September 26, 2023

Markets Insights

Economic Calendar

Next FOMC meeting: Nov 1st 2023

  • Probability of a 0bps hike → 74.5%
  • Probability of a 25bps hike → 25.5%

The News Room

Leaked Documents Reveal Microsoft’s Plans to Bring Crypto Wallets to Xbox

Leaked documents suggest Microsoft may integrate cryptocurrency wallets into its Xbox gaming console, as per the Xbox May 2022 roadmap. The leak, inadvertently tied to FTC's legal action over Microsoft's $69 million Activision Blizzard acquisition, also hinted at new Xbox models and features. Though Phil Spencer, head of Xbox, noted some plans have changed, the crypto community, with Tyler Winklevoss emphasizing the gaming industry's scale, remains optimistic about potential integrations, which could foster new cryptocurrency use cases. Despite the speculation, no official confirmation from Microsoft has been provided. This follows Microsoft's August collaboration with Aptos Labs to advance web3 ecosystem capabilities.

Celsius Creditors Vote in Favor of Reorganization Plan

The majority of affected creditors in the Celsius bankruptcy case have overwhelmingly voted in favor of a proposal that aims to return crypto assets to them and allocate equity in a newly formed company. The approval rate for the plan exceeded 98%, as reported by bankruptcy firm Stretto. The U.S. Bankruptcy Court for the Southern District of New York is slated to review and provide final rulings on the proposal in a hearing on October 2.

This plan, endorsed by the Official Committee of Unsecured Creditors, outlines the distribution of approximately $2 billion in Bitcoin and Ether to creditors, along with equity distribution in the new entity, dubbed 'NewCo.' NewCo, under the management of the Fahrenheit Group, intends to extend the Bitcoin mining ventures of the debtors, stake Ethereum, and explore new, regulatory-compliant, value-enhancing business avenues. This development follows the bankruptcy filing by Celsius last year amid accusations by the SEC of fraudulent activities and unregistered crypto asset securities sales, leading to a legal dispute against the firm and its former CEO Alex Mashinsky.

Chase U.K. to Block Crypto Payments Citing Fraud, Scams

Chase Bank has notified its UK clients that it will cease processing payments related to cryptocurrencies starting October 16, as per an email to customers. This move, grounded in concerns over fraudsters exploiting crypto assets for large-scale theft, resonates with a broader hesitancy among UK banks towards crypto transactions, driven by the inherent risks. Despite the Financial Conduct Authority (FCA) facilitating dialogues between banks and crypto entities, finding a crypto-amicable bank remains a challenge in the region. Chase has advised customers interested in crypto investments to seek alternative banks or providers.

Trading Desk Insights

In Tuesday's trading session, stock futures indicated a downward trend, continuing September's market challenges which were evident even after the recent positive session. This trend would further contribute to the market's monthly decline. One of the main drivers behind the market's downward pressure this month is the Federal Reserve's indication of limited rate cuts in the upcoming year. As a result, the 10-year Treasury yield surged to its highest since 2007.

Furthermore, investors are closely monitoring discussions in Washington this week. The primary concern is to prevent a potential government shutdown, which could be imminent by Oct. 1 if there's no consensus in Congress regarding a spending bill.

In a recent CNBC interview, JPMorgan Chase CEO Jamie Dimon advised investors and the general public to anticipate elevated oil and gas prices along with higher interest rates. Nevertheless, he remains confident that the U.S. economy can navigate through these potential challenges.

Looking at Bitcoin, prices on an intraday basis are capped by a declining trend line and continue to trend lower and are now trading within the previous trading range between 25,500 and 26,500. This range of prices should provide support in the short term. On the daily chart, the RSI has broken below 50 while prices broke below their 20-day moving average. It’s important to note that moving averages don’t provide any significant signal when prices are stuck in a range.

In recent developments, Chase, a prominent bank in the U.K., will reportedly halt customer transactions related to cryptocurrency assets beginning October 16th, with concerns over potential fraud and scam activities.

Bernstein analysts project that the cryptocurrency domain could evolve into a regulated asset management industry, commanding upwards of $650 billion in assets under management (AUM) within the next five years. This represents a significant growth trajectory, especially when compared to its current status as a 'cottage industry' with an estimated $50 billion in AUM, which is merely 4% of the existing cryptocurrency market size.

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.

The information on which the analysis is based has been obtained from sources believed to be reliable such as, for example, the company’s financial statements filed with a regulator, company website, company white paper, pitchbook and any other sources. While Secure Digital Markets has obtained data, statistics, and information from sources it believes to be reliable, it does not perform an audit or seek independent verification of any of the data, statistics, and information it receives.

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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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