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Swift to Launch Live Bank Trials for Digital Asset Transactions in 2025
Swift announced that it will begin live trials of digital asset and currency transactions over its global network in 2025, marking a shift from blockchain experiments to real-world settlement. Banks in North America, Europe, and Asia will participate in the trials, leveraging Swift’s existing infrastructure to enable cross-border transactions between digital and fiat currencies. The initiative aims to demonstrate how financial institutions can seamlessly transact across both traditional and emerging currency platforms. Swift's move follows successful blockchain experiments with Chainlink, and aims to ensure global interoperability of digital assets and currencies.
Visa unveils platform for managing tokenized digital assets
Visa has announced its new Visa Tokenized Asset Platform (VTAP), designed to issue and manage digital assets such as stablecoins and central bank digital currencies (CBDCs). Unveiled on Oct. 3, VTAP aims to provide banks and institutional investors with a secure infrastructure for minting, transferring, and settling digital assets across various blockchains. The platform is currently in a sandbox phase with partners like Banco Bilbao Vizcaya Argentaria (BBVA) testing its core functionalities. Visa plans a live pilot in 2025, using the public Ethereum blockchain. Despite its move into digital finance, Visa faces antitrust scrutiny from U.S. authorities over its alleged dominance in debit payments.
US Spot Bitcoin ETFs Record $91M in Net Outflows, Led by Ark's ARKB
U.S. spot Bitcoin ETFs recorded $91.7 million in net outflows on Wednesday, marking two consecutive days of negative flows. Ark and 21Shares’ ARKB led with $60.2 million in outflows, followed by Grayscale's GBTC with $27.3 million. BlackRock’s IBIT saw its first outflows since Sept. 9, losing $13.7 million. In contrast, U.S. spot Ethereum ETFs recorded $14.5 million in net inflows, driven by BlackRock’s ETHA with $18 million, while Grayscale’s ETHE posted $5.4 million in outflows. Trading volumes for both Bitcoin and Ethereum ETFs dropped compared to the previous day.
Trading Desk Insights
Bitcoin is showing resilience, bouncing off its 50-day moving average, which presents an attractive entry opportunity for traders who missed the recent uptrend. The upcoming nonfarm payrolls report, set to be released on Friday at 8:30 AM ET, is a key event to watch. A strong report could boost market sentiment, while a miss may trigger a sell-off across risk assets.
Despite the recent pullback, there is notable whale activity accumulating Bitcoin, indicating confidence in a future rally. Notably, these inflows into long-term holding wallets are not related to ETF structures but are primarily custodial wallets with no outflows, neither exchange nor miner-owned. Meanwhile, ETH/BTC continues to weaken, approaching another yearly low, with Bitcoin outperforming Ethereum by over 10% since early September. As Bitcoin’s correction persists, altcoins have also felt the pressure, with market cap dropping by over 10%. However, signs of a potential rebound are emerging.
In institutional news, Grayscale has introduced a new fund focused on the DeFi protocol Aave, providing institutional investors with exposure to Aave’s governance token (AAVE). This adds to Grayscale's growing lineup of crypto-focused investment vehicles.
OpenAI recently raised $6.6 billion in funding, bringing its valuation to an impressive $157 billion. Interestingly, despite the buzz around AI, tokens linked to artificial intelligence have seen minimal movement in response.
XRP continues to face downward pressure, largely due to regulatory uncertainty. The U.S. SEC's appeal in its ongoing case against Ripple is contributing to the bearish sentiment. The recent filing of a spot XRP ETF by Bitwise has not provided the expected lift, as the legal uncertainties persist. However, on a positive note, Ripple’s partnership with Mercado Bitcoin in Brazil aims to streamline cross-border payments, providing some optimism for its broader business operations.
In a significant development for tokenized assets, a CFTC subcommittee has recommended allowing firms to use tokenized shares as collateral, signaling a step towards further integration of blockchain technology into traditional financial systems. This could modernize collateral management practices, offering greater flexibility for financial institutions.
In ETF flows, Bitcoin-focused ETFs saw substantial outflows, with $64.4 million in redemptions, driven primarily by ARK’s $60.3 million outflow. On the other hand, Ethereum ETFs attracted $19.8 million in inflows, led by BlackRock with $18 million.
Stock futures dipped slightly ahead of the release of September’s payrolls report, while geopolitical tensions in the Middle East continue to weigh on market sentiment. October has started on a shaky note as concerns over Israel’s potential ground operation into Lebanon add to global uncertainties.
In other geopolitical news, a federal judge has unsealed a motion from the Special Counsel detailing the government’s case against former President Donald Trump regarding alleged interference in the 2020 election. Trump faces serious charges in connection to his attempt to challenge the election results.
Finally, analysts have raised concerns that oil markets are underestimating the potential risk of supply disruptions in the Middle East. A retaliatory strike by Israel on Iran’s oil infrastructure could lead to a significant spike in oil prices, with wide-reaching market implications.
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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.
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