September 20, 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

Grayscale Investments Files for New Ether Futures ETF

Grayscale Investments, a crypto asset manager, has filed for a new exchange-traded fund (ETF) that tracks Ether futures. This comes after Grayscale recently won a legal battle against the U.S. Securities and Exchange Commission (SEC) regarding its application for a spot Bitcoin ETF. The company’s latest filing with the SEC falls under the Securities Act of 1933, which governs commodities and spot Bitcoin ETFs. Previously, Grayscale had filed for a separate Ether futures ETF under the Investment Company Act of 1940, which is the regulation most securities-based ETFs are registered under. The SEC has previously approved Bitcoin futures ETFs registered under both acts. Other major asset managers, such as BlackRock, Franklin Templeton, and WisdomTree, have also filed for crypto ETFs over the summer.

New York State Department of Financial Services Introduces Enhanced Regulations for Virtual Currency Businesses

The New York State Department of Financial Services (NYDFS) has introduced enhanced regulations for virtual currency businesses in the state. Key among the new rules is an emphasis on cryptocurrency delistings, enabling companies to promptly remove coins that pose emergent risks or are misused, as detailed by NYDFS Superintendent Adrienne Harris. This guidance builds upon the foundational rules established in 2020, which provided a framework for crypto firms to introduce and list new digital currencies. The NYDFS also recognizes "greenlisted" cryptocurrencies, such as Bitcoin and Ethereum, which companies can list without prior authorization. Furthermore, companies will now be obliged to form a delisting policy and adhere to stricter risk assessment standards when listing coins. Open for public feedback until October 20, 2023, these rules for greenlisted tokens are effective immediately. Notably, New York maintains rigorous cryptocurrency regulations, mandating a BitLicense or trust company charter for operations in the state.

Blockchain Capital Raises $580M for Two New Investment Funds

Blockchain Capital has secured $580 million for two fresh investment funds, marking its most substantial fundraising in a decade. One fund aligns with its traditional early-stage focus, while the other, termed an "Opportunity Fund," targets later-stage financing opportunities. This significant capital influx during a bear market underscores investor confidence in the firm's long-term vision, with Blockchain Capital executives noting the continued emergence of promising innovators, especially during challenging economic climates. While the crypto financing landscape has witnessed a 75% decline in H1 2023 compared to the previous year, Blockchain Capital remains actively engaged in sectors such as DeFi, gaming, infrastructure, and consumer-focused segments. The firm's investment portfolio reflects an emphasis on scalability and technological advancements, as evidenced by their backing of Matter Labs and Risc Zero.

Trading Desk Insights

Stock futures exhibited a bullish trend this Wednesday morning, preceding the Federal Reserve's anticipated interest rate announcement. This comes as crude oil prices showed signs of moderation and as Treasury yields retreated from their peak levels in years.

In related financial updates, the Bank of England's forthcoming stance on monetary policy has become highly unpredictable, especially after the unexpected downturn reported in the August inflation figures. Contrary to the expected rise to 7%, the CPI for August registered a slight decline to 6.7% from July's 6.8%. Earlier market estimations indicated an 80% likelihood of a 25 basis point rate increment to 5.5% on Thursday – a level not seen since December 2007. However, following the release of the CPI data, the odds favoring the Bank to maintain the rate at 5.25% escalated from 20% to over 57%.

All eyes are on the Federal Reserve today, with a majority speculating a stable rate stance at 2 p.m. ET. Nonetheless, the investment community remains keen on gleaning insights from the economic forecast summary and Federal Reserve Chair Jerome Powell's press briefing. This focus arises from the overarching question of a potential rate hike later this year, given that the Fed already increased its benchmark rate in July to a 22-year peak. Presently, Fed futures highlight a marginal 29% chance of a rate hike in November.

Looking at BTCUSDT, we can tell that prices have been slowly grinding higher within a short-term rising trend channel, advocating for further upside. We maintain our intraday support at 26,200 but we’re also eyeing the 26,650 level as a warning sign of the recent uptrend.

Prices recently broke above the 20-day moving average and are now testing the 50-day. The break and close above 27,750 would be crucial to attract more buyers in the market.

In other news, records indicate that the proportion of dormant Bitcoin supply, spanning 1 to 5 years, is at unprecedented levels. Analyzing the blockchain, it's apparent that Bitcoin aficionados are in an accumulation phase, leading to a decrease in exchange reserves. Significantly, nearly 69%, which equates to 36.8 million wallet addresses, have retained their BTC for over a year, underlining a promising trend for digital assets.

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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