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Economic Calendar
Next FOMC meeting: Mar 20th 2024
- Probability of a 25bps ease → 22%
- Probability of a 0bps hike → 78%
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CleanSpark Aims to Double Hash Rate Ahead of Bitcoin Halving with Strategic Acquisitions
Bitcoin mining firm CleanSpark is positioning itself for growth through strategic acquisitions, aiming to double its hash rate in anticipation of the upcoming Bitcoin block reward halving in April. The company's recent purchase of three mining facilities in Mississippi for $19.8 million and an additional facility in Dalton, GA, for $7 million is expected to increase its operational hash rate from 10 EH/s to potentially 20 EH/s by mid-2024. These acquisitions, part of CleanSpark's geographic diversification strategy, reflect a broader industry trend of expanding and opening new revenue streams ahead of the halving, which will reduce mining rewards by half. CleanSpark's efforts include a significant investment in new equipment, with a commitment to purchase 60,000 Bitmain S21 miners and an option for 100,000 more, aligning with Marathon Digital's similar strategy to enhance operational capacity. This proactive approach by Bitcoin miners, including substantial investments in mining infrastructure, aims to sustain and grow operations despite the impending reduction in mining rewards.
MetaMask and Robinhood Team Up to Streamline Crypto Purchases for Users
MetaMask, a self-custodial crypto wallet developed by Consensys, has integrated with the popular online trading platform Robinhood to allow users to buy cryptocurrencies directly through Robinhood's order flow. This collaboration enables MetaMask users to leverage Robinhood Connect, a fiat-crypto on-ramp, within MetaMask's "Buy Crypto" feature, facilitating the transfer of digital assets from Robinhood accounts to MetaMask wallets. On-ramps, crucial for bridging traditional finance with the blockchain crypto economy, enhance user onboarding to web3 applications. Robinhood, which introduced its on-ramp feature in April to simplify crypto wallet funding within decentralized applications, aims to provide users more control and ownership over their digital assets. Consensys emphasizes the importance of this partnership in offering seamless, self-custodial access to cryptocurrencies, appealing to users' trust in established service providers. Moreover, Robinhood's recent expansion of its crypto trading services to the U.K. and Europe underscores its commitment to global crypto accessibility, capitalizing on the EU's comprehensive digital asset regulations.
Neutral and DLT Finance Launch Regulated Blockchain Platform for Carbon Credits
Neutral and DLT Finance have collaborated to create a blockchain-backed platform for carbon credits, marking a significant development in the use of financial instruments to support environmental sustainability. While not the first project to leverage blockchain for the carbon credit market, it is the pioneering initiative to introduce a regulated trading platform for tokenized environmental assets. Neutral CEO Farouq Ghandour highlighted the lack of market infrastructure for traditional trading of these assets and positions Neutral as the technology provider with DLT Finance offering the necessary regulatory framework. The platform is designed to exclude the blockchain complexity for end-users, focusing instead on providing a familiar trading experience similar to conventional commodity swaps platforms but with enhanced liquidity for large-scale transactions. Ghandour emphasized the importance of a regulated counterparty for financial institutions, addressing the reluctance to engage with decentralized exchanges (DEXs) and proposing a solution that could make this platform more appealing and effective in integrating blockchain-based carbon markets into mainstream finance.
Trading Desk Insights
Currently, Bitcoin is grappling with the 50-day moving average, a pivotal level that has played a significant role throughout 2023. Additionally, it finds itself confined below the trendline originating from October 2023. Anticipating a period of consolidation at these levels, a breakout is projected either towards $47,000 or a dip to $40,000. Notably, the Bitcoin order book reveals a pile of bids between $35,000 and $39,000, aligning with the corrective thesis and suggesting a support floor around $40,000.
Shifting focus to ETF flows, the market observed fresh inflows amounting to $33.7 million, marking the second-lowest day of inflows since January 26th when it totaled $14.8 million. Also, outflows from GBTC are diminishing, reaching $72.7 million, the lowest since the ETFs' approval.
Monero (XMR) experienced a 40% decline, reaching a 20-month low following Binance's announcement of the token's delisting effective February 20th.
In regulatory developments, South Korea's financial watchdog declared that crypto offenders may face life imprisonment under new consumer protection rules effective this July. These regulations encompass activities such as market manipulation, illegal trading, and other violations, carrying the potential for criminal punishment or fines.
On a broader market note, equity futures saw an uptick on Wednesday as investors analyzed quarterly results midway through the corporate earnings season. The robust earnings performance, coupled with expectations of a Federal Reserve interest rate cut, has bolstered Wall Street. Notably, the strength in earnings has been led by megacap technology and artificial intelligence-focused companies, contributing to a narrower market breadth.
Minneapolis Federal Reserve President Neel Kashkari shared on Wednesday his expectation of only a few rate cuts by the central bank this year, contrary to prevailing market expectations. “Sitting here today, I would say, two or three cuts would seem to be appropriate for me right now” There are “compelling arguments to suggest we could be in a longer, higher rate environment going forward.” “So far, the data has been resoundingly positive. I hope it continues. And then the question will simply be, at what pace do we then start to adjust rates back down?”
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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.
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