September 15, 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

Genesis to Halt All Trading Services by Sept. 21

Crypto firm Genesis is systematically shutting down all its trading services, signaling a comprehensive closure amidst turmoil within its parent company, Digital Currency Group (DCG). The company affirmed the decision was voluntary and steered by business considerations, ruling out regulatory pressures. The winding down encompasses both domestic and international spot and derivatives trading through GGC International, Ltd., and the cease of its OTC trading desk for U.S. clients, with a complete halt scheduled for September 21. Despite the ongoing operations cessations, Genesis maintains it will honor open derivatives positions until their expiry and will facilitate transactions needed to manage or close open positions. The shutdown comes amidst a series of challenges including a debt exceeding $3.5 billion, legal disputes involving DCG, and the bankruptcy filing of its lending division.

Three Central Banks Test Swift's CBDC Connector for Cross-Border Payments

Swift, the international financial messaging network, has revealed that three central banks, including the Hong Kong Monetary Authority and the Central Bank of Kazakhstan, are currently beta testing its central bank digital currency (CBDC) connector solution. Developed to ensure interoperability for cross-border payments using CBDCs, the platform underwent its first phase of sandbox testing in March, engaging 18 global financial institutions. Over 4,700 transactions were successfully processed between different blockchain networks during this phase. Swift is now moving to a second phase of sandbox experiments, exploring diverse use cases with over 30 institutions. The development of the CBDC technology by Swift aims to preserve its dominant role in global payments amidst emerging competition like the Bank for International Settlement's Unified Ledger.

European Parliament Passes DAC8 Crypto Tax Reporting Requirements

The European Parliament has given its approval to DAC8, a measure that mandates tax reporting for cryptocurrency transactions across the European Union (EU). With strong support, the rule is on track to become law and is designed to amend the EU Directive on Administrative Cooperation. Under DAC8, crypto-asset service providers will be required to report transactions involving EU clients to the EU's tax authorities. This move aims to facilitate the automatic exchange of information on crypto assets among EU tax authorities. The European Commission estimates that this framework could generate additional tax revenues of €1 to €2.4 billion annually, with reporting expected to commence by January 1, 2026.

Trading Desk Insights

Equity futures are in negative territory Friday morning, but Wall Street is heading for a winning week. The S&P500 and Nasdaq have jumped about 1.1% and 1.2%, respectively, putting them on track for their third positive weeks in four.

On an intraday basis, the S&P has started to pull back this morning and is on its way to reach the gap of 4492 before trending lower towards the next target of 4433. Looking at a daily chart, we can see that the index isn’t too far off from the yearly highs but the technical indicators such as the RSI, aren’t conveying the same confidence in the recent rally. The RSI remains capped by a declining trend line and is only slightly higher than the neutral level of 50.

Bitcoin has pulled back from the declining trend line that has placed pressure on price action since mid July and is now expected to trade lower towards the previous trading range. The level of 26,825 can now be seen as intraday resistance.

ETHBTC dropped by 5% in the last week, signaling that BTC has outperformed ETH in that timeframe. Altcoins remain somewhat flat this morning as traders prefer to stay on the sidelines for now.

Institutional interest in Bitcoin has been on the rise. Entities such as hedge funds, asset management companies, and endowments are increasingly viewing Bitcoin as a viable store of value and an effective means of portfolio diversification. Currently, ETFs, nations, and both public and private enterprises hold approximately $50 billion in Bitcoin. This number is anticipated to grow, especially if a BTC spot ETF is approved, which would likely enhance global adoption.

Technical Charts


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