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Next FOMC meeting: Mar 20th 2024
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The News Room
MicroStrategy Seeks $500 Million for Bitcoin Buys, Further Expanding BTC Holdings
MicroStrategy, now identifying as a Bitcoin Development Company, announced its plan to raise $500 million through a convertible debt offering to further invest in Bitcoin, following a recent $800 million raise initially set at $600 million. This move allowed the acquisition of an additional 12,000 Bitcoin, increasing its holdings to 205,000 Bitcoin valued near $15 billion. The new funding is expected to enable the purchase of approximately 6,800 more Bitcoin, contingent on the cryptocurrency's price stability around $73,000. Despite the company's aggressive Bitcoin investment strategy, MSTR shares experienced a slight decline in after-hours trading, following a notable 10.85% increase during the regular session to reach an all-time high of $1,766, mirroring Bitcoin’s ascent to record highs.
Craig Wright Not Satoshi Nakamoto, UK Judge Rules in Key Bitcoin Case
In a significant verdict within the cryptocurrency community, U.K. Judge James Mellor concluded that Craig Wright is not Satoshi Nakamoto, the pseudonymous creator of Bitcoin, nor the author of the Bitcoin whitepaper. This decision came after a month-long trial initiated by the Crypto Open Patent Alliance (COPA) against Wright, aimed at preventing him from claiming intellectual property rights over Bitcoin's open-source technology and suing members of the crypto community. The judge found the evidence against Wright's claim to be "overwhelming" and plans to detail his conclusions in a written ruling, including that Wright did not create Bitcoin's software. This outcome is a victory for COPA, supported by prominent figures and companies like Jack Dorsey, Coinbase, and others, and represents a stand against the intimidation faced by developers from Wright and his backers over his claims of being Satoshi Nakamoto. Wright's counsel argued against COPA's request for injunctions that would bar him from claiming he is Bitcoin's creator, citing it as an infringement on his freedom of expression. The judge's final written judgment is awaited, with COPA considering pursuing legal action regarding Wright's potential perjury during the trial.
Hong Kong Advances CBDC Exploration with e-HKD Pilot Program's Phase Two
The Hong Kong Monetary Authority (HKMA) is advancing its exploration of a central bank digital currency (CBDC) with the launch of the second phase of the e-HKD pilot program. This phase aims to extend the testing of the digital Hong Kong dollar from its initial focus on domestic retail payments, offline transactions, and the settlement of tokenized assets to explore additional applications such as programmability, tokenization, atomic settlement, and new use cases not examined in the first phase. This move is part of Hong Kong's broader initiative to evaluate the potential of CBDCs in enhancing the financial system, amidst a global trend where over 100 jurisdictions are assessing CBDCs' viability and capabilities, especially in response to the growing interest in private crypto payments and stablecoins. The HKMA has also initiated a regulatory sandbox for the wholesale use of CBDCs and tokenization, supporting the e-HKD's development. Organizations keen on participating have until May 17 to apply, signaling the HKMA's commitment to engaging with various stakeholders in this innovative venture.
Trading Desk Insights
Bitcoin encountered downward pressure following the release of the Producer Price Index (PPI) report, which outperformed expectations. This economic indicator's surprise uptick resulted in a roughly 3% decline in BTC valuation, while Nasdaq receded by about 1%. From a technical analysis perspective, Bitcoin is demonstrating a rising wedge formation on the 4-hour chart. This pattern is traditionally interpreted as a bearish signal in an ascending market, potentially foreshadowing short-term bearish momentum. Currently, Bitcoin finds robust support at the $69,000 mark. However, a breach below this threshold could set the stage for a retraction to the $65,000 level, aligning with the 38.2% Fibonacci retracement, and potentially extending to the $62,000 level, corresponding to the 50% Fibonacci retracement.
In the realm of ETFs, the market experienced its second-largest day of net inflows on record, amassing $683.7 million. This surge in capital influx occurred despite a significant outflow of $276.5 million from Grayscale investments.
Ethereum's landscape witnessed a monumental update with the deployment of Dencun, marking the most significant upgrade in over a year, following extensive preparatory work. This update is particularly focused on enhancing the efficiency of Layer 2 rollup networks such as Optimism, Arbitrum, and Coinbase's Base network. These platforms are designed to offer cost-effective transaction options within the Ethereum ecosystem.
In legal developments within the cryptocurrency domain, U.K. Justice James Mellor determined that Craig Wright does not qualify as Satoshi Nakamoto nor the author of the seminal Bitcoin whitepaper, as concluded in the Crypto Open Patent Alliance (COPA) trial.
The meme coin sector is experiencing a resurgence in investor interest, while the Solana ecosystem is witnessing significant growth, underscored by the success of initiatives like WIF and BONK.
On the broader market front, stock indices displayed minimal changes as traders digested the implications of a higher-than-anticipated PPI reading alongside a dip in Nvidia's market performance. The PPI escalated by 0.6% monthly, doubling the anticipated 0.3%, with the core PPI also surpassing forecasts by recording a 0.3% increase compared to the expected 0.2%.
In the commodities market, crude oil futures advanced, building on the momentum from the previous session's gains. This uptrend is supported by the International Energy Agency's (IEA) updated forecast, which now anticipates a supply deficit in 2024, coupled with an upward revision in global demand growth to 1.3 million barrels per day.
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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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