September 18, 2023

Markets Insights

Economic Calendar

Next FOMC meeting: Sept 20th 2023

  • Probability of a 0bps hike → 99%
  • Probability of a 25bps hike → 1%

The News Room

Boerse Stuttgart Digital and Munich Re to Launch Insured Cryptocurrency Staking Service in 2024

Boerse Stuttgart Digital, a subsidiary of Europe's sixth-largest stock exchange group, is gearing up to launch an insured cryptocurrency staking service in 2024. Collaborating with global reinsurance firm Munich Re, it aims to create a product to minimize slashing risks — the penalties imposed on validators in a proof-of-stake blockchain for misconduct such as breaking network rules or engaging in malicious activities. This initiative follows a trend of prominent financial institutions, including Deutsche Bank and HSBC, venturing deeper into the crypto sector to offer digital asset services. The new service will leverage a license obtained earlier this year from German financial regulator BaFin, enabling Boerse Stuttgart Digital and its clients to earn rewards on stored assets securely.

BitGo and Swan to Launch First BTC-Only Trust Company in the U.S.

BitGo and Swan have revealed plans to establish a BTC-only trust company, aiming to provide custody services exclusively for Bitcoin, separating it from the broader digital asset market. This joint effort, awaiting regulatory approval, merges BitGo's proficiency in custody with Swan's acumen in client onboarding and fraud prevention. This move will pioneer the U.S.'s first Bitcoin-centric trust company.

BitGo's CEO, Mike Belshe, emphasized the significance of differentiating exchange and custody services, mirroring traditional U.S. financial practices. While Swan has previously employed both BitGo and Fortress Trust for BTC storage, the latter's imminent acquisition by Ripple has led Swan to transition its compliance and settlement to Bakkt. The company's commitment to risk reduction is underscored by its focus on isolating Bitcoin from altcoins within its trust. The news follows the fallout from Prime Trust's receivership and its abandoned acquisition by BitGo, which later secured $100 million in funding at a $1.75 billion valuation.

Core Scientific, Celsius settle Texas mining site dispute with $45M deal

Core Scientific has settled its ongoing disputes with Celsius by agreeing to sell its Cedarvale mining location in Texas for $14 million. In addition to this, the American bitcoin miner has also dropped its claims against Celsius, totaling $31 million, bringing the combined settlement to $45 million. This resolution, which is pending court approval, emerges after extensive negotiations between the two entities. As part of the agreement, Celsius will inherit a "partially-developed, non-operational" mining site with 215 megawatts of available power and will receive the site's design plans for construction completion. This settlement comes in the wake of disputes stemming from hosting fee defaults and unpaid bills by Celsius, which led to the termination of their hosting agreement in January 2023. Core Scientific's CEO, Adam Sullivan, expressed satisfaction at the resolution and anticipates his company's emergence from restructuring later this year.

Trading Desk Insights

Equity futures edged down this Monday morning, with the market's gaze fixed on the upcoming Federal Reserve policy decision this Wednesday.

The trading community is largely expecting the Fed to maintain interest rates during this week's policy meeting. The focus for traders will be discerning the central bank's perspective on future inflation. Current data from the CME Group's FedWatch tool indicates a 99% likelihood that the Fed will maintain its current rate stance this Wednesday and a mere 34% chance for a rate hike come November.

The US 10-year yield popped higher last night towards 4.415%, the highest level since November 2007, which might place pressure on risk assets overall, especially if it continues to trade higher.

Many central banks around the world are announcing their interest rate decision this week including the US, Switzerland, England and Japan.

Bitcoin has broken out of its previous range and is aiming to reach the previous high of 28,100. It seems that the recent price action got a boost of confidence as the probability of a rate hike at this week’s meeting has fallen to 1%.

According to CoinDesk, a crypto whale traded 92,600 out-of-the-money call options for ETH worth appx $150m with strike prices of $2,200 with a December expiry and a strike price of $2,000 with an October expiry.

In other news, New York’s financial regulator wants cryptocurrency companies regulated in the state to be more transparent about how they list and delist crypto coins.

Finally, digital asset investment products saw outflows totalling US$54m last week, with outflows for 8 out of the last 9 weeks that aggregate to US$455m.

Technical Charts


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