Singapore under the entity "Zodia Custody (Singapore) Pvt. Limited", appointing Kai Kano, former Bitgo managing director, as its inaugural CEO. While cryptocurrency custody is yet to be a licensed activity in Singapore, Zodia aims to lead the market as regulations become clear. This move represents a notable fusion of traditional banking with digital assets in Singapore. Zodia Custody is also operational in the U.K., Ireland, and Luxembourg, with an application awaiting approval in Japan. Moreover, Standard Chartered is actively collaborating with the Monetary Authority of Singapore on Project Guardian, focusing on asset tokenization and the launch of a token offering platform for asset-backed security tokens.

Steven Kokinos Nominated to Lead New Entity Emerging From Celsius Bankruptcy

According to recent court documents, bankrupt crypto lending platform Celsius has nominated former Algorand CEO Steven Kokinos to helm the new company set to take over its business operations. Kokinos, who has a prolific background with over 25 years in establishing and operating companies across various sectors including crypto, is also the co-owner of Fahrenheit Holdings and Arrington Capital. The potential board for the emerging entity lists other notable individuals including two co-chairs of the Celsius Creditors Committee and executives from Fahrenheit and Arrington Capital.

As part of the ongoing bankruptcy proceedings initiated in July 2022 during a significant market downturn, a series of essential documents and agreements outlining the Celsius liquidation strategy have been filed in court. Currently, Celsius creditors are voting on the proposed acquisition of the company by Fahrenheit, a process set to finalize later this September. The troubled journey of the lending platform saw it grappling with charges from U.S. authorities, including the SEC, and measures such as asset freezing and transaction prohibition enforced against its co-founder and CEO, Alex Mashinky.

SEC Chair Gary Gensler Reiterates Stringent Views on Cryptocurrency Regulation Ahead of Oversight Testimony

SEC Chair, Gary Gensler, in his upcoming testimony to the Senate Banking Committee, remains unwavering in his stringent views on cryptocurrencies. In his pre-submitted remarks, Gensler draws parallels between the current crypto environment and the regulatory landscape of the 1920s, emphasizing that widespread non-compliance in the crypto industry has led to numerous issues. While the crypto sector continues to grapple with regulatory uncertainties in the U.S., Gensler reiterates that existing securities laws are adequate for crypto regulation. By invoking the Howey Test, he suggests most crypto tokens likely qualify as investment contracts.

Although Gensler has been ambiguous about classifying Ethereum as a security or commodity, he hinted in a past interview that almost every cryptocurrency, except Bitcoin, might be considered a security. The debate over such classifications has significant implications, determining whether these tokens fall under the jurisdiction of the SEC or the Commodity Futures Trading Commission.

Trading Desk Insights

Stock futures experienced a downturn during Tuesday morning's trading session, primarily influenced by the upward surge in oil prices. Major players in the tech and cloud sectors, such as Amazon, Google-parent Alphabet, and Microsoft, all exhibited declines in premarket trading. The elevated oil prices additionally cast a shadow on market sentiment, giving rise to concerns about persistent inflationary pressures and potential deceleration in global economic activity. Notably, U.S. crude prices reached their highest levels since November of the preceding year.

Market participants are eagerly awaiting forthcoming pivotal inflation data scheduled for release later in the week. The consumer price index is anticipated on Wednesday, while the producer price index is scheduled for Thursday, both of which hold significant importance in shaping market sentiment and direction.

The S&P500 is pulling back from resistance and is trending lower towards the gap near 4492. As long as the index futures doesn’t break above 4555, we expect a continuation of the downtrend towards 4492 and 4433 in extension.

In a recent analysis spanning the past two months, we've observed a notable decrease in trading activity for both BTC and ETH. Specifically, the combined average daily volumes for spot and futures markets have seen a 30% reduction, dropping to $40 billion. To put this into perspective, the second quarter of 2023 recorded a robust daily average of $54.6 billion. This shift underscores the dynamic nature of the crypto markets and may present opportunities for strategic adjustments in trading strategies.

Numerous reports are emerging concerning an impending downturn in the altcoin market. FTX, in particular, appears poised to offload a significant sum of cryptocurrency, estimated at $3.4 billion, in order to facilitate the conversion of digital assets into fiat currency for its users. FTX has publicly articulated its intention to liquidate approximately $200 million worth of crypto assets on a weekly basis. Simultaneously, the crypto venture capital (VC) sector finds itself confronting substantial pressure to deliver returns to its investors, compelling them to engage in extensive divestment of altcoins to realize cash reserves.

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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