July 22, 2024

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Hong Kong to Launch Asia's First Inverse Bitcoin ETF

CSOP Asset Management will launch Asia’s first inverse Bitcoin ETF on July 23, 2024. Named the CSOP Bitcoin Future Daily (-1x) Inverse Product (7376.HK), this ETF aims to profit from Bitcoin price declines, expanding on CSOP's successful launch of a Bitcoin Futures ETF in December 2022. The new product will mirror the inverse daily performance of the S&P Bitcoin Futures Index by investing in Chicago Mercantile Exchange Bitcoin Futures. Set to list on the Hong Kong Stock Exchange (HKEX) at approximately 7.8 Hong Kong dollars per unit, this follows HKEX's introduction of spot crypto ETFs in late 2022, which have collectively amassed $170 million in assets. Additionally, the Hong Kong Securities and Futures Commission (SFC) recently flagged seven unregulated crypto exchanges operating illegally in the region.

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Memecoin Frenzy Heats Up as US Election Approaches

The 2024 U.S. presidential election has ignited a surge in political memecoins, reflecting both excitement and turmoil. Joe Biden's announcement of stepping down as the Democratic nominee caused Biden-related tokens to plummet, with Jeo Boden (BODEN) falling 62% and Hunter Biden’s Laptop (LAPTOP) dropping nearly 45%. Conversely, Kamala Harris-related tokens, like Kamala Horris (KAMA), surged 62% amid speculation she might replace Biden. Trump-themed tokens, including MAGA (TRUMP) and TRUMP’S HAT (MAGA), saw fluctuations following events like the assassination attempt on Trump and Biden’s withdrawal. Some analysts suggest Biden's resignation could positively impact the overall crypto market.

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Galaxy Digital Acquires Almost $1 Billion in Ethereum Through CryptoManufaktur Deal

Galaxy Digital Holdings has acquired nearly $1 billion in staked Ethereum through its purchase of node operator CryptoManufaktur (CMF), significantly increasing its staked crypto assets by 43%. This acquisition boosts Galaxy Digital's total staked assets to approximately $3.3 billion. The move comes just before the anticipated approval of spot Ethereum ETFs in the U.S., which could potentially elevate ETH prices. Speculation about rising ETH prices has already led to a substantial increase in staked tokens on the Ethereum network, with over 33 million ETH currently staked.

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Trading Desk Insights

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Bitcoin briefly touched $68,500 before retreating to $66,000, with open interest holding steady over the weekend. Bullish sentiment has risen among traders, driven by a positive outlook on the U.S. election. This morning, prices have pulled back slightly, accompanied by lower spot volume.

Attention is focused on Trump's upcoming Nashville Bitcoin conference speech. Speculation is high that he may announce a larger role for crypto in the financial system. If Trump declares BTC a strategic reserve asset, it could trigger a parabolic price increase. The potential for a crypto-friendly government is boosting sentiment among professional traders.

On Sunday, Biden ended his reelection campaign and endorsed Vice President Kamala Harris as the Democratic Party’s nominee. Harris’ new campaign raised $49.6 million in grassroots donations within a day of its launch. The Democrats, previously headed for a "landslide defeat" in November, now have a fighting chance. Harris’ nomination also reduces the odds of Republicans winning both houses of Congress, dropping Trump’s odds from 71% on Sunday to 65% on Monday on Polymarket, while Harris' odds rose from 16% to 30%.

US BTC ETFs saw healthy net inflows of $1.24 billion last week, indicating strong market interest.

Increased activity on Solana-based applications and a surge in total value locked (TVL) on the network have driven Solana's recent outperformance. TVL on Solana has risen over 25% in a month, crossing $5.28 billion, levels not seen since April 2022. Expectations of a possible ETF product and easing regulatory policies under a potentially crypto-friendly Trump administration have further boosted Solana's appeal among investors.

Equity futures inched up on Monday after the broad market index suffered its worst weekly losses since April. Investors are rotating out of megacap technology stocks and into smaller names, seeking broader exposure, which is a smart move in an election year.

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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.

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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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