September 03, 2024

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Qatar Enhances Cryptocurrency Regulation with New Framework by Major SEZ

The Qatar Financial Centre (QFC) has introduced the "QFC Digital Assets Framework 2024," aimed at enhancing regulatory clarity for cryptocurrency within the region. This new framework, developed after extensive consultations with 37 organizations, establishes legal and regulatory guidelines for digital assets, including tokenization, smart contracts, and custody arrangements. As part of Qatar's broader financial innovation strategy, the QFC is also supporting over 20 startups through its Digital Assets Lab. Companies can now apply for licenses to operate as token service providers under this framework.

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Riot Platforms Calls for Bitfarms Board Reshuffle Ahead of Key October Meeting

Riot Platforms, Inc., the largest shareholder in Bitfarms Ltd., is pushing for further changes to Bitfarms' board of directors ahead of a crucial shareholder meeting on October 29. Riot, holding a 19.9% stake, has proposed replacing two current board members with independent directors Amy Freedman and John Delaney, arguing that recent board changes were inadequate. Riot also cautioned Bitfarms against any actions that could entrench the existing board or negatively impact shareholders before the meeting. This move comes as part of Riot's broader effort to improve governance and shareholder value at the Bitcoin mining company.

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Central Banks Set Record Gold Purchases, Yet Bitcoin Outpaces in Performance

Central banks worldwide purchased a record 483 tonnes of gold in the first half of 2024, marking a 5% increase from the previous record set last year and highlighting a continued shift towards store-of-value assets. Major contributors to this surge include the central banks of Poland, India, and Turkey. Analysts suggest that this trend reflects growing skepticism towards traditional Western reserve assets and anticipate that initiatives like a potential gold-backed stablecoin from BRICS nations could further impact global currency dynamics, particularly the U.S. dollar. Gold has outperformed many assets this year with a 23% year-to-date increase, though Bitcoin has seen even higher gains at 37%, despite its noted volatility. Despite Bitcoin's strong performance, central banks continue to favor gold for its stability and long-established trust as a reserve asset.

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Trading Desk Insights

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Technical Analysis:

‍Coming into Labor Day weekend, Bitcoin experienced a gradual increase, climbing from $57,380 to $59,810—a gain of approximately 4.2%. However, this uptick marked a short-term peak as, following yesterday’s daily close around 7 PM EST, the market evidently encountered resistance it could not overtake, leading to a sharp drop of over $1,500 down to $57,750 this morning. The recent bullish momentum has diminished, and traders will now be closely monitoring whether the intraday support at $57,800 can hold. ETH also follows suit, closely following BTC’s movements, and seems bound to test its local support at $2,400.

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Crypto Developments:

As the U.S. edges closer to the upcoming presidential elections, the cryptocurrency sector is increasingly under the spotlight. On August 28, the SEC issued a Wells notice to OpenSea, the largest NFT marketplace, indicating potential enforcement action against the platform. A Wells notice is an official communication from the SEC signaling that enforcement action is being considered, giving the recipient a chance to respond before a final decision is made. OpenSea’s CEO, Devin Finzer, has stated that the SEC is examining whether certain NFTs on the platform should be classified as securities—a determination that could have significant implications for the broader NFT industry.

OpenSea is not the only platform under the SEC’s lens, as earlier in April, Uniswap (UNI) also received a Wells notice, with the SEC alleging that it was operating as an unregistered securities broker. Other major entities, including Coinbase, Kraken, and Robinhood, have similarly faced regulatory actions in the past.

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Equity Markets:

‍The S&P 500 opened 0.7% lower today, following a strong week that brought it near its all-time high. Other major indices like the The Dow Jones and the Nasdaq also dropped by 0.4% and 1.1% respectively this morning.

In the bond market, Treasury yields declined ahead of an anticipated report on U.S. manufacturing, one of the economic sectors most affected by high interest rates and which has been contracting for nearly two years. Concerns over a slowing U.S. economy triggered a sharp decline in stocks earlier this summer, but markets have since recovered on hopes that the Federal Reserve could engineer a soft landing. After raising its main interest rate to a two-decade high to curb inflation, the Fed is expected to ease rates later this month in an effort to prevent a recession.

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Crypto Charts

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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