September 19, 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

CitiGroup Plans to Pilot Private Blockchain Services for Institutional Clients

CitiGroup has unveiled a blockchain platform named Citi Token Services, designed to enable institutional clients to engage with digital assets around the clock. This innovation, according to Shahmir Khaliq, the head of global services at Citi, aligns with the aspirations detailed in the Regulated Liability Network whitepaper released in November 2022. It aims to facilitate a financial ecosystem where on-chain transactions, including final settlements in sovereign currencies, are possible 24/7. In collaboration with Maersk, Citi tested the service’s efficiency in offering instantaneous payments to various service providers through smart contracts. The platform seeks to modernize traditional financial guarantees like bank assurances and letters of credit. With Citi seemingly ahead of JPMorgan in this venture, corporate treasurers can anticipate reduced frictions in managing global liquidity in real-time, highlighting the financial industry's gradual shift towards embracing digital asset technologies.

Hut 8 Mining and US Bitcoin Corp Merger Approved by British Columbia Supreme Court

The Supreme Court of British Columbia has approved the merger of Hut 8 Mining and US Bitcoin Corp (USBTC), marking significant progress since the announcement in February 2023. Having secured over 97% approval from Hut 8 shareholders, the onus now shifts to USBTC shareholders for endorsement. While the merged entity will be known as Hut 8 Corp., it will be U.S.-based, and its shares will be featured on both the Nasdaq and Toronto Stock Exchange under the ticker "HUT". Subject to the completion of regulatory formalities, the merger is anticipated to conclude in Q4 2023. This development emerges as a positive trajectory for Hut 8 after witnessing a dip in its revenue and Bitcoin production for Q2 2023, a period during which the company emphasized diversification by partnering with USBTC, a specialist in infrastructure operations.

Nomura's Laser Digital Launches Bitcoin Adoption Fund for Institutional Clients

Nomura's digital asset subsidiary, Laser Digital, has unveiled the Bitcoin Adoption Fund to facilitate long-only Bitcoin exposure to institutional clients, marking the initiation of a series of digital asset investment avenues from the firm. Sebastien Guglietta, the head of Laser Digital Asset Management, highlighted that the endeavor is geared to harness the macroeconomic trend accelerated by technological advancements converting many economic aspects from analog to digital, with Bitcoin being a pivotal player. The new fund will entrust the Komainu, a collaborative venture involving Nomura, Ledger, and CoinShares, with the custody of the client assets. The recent acquisition of operating licenses from Dubai's VARA by both Komainu and Laser Digital has been instrumental in setting the stage for a diversified portfolio of digital asset services and investment instruments.

Trading Desk Insights

Markets pulled back on Tuesday as Wall Street anticipates the Fed's upcoming decision. While the two-day policy meeting kicks off today, the Fed is projected to maintain rates, with futures data from CME Group's FedWatch tool showing a 99% likelihood against a rate hike now and only a 29% chance come November. Key for investors: Wednesday's economic forecasts and insights on inflation and interest rate trajectories.

  • “Although inflation has moved down from its peak — a welcome development — it remains too high,” Powell said.
  • “We are prepared to raise rates further if appropriate and intend to hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective.”

Bitcoin started to pull back after breaking above the declining trend line that was formed in mid-July, reversing the previous trading range that has capped prices for weeks. As long as 26,200 holds, we expect further upside towards the previous high of 28,100.

ETHBTC continues to trade lower, as expected, and is now trading at its lowest level since July 2022, advocating for BTC to continue to outperform ETH in the near future.

Bitcoin put options (bearish bets) surged this September, marking the highest since February. A rise in implied volatility from its summer lows hints at expected market turbulence. Though Bitcoin option volumes have eased from their August peak, they're notably above summer averages, indicating a bolstered demand in options.

Technical Charts


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