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Markets are in a typical risk-off mode ahead of today’s Fed rate decision, which drops at 2 PM ET. Fed funds futures indicate a 95% probability of a 25bps rate cut. Beyond the headline rate move, traders will closely dissect the Summary of Economic Projections and Powell’s press conference for hints on future policy direction. While expectations for additional cuts in 2024 are likely to be downplayed, given persistent inflationary pressures, the Fed is anticipated to forecast three rate cuts for 2025—down from September’s projection of four. Upward revisions to growth and inflation estimates are also on the table. Should Powell soothe inflation worries or the rate outlook remain unchanged, risk assets could catch a bid.
On the ETF front, buzz is building around potential Litecoin (LTC) and Hedera (HBAR) ETFs. Given LTC’s roots as a Bitcoin fork and the SEC’s silence on classifying LTC or HBAR as securities, there’s speculation they might be viewed as commodities. Canary stands as the lone issuer so far to file for an LTC or HBAR ETF.
In derivatives, funding rates for major perpetuals remain modestly positive, hovering just above neutral. BTC open interest is climbing back toward its November peaks, while ETH open interest has already set fresh records. BTC dominance has rebounded from 54.5% to 58.3% over the past fortnight, signaling a pivot back toward BTC as the preferred play over altcoins.
The News Room
Ohio Lawmaker Proposes Bill to Establish State-Backed Bitcoin Reserve
Ohio State Representative Derek Merrin has introduced HB 703, the Ohio Bitcoin Reserve Act, aiming to establish a state-backed Bitcoin reserve within the treasury to protect public funds from US dollar devaluation and enhance financial security through digital assets. Merrin expects the incoming Trump administration to create a national Bitcoin reserve, aligning with efforts from other states like Texas and Pennsylvania. The bill authorizes the state treasurer to invest interim funds in Bitcoin, reflecting Ohio’s commitment to digital innovation. This initiative comes as Bitcoin has surged 155% this year, currently trading at $104,680, bolstered by Trump’s reelection as a crypto advocate.
HashKey Group Launches Ethereum Layer 2 HashKey Chain on Mainnet in Hong Kong
HashKey Group has launched its Ethereum Layer 2 HashKey Chain on mainnet, positioning itself alongside Coinbase and Kraken in developing Layer 2 networks using the OP Stack. This Hong Kong-based, regulated digital asset provider reported impressive testnet results, including nearly 25 million transactions and 300,000 community participants. As part of the Ethereum Superchain, HashKey Chain enhances interoperability and scalability for decentralized applications. The native token, HSK, is now available on multiple exchanges, allowing holders to engage in governance. Additionally, HashKey has introduced a $50 million grant program to support developers. Beyond its Layer 2 initiatives, HashKey, in collaboration with Bosera Asset Management, launched Hong Kong’s first spot Bitcoin and Ethereum ETFs, which have attracted substantial net inflows and performed on par with U.S. benchmarks.
Trump-Backed World Liberty Financial and Ethena to Collaborate on sUSDe Implementation
Donald Trump-backed DeFi platform World Liberty Financial is set to collaborate with Ethena Labs, beginning with the implementation of Ethena’s yield-bearing token, sUSDe. This long-term partnership aims to integrate sUSDe as collateral on the WLFI protocol through Aave, leveraging Ethena’s large total value locked (TVL) and user base. World Liberty Financial’s governance will vote on the proposal this week. If approved, the integration is expected to increase stablecoin deposits and enhance the platform’s financial offerings. Additionally, World Liberty Financial has recently appointed Tron founder Justin Sun as an advisor and secured a $30 million investment from HTX. The platform also acquired $600,000 of ENA tokens, demonstrating its commitment to the Ethena network. This collaboration aligns with Trump’s pro-crypto stance and aims to democratize access to financial tools while reducing regulation in the digital assets sector.
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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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