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Next FOMC meeting: Mar 20th 2024
- Probability of a 25bps ease → 1%
- Probability of a 0bps hike → 99%
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The News Room
Kalshi Launches Crypto Price Prediction Betting in U.S. Amid Digital Asset Revival
Kalshi, the only regulated prediction market platform in the U.S., is branching into cryptocurrency-related betting amid a revival of digital asset prices. Beginning Monday, the New York-based platform will offer its clients the opportunity to wager on the future prices of cryptocurrencies like Bitcoin and Ethereum, using U.S. dollars for all transactions. While not directly involving the purchase or sale of cryptocurrencies, these markets allow speculation on price milestones such as Bitcoin reaching $100,000. Kalshi's entry into crypto bets aligns with a broader resurgence in interest for prediction markets and comes as digital assets experience a bull market, partly fueled by the launch of Bitcoin ETFs. This move not only taps into the speculative zeal surrounding cryptocurrencies but also positions Kalshi to attract U.S. traders interested in crypto markets, leveraging its regulatory approval from the Commodity Futures Trading Commission (CFTC) to offer a compliant alternative to platforms like Polymarket, which faces restrictions in the U.S.
Arbitrum Foundation Launches $400M Initiative to Boost Blockchain Gaming Ecosystem
The Arbitrum Foundation is setting its sights on the blockchain gaming sector, proposing a significant investment of approximately $400 million over the next two years to attract publishers and builders to develop video games on the Arbitrum blockchain. Through the "Gaming Catalyst Program," the foundation aims to allocate 200 million ARB, with the majority (160 million ARB) dedicated to incentivizing game development on its platform and the remainder (40 million ARB) allocated towards supporting necessary infrastructure and tool development for gaming. This initiative reflects Arbitrum's ambition to replicate its success in other web3 sectors by becoming a leading platform for quality, engaging blockchain games, aiming to enhance user acquisition and retention while competing with other blockchains such as Polygon, Immutable, Avalanche, and Solana that currently dominate the blockchain gaming space.
Dubai International Financial Centre Implements New Digital Assets Law to Foster Growth in Global Finance Sector
The Dubai International Financial Centre (DIFC), a prominent tax-free economic zone in Dubai, UAE, has introduced its novel Digital Assets Law, aiming to modernize and adapt its legal framework to the evolving technological landscape in global finance and trade. This legislation, effective from March 8, is part of a broader initiative that includes the enactment of the Law of Security and amendments to other laws, striving to offer legal clarity and security for digital asset investors and users. The development follows a thorough examination of regulatory practices worldwide and a period of public consultation last year. Operating under its unique legal system based on English common law, the DIFC aims to further enhance its appeal as a global financial hub by establishing comprehensive property law principles for digital assets. This move is praised by Moody’s as a potential catalyst for growth in digital asset initiatives and tokenization by attracting more participants to this free zone.
Trading Desk Insights
Over the recent weekend, Bitcoin experienced notable volatility, dipping to a low of $64,600, coinciding with the 38.2% Fibonacci retracement level. The cryptocurrency witnessed a 7% rally on Friday, culminating in a peak at 3pm EST, aligned with the closure of U.S. equity markets. Following this peak, the trend shifted downwards, with the market struggling to revisit Friday's closing prices. By Sunday morning, Bitcoin managed to surpass its prior highs, currently oscillating between $67,000 and $69,000. The market outlook remains bullish as long as Bitcoin sustains above the 20-day moving average, now at $67,000, indicating that any dips present buying opportunities.
In the realm of ETFs, the market has absorbed inflows amounting to $198.8 million, while Grayscale has reported outflows of $139.4 million.
The upcoming Nvidia AI conference is drawing significant attention, due to its potential influence on AI-focused tokens and various protocols, including RNDR, FET, WLD, NEAR, among others. Keynote presentations are scheduled with OpenAi on Tuesday at 12pm EST, followed by sessions with OpenAi, NEAR, and NVIDIA on Wednesday at 2pm EST.
Solana's meme coin sector has propelled SOL beyond the $200 resistance level. Currently ranked as the fourth-largest coin, SOL is outpacing the broader market, including Bitcoin and Ethereum, showcasing remarkable strength. Solana has reached a new record in daily new address registrations and, for the first time, has surpassed Binance Smart Chain in terms of TVL, including liquid staking.
The meme coin market witnessed unprecedented activity with SLERF, experiencing over $1.6 billion in trading volume within 24 hours. A significant developer error, resulting in the burning of the liquidity pool and airdrop, prevented presale participants from receiving their airdrops. This triggered an extraordinary buying spree, pushing the market capitalization beyond $650 million and setting a record for the fastest meme coin to breach the $500 million mark within three hours of its launch.
Additionally, the iconic Dogwifhat meme coin photograph was sold as an NFT for $4.3 million.
On the macroeconomic front, S&P 500 futures saw an uptick on Monday, as the financial community anticipates the key artificial intelligence conference and awaits the Federal Reserve's monetary policy update later this week. Tech stocks are leading gains in early trading sessions.
The Federal Reserve's bi-monthly policy meeting commences Tuesday, concluding with an announcement on Wednesday. Current indicators from the CME FedWatch Tool suggest a 99% probability that interest rates will remain unchanged this week, although anticipations for a rate cut in June have slightly decreased to approximately 55%.
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Disclaimer
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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