January 08, 2025

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Trading Desk Insights

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Risk assets, particularly equity futures, saw a notable dip earlier following a CNN report suggesting that President Trump is contemplating declaring a national economic emergency to advance new tariffs. This has contributed to an uptick in 10-year bond yields, which are rising on expectations that Trump's tariff and tax proposals could fuel inflation. Yields have recently touched 4.73%, marking the highest levels since April, just 0.01% shy of the peak seen in November 2023.

The bond market is currently driving broader market sentiment, and any bullish shift in risk assets may hinge on stabilization within Treasury markets.

Ripple's CEO, Brad Garlinghouse, recently held discussions with President-elect Trump, and the company's president suggested that an XRP ETF could be the next major launch following Bitcoin and Ether. Since Trump's election, there has been growing speculation among traders that a crypto-friendly administration could benefit tokens linked to U.S.-based projects, such as Ripple and Uniswap. XRP has surged over 300% since the election, outpacing the broader market.

MSTR continues to see increased volume and now ranks sixth in trade volume within the "Magnificent Seven" tech stocks. Despite having a smaller market cap of $100 billion, MSTR stands out with the highest 30-day implied volatility among its peers, registering at 100, compared to IBIT’s IV of around 60.

Concerns about insufficient decentralization have led to a 10% pullback in HYPE prices. HyperLiquid has addressed these concerns, stating plans to release its code as open-source once it is secure and highlighting its roadmap to enhance decentralization efforts.

Fidelity, the $5.4 trillion asset manager, recently noted that nation-states and governments could become the next major institutional investors in Bitcoin, driven by rising inflation, currency debasement, and increasing fiscal deficits.

The equity market closed sharply lower yesterday, weighed down by stronger-than-expected economic data from the U.S. services sector, as indicated by the ISM report. This data raised concerns about persistent inflation and the outlook for interest rate cuts from the Federal Reserve. The futures market is currently pricing in a 95% probability that no rate reductions will be announced during this month’s central bank meeting. Investors will be closely watching the release of the Fed's December meeting minutes at 2 pm ET for further insights.

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The News Room

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China to Leverage Blockchain for National Data Infrastructure Goals by 2029

China's top economic planner, the National Development and Reform Commission, has issued guidance to develop a national data infrastructure powered significantly by blockchain technology, aiming for completion by 2029. While maintaining its ban on cryptocurrency trading and mining, China plans to leverage permissioned blockchains for applications like standardized data asset structures, transaction certificates, and enhanced traceability using encryption and smart contracts. The policy encourages industries and local governments to experiment with blockchain networks and privacy-protecting computing platforms. Deputy Director Zhulin Shen projected that these initiatives could attract around 400 billion yuan ($54.5 billion) in annual direct investment, potentially totaling about 2 trillion yuan ($272.7 billion) over the next five years.

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Canaan Unveils Avalon Mini 3, Bitcoin Miner That Doubles as Home Heater at CES 2025

At CES 2025, Canaan introduced the Avalon Mini 3, a 37.5 TH/s Bitcoin miner that also functions as a home heater. This innovative device aims to "democratize" crypto mining by allowing users to offset energy costs and reduce environmental impact through heat recycling, effectively warming larger living spaces while mining Bitcoin. Alongside the Mini 3, Canaan launched the Avalon Nano 3S, a beginner-friendly 6 TH/s miner designed for portability and affordability. Both products emphasize user-friendly, sustainable mining solutions, with preorders available at $899 for the Avalon Mini 3 and $249 for the Nano 3S. This development builds on the trend of dual-purpose mining devices, offering a quiet, energy-efficient alternative that integrates practical household applications with cryptocurrency mining.

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South Korea Seeks to Lift Ban on Institutional Cryptocurrency Trading

South Korea's top financial regulator, the Financial Services Commission (FSC), plans to gradually lift the de facto ban on institutional cryptocurrency trading. Citing steps to open trading accounts for institutions—beginning with non-profit organizations—the FSC aims to work with its Digital Asset Committee to overhaul restrictions that currently allow only government-verified retail traders on crypto exchanges. This initiative aligns with President Yoon Suk-yeol’s election promises to boost the local crypto sector, including efforts to launch spot crypto exchange-traded funds. The proposed changes will follow the regulatory framework established by the Virtual Asset Investor Protection Act, with further amendments to the Financial Information Act to screen major shareholders of virtual asset service providers.

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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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