January 07, 2025

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Trading Desk Insights

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BTC has fallen to $97,000 following a robust US jobs report, which has diminished expectations for imminent rate cuts. However, prices are showing signs of recovery, bouncing off session lows and attempting to regain ground above the $100,000 mark. Deribit options are reflecting a bullish outlook, though this optimism isn't mirrored in the equity markets. The SPX options skew is now signaling greater downside risk compared to a year ago, historically a precursor to risk-on/off movements in assets like BTC. As BTC prices declined, spot market volume has decreased alongside open interest, while a slight uptick in the funding rate suggests growing interest in futures.

The futures market for DOGE has set a new record for open interest at 10.35 million DOGE, up from 7.5 million just over the weekend. Historically, January has been DOGE's most profitable month, with an average return of 85%.

In the world of crypto ETFs, BTC saw significant inflows, attracting $978.6 million on Monday, its highest amount since November 21st, bringing the two-day total to nearly $2 billion. ETH also saw inflows of $128.7 million.

Looking ahead, major economic data will likely shape market movements this week, with the key event being Friday’s nonfarm payrolls report for December. Additionally, the trading week will be shortened by the NYSE’s closure on Thursday in observance of the late President Jimmy Carter.

On the equity side, Nvidia reached a new all-time high on Monday after unveiling new chips for desktops and laptops built on the Blackwell architecture. The CEO highlighted the growing importance of AI agents, labeling them a "multi-trillion dollar opportunity." The crypto AI agent market is currently valued around $18 billion, suggesting further upside potential.

Meanwhile, Meta made waves by discontinuing its third-party fact-checking program and introducing “Community Notes,” similar to Twitter's X. The company is also lifting restrictions on political content and topics like immigration and gender.

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The News Room

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Pro-Crypto Pierre Poilievre Emerges as Polymarket Favorite to Replace Justin Trudeau as Canada's Next Prime Minister

Users on the decentralized prediction platform Polymarket are assigning Pierre Poilievre an 89% probability of becoming Canada’s next prime minister following Justin Trudeau’s resignation. Since the market opened on December 30, 2024, participants have placed approximately $257,000 in bets on Poilievre, contributing to a total trading volume of $412,095. The prediction market resolves as a “Yes” if Poilievre wins the upcoming federal election expected this spring. Poilievre, the pro-crypto leader of Canada’s Conservative Party, has been favored by the market since its inception. His known support for cryptocurrency investments, such as holding a stake in Purpose Bitcoin, complements his public persona amid growing speculation about his potential premiership.

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FTX EU Acquired by Backpack Exchange, Founded by Former FTX and Alameda Employees

FTX EU, the European branch of the defunct crypto exchange, has been acquired by Backpack Exchange after receiving the necessary regulatory and legal approvals. The acquisition, sanctioned by both the FTX bankruptcy court and the Cyprus Securities and Exchange Commission, positions Backpack Exchange—a platform founded by former FTX and Alameda Research employees—to distribute court-approved bankruptcy claims to former FTX EU users. Under the new umbrella, Backpack EU plans to launch in the first quarter of 2025, offering crypto derivatives such as perpetual futures across the European Union while facilitating transactions via SEPA and wire transfers. This move aligns with the EU’s evolving MiCA regulatory framework, as Backpack CEO Armani Ferrante emphasizes a commitment to transparent, secure, and regulated crypto trading, aiming to restore customer trust in the industry.

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MicroStrategy’s $2 Billion Preferred Stock Strategy Could Unlock Institutional Goldmine

MicroStrategy plans to raise up to $2 billion by issuing perpetual preferred stock as part of its "21/21" strategy, aiming to sell $42 billion in equity and fixed-income securities. This perpetual preferred stock, which offers fixed dividend payments with no maturity date, could attract institutional investors like insurance companies, pension funds, and banks seeking stable returns. Benchmark analyst Mark Palmer highlights that including features such as cash dividends and conversion into Class A common stock would provide these securities with an embedded call option on MicroStrategy, whose value is closely tied to its large Bitcoin holdings. The move follows highly successful convertible bond offerings, with MicroStrategy currently holding 447,470 BTC valued at over $44 billion, and reinforces a "buy" rating with a price target of $650 based on optimistic Bitcoin price projections.

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Crypto Charts

ETF Flow

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Disclaimer

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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.

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.

Unless otherwise provided in a separate agreement, Secure Digital Markets does not represent that the report contents meet all of the presentation and/or disclosure standards applicable in the jurisdiction the recipient is located. Secure Digital Markets and their officers, directors and employees shall not be responsible or liable for any trading decisions, damages or other losses resulting from, or related to, the information, data, analyses, or opinions within the report.

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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