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BTC broke out of its recent range late yesterday and is eyeing the recent highs. The decline in both the 10-year yield and the Dollar Index since mid-January has provided a favorable environment for risk assets. Altcoins, too, are seeing renewed activity. Litecoin stands out as one of the top-performing large-cap coins over the last 24 hours, buoyed by the SEC’s acknowledgment of Canary Capital's Litecoin ETF proposal. This has opened for public feedback, signaling potential approval within a timeline of up to 240 days.
The Federal Reserve kept interest rates unchanged at 4.25%-4.5%, following three consecutive cuts since September 2024. This move reflects their cautious approach as they assess the political and economic challenges ahead. The post-meeting statement expressed greater optimism about the labor market, though it notably omitted the previous reference to inflation "making progress toward" the 2% target.
In Europe, the ECB cut rates by 25bps on Thursday, marking its fifth reduction since it began easing policy in June 2024. The bank is balancing concerns of rising inflation with weak economic growth, a challenging environment for the euro area.
Tesla saw a significant boost to its net income, driven by a $600 million mark-to-market gain on its Bitcoin holdings. This was due to a new accounting standard for digital assets, which now requires companies to mark their holdings to market each quarter. Tesla, now the sixth-largest corporate holder of Bitcoin, benefited from this change, which reflects the recent rule by the Financial Accounting Standards Board.
Equity futures showed strength on Thursday as Wall Street reacted to the latest quarterly results from several major tech companies. After a down day following the Fed's rate decision, investors are looking ahead to earnings reports from other key players. Apple will release its results on Thursday, followed by Amazon’s report next week, keeping the focus on the tech sector.
The News Room
CME Group to Launch Options on Bitcoin Friday Futures, Priced at 1/50th of a BTC
CME Group plans to introduce options on its Bitcoin Friday Futures (BFF) contracts on February 24, pending regulatory approval. These financially settled options will offer daily expiries from Monday to Friday, providing traders with more flexibility to manage short-term Bitcoin price risk. Priced at 1/50th of a Bitcoin, BFF contracts were designed to enhance accessibility and have quickly become CME’s most successful crypto futures product since launching in September 2023. With over 775,000 contracts traded and $1.63 billion in volume, the new options aim to further expand CME’s crypto derivatives offerings alongside its existing Bitcoin and Ethereum contracts.
Czech Central Bank to Evaluate Bitcoin as Potential Reserve Asset
The Czech National Bank (CNB) has approved a proposal to analyze the feasibility of investing in Bitcoin as part of its reserve diversification strategy. Governor Aleš Michl suggested allocating up to 5% of the bank’s €140 billion ($146 billion) reserves to Bitcoin, citing potential for higher returns despite increased volatility. The board will decide on next steps based on the analysis, with no immediate changes. If approved, the CNB would become the first central bank to hold Bitcoin. Michl, who sees growing institutional interest in Bitcoin, believes other central banks may follow suit in the coming years.
El Salvador Approves Bill to Adjust Bitcoin Strategy in Line With IMF Agreement
El Salvador’s Congress has passed a bill modifying its Bitcoin adoption strategy to align with the terms of a $1.4 billion agreement with the International Monetary Fund (IMF). The key revision makes Bitcoin acceptance voluntary for businesses rather than mandatory. The IMF-backed loan, part of a broader 40-month financial support package, required El Salvador to limit certain Bitcoin-related activities while enhancing transparency and regulation of digital assets. Since adopting Bitcoin as legal tender in 2021, the country has accumulated 6,049 BTC but has seen slower-than-expected adoption. The new bill aims to balance financial stability with El Salvador’s pro-Bitcoin stance.
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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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