September 29, 2023

Markets Insights

Economic Calendar

Next FOMC meeting: Nov 1st 2023

  • Probability of a 0bps hike → 83%
  • Probability of a 25bps hike → 17%

The News Room

Valkyrie Becomes First US ETF to Include Both Ether and Bitcoin Futures

Asset manager Valkyrie has begun purchasing Ether (ETH) futures contracts following its approval to modify its existing Bitcoin futures ETF into a dual-investment vehicle. The Valkyrie Bitcoin Strategy ETF (Nasdaq: $BTF) is now the first US ETF to cover both Ether and Bitcoin futures contracts. This development comes as Valkyrie updated its prospectus and risk disclosures pertinent to Ether futures, thereby gaining approval ahead of other firms. The official transition into a combined ETH and BTC futures ETF is set for Oct. 3, under the new name Valkyrie Bitcoin and Ether Strategy ETF, keeping the ticker BTF. This move places Valkyrie in the league with several other entities moving towards launching ETH futures ETFs. Meanwhile, asset management giant VanEck has also announced its preparations to unveil its Ethereum futures ETF, indicative of a growing interest in Ethereum-based financial products within the industry.

SEC Initiates Additional Review Procedures for Spot Bitcoin ETF Proposals

The Securities and Exchange Commission (SEC) on Thursday instigated additional review procedures to decide on the approval of spot Bitcoin ETF proposals from BlackRock, Invesco, Valkyrie, and Bitwise, marking further delays in the ongoing review processes. Citing the need to address legal and policy issues flagged by the proposed rule change, the SEC highlighted that this step doesn't reflect any conclusions on the issues at hand. Valkyrie, already offering Bitcoin-oriented ETFs, aimed to have its new spot fund reflect the CME CF Bitcoin Reference Rate, New York Variant, with a plan to list shares on the Nasdaq under ticker BRRR.

In the latest filing, the SEC sought public comments on the Exchange’s proposal concerning its design to curb fraudulent and manipulative acts, and opinions on Bitcoin market liquidity and susceptibility to manipulation. With a 21-day comment period followed by a 35-day rebuttal window, the approval process is expected to extend for several more months. Similar review procedures were instituted for other Bitcoin ETF proposals, continuing a trend of postponements in the spot Bitcoin fund approvals amid concerns of a potential government shutdown.

Ripple Cancels Planned Acquisition of Fortress Trust

Ripple has retracted its intent to acquire Fortress Trust, despite an earlier announcement in September regarding a cash-and-equity deal for the acquisition. The precise details of the deal were undisclosed. CEO Brad Garlinghouse, in a post on social platform X (formerly Twitter), lauded Fortress's adept team for creating solutions for real customer issues, and while the acquisition won't proceed, Ripple intends to maintain its investor relationship and hopes for future collaborations. When unveiled, the acquisition aimed at leveraging Fortress Trust’s financial, regulatory, and tech infrastructure for blockchain innovators. Despite the setback from the planned acquisition, stemming shortly after Fortress Trust’s disclosure of a $12-15 million crypto theft, Ripple will retain its stake in the company, underscoring an ongoing relationship amid an evolving scenario.

Trading Desk Insights

Stock futures showed an uptrend on Friday, following recent inflation data that provided a positive momentum for the markets. This came at the tail end of a challenging month and quarter. Specifically, the S&P 500 is projected to close the month with a decline of 4.6%, and the quarter by 3.4%. The Nasdaq, on the other hand, has retreated by nearly 6% this September and 4.3% for the quarter, marking the toughest month in 2023 for both indices.

Friday's core PCE data, the Federal Reserve's favored inflation gauge, sans the unstable food and energy components, showed a rise of 0.1% for August and 3.9% year-over-year. Interestingly, this is against the anticipated monthly increase of 0.2% and a year-over-year figure of 3.9%.

In the realm of bond markets, renowned hedge fund mogul, Bill Ackman, anticipates a potential spike in long-term Treasury yields due to persistent inflationary pressures. He stated, “Considering the current scenario, it wouldn't be surprising to witness 30-year rates surpassing the 5% threshold or even the 10-year nearing that mark. Historically, a 4% rate was seen as high. But in the grand scheme of things, it's considerably low."

On an intraday basis, BTCUSDT continues to slowly grind higher, desperately trying to break above the resistance of 27,500 but has recently failed to do so. On the daily chart, prices aren’t able to break above the declining trend line in place since the yearly highs. The RSI is supported by a rising trend line which is lifting the current price action for now. Given the recent rally, we have raised our support to $26,000.

On the cryptocurrency front, the BTCUSDT perpetual contracts on Binance, the most traded pair, has set a new benchmark by staying below the neutral rate (0.01%) for 118 successive intervals.

Additionally, Bitwise Asset Management, a leading crypto index fund manager in the U.S., has announced its plans to launch two Ethereum Futures ETFs, with trading anticipated to commence on October 2nd.

Lastly, SEC Chair Gary Gensler maintained his critical perspective on cryptocurrencies during a recent congressional testimony. While he was forthright about Bitcoin not fitting the security bill under U.S. law, his hesitance to classify it distinctly as a commodity has stirred discussions and sparked further debates on its official classification.

Technical Charts


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