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Taiwan launches digital asset ETF market for professional investors
Taiwan’s Financial Supervisory Commission (FSC) has opened investment channels for professional investors to access foreign digital asset exchange-traded funds (ETFs), aiming to enhance market competitiveness while emphasizing risk management. This move allows professional investors to engage with high-risk digital asset ETFs, reflecting a cautious but progressive stance on virtual assets. Taiwan has historically been conservative toward digital assets, implementing strict Anti-Money Laundering measures, particularly for cryptocurrency exchanges. The shift aligns Taiwan with global financial hubs like Hong Kong and Singapore, balancing digital asset exposure with investor protection. Despite this, Taiwan’s central bank remains cautious about launching a central bank digital currency (CBDC), preferring gradual progress.
FTX Token surges 70% as bankruptcy distributions approach
FTX Token (FTT) surged over 70% on Sept. 29, briefly hitting $2.70, driven by speculation of imminent bankruptcy distributions. The rally followed rumors that the bankrupt crypto exchange FTX would begin reimbursing creditors on Sept. 30. However, official filings show the bankruptcy plan is still pending court approval, with a hearing set for Oct. 7. If approved, smaller creditors could see distributions by the end of 2024, while larger claims may not be settled until 2025. FTT later fell to $2.10, maintaining a 30% gain.
Former Chinese Finance Minister Calls for Crypto Study Following U.S. Bitcoin ETF Developments
Former Chinese finance minister Lou Jiwei urged China to study cryptocurrency developments, particularly in light of the U.S. approval of spot Bitcoin exchange-traded funds (ETFs). Speaking at the 2024 Tsinghua Wudaokou Chief Economists Forum, Lou highlighted concerns about crypto's impact on financial stability, including risks of volatility and money laundering. He emphasized the need for China to monitor international policy shifts, especially the U.S.'s changing stance on crypto assets. Despite China's 2021 ban on Bitcoin mining, the country still controls over 55% of the BTC mining network, although U.S. firms are gradually gaining ground.
Trading Desk Insights
Bitcoin is poised to end September with a solid 9% gain, bucking the trend of historically negative returns for the month, which has only seen positive performance twice since 2013. As we look ahead, October has traditionally been a favorable month for Bitcoin, showing just two negative months in the past decade. With the current macro environment characterized by a more dovish monetary policy, increased institutional inflows, and bipartisan support for cryptocurrency regulation in the U.S., the stage seems set for a continued rally, potentially pushing BTC toward its previous highs near $70,000.
Earlier today, Bitcoin experienced a brief pullback but found strong buying support around the $63,000 level, particularly on Binance, where large bids are accumulating. This price action highlights the market’s resilience and the likelihood of continued upward momentum.
Key economic data is set to be released this week, with the JOLTS report on Tuesday and the Non-Farm Payroll (NFP) numbers on Friday. Strong labor market data would signal that the economy remains robust, easing concerns about a potential recession. On the other hand, weaker data could shift sentiment, raising questions about whether rate cuts are driven by economic weakness rather than just the easing of inflationary pressures, which could introduce more uncertainty for investors.
In the ETF space, U.S.-listed crypto ETFs have seen significant inflows. Bitcoin-focused ETFs drew in an impressive $494.4 million, with ARK leading the charge with $203.1 million in inflows for the second day in a row. Ethereum ETFs also saw notable activity, bringing in $58.7 million, largely driven by Fidelity’s $42.5 million inflows.
As government bond yields decline from their recent peaks and are expected to trend lower, this environment could foster growth in decentralized finance (DeFi). With risk-free rates falling, investors are increasingly likely to explore higher-yielding alternatives in the DeFi space.
On the regulatory front, Japan is reviewing its approach to the crypto sector, specifically evaluating whether its current framework under the Payments Act is effective in addressing the evolving needs of the market.
Meanwhile, U.S. stock futures have edged lower ahead of the final trading session for September and the third quarter, both of which are set to close with gains. Despite recent market strength, October is known for heightened volatility, with some of the largest historical market corrections occurring during the month, keeping traders on alert as we enter the final quarter of the year.
Crypto Charts
Disclaimer
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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