🌳 US Invests in Semiconductor Sector; Analysts Expect Charles Schwab To Eventually Launch Its Own Bitcoin ETF

29 Jan 2024, Monday

3:26 AM

🌳 US Invests in Semiconductor Sector; Analysts Expect Charles Schwab To Eventually Launch Its Own Bitcoin ETF

BTC

ETH

S&P Futures 500

$41,986.19

$2,258.91

$4,909.25

(+5.32%)

 (+2.04%)

(-0.08%)

Note: All percentages shown above are referenced to the previous business work day's 09:00 (GMT+8)


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Our Daily View

What We Are Covering Today

  • Biden boosts US chip sector; MAS maintains stable monetary policy (More in Macro & TradFi)
  • Charles Schwab is expected by industry experts to eventually release its own BTC ETF; Popular bridge Orbiter Finance to launch its own L2 (More in DeFi & CeFi)
  • More than 20% of the WEN airdrop may be unclaimed and burned; Bitcoin Whale Ratio reached a new recent high (More in On-Chain)
  • BTC contango persists with front-end curve increase; sentiment shifts mildly bullish with recent BTC ETF flow (More in Crypto Derivatives)
  • BTC ascends in channel, hints bullish; ETH shows cautious uptick, eyes $2.3K (More in Crypto Technical Analysis)

Macro & TradFi

The Biden administration is poised to distribute several billion dollars in subsidies to major semiconductor companies, including Intel, Taiwan Semiconductor Manufacturing Co., and others, to bolster new manufacturing facilities in the United States. This strategic move, reported by the Wall Street Journal, aims to enhance the production of advanced semiconductors essential for smartphones, AI, and defense systems. The announcement of these subsidies is anticipated before President Biden's State of the Union address on March 7. This initiative forms part of the broader $39 billion "Chips for America" program, legislated by Congress in 2022, to strengthen the US semiconductor industry and enhance its competitiveness globally. This development is significant as it underscores the US government's commitment to reinvigorating domestic high-tech manufacturing and reducing reliance on foreign semiconductor production, which is critical for economic and national security.

Elsewhere, the Monetary Authority of Singapore (MAS) has decided to maintain its current exchange rate-based monetary policy settings, marking the third consecutive time in keeping them unchanged. This decision aligns with market expectations and underscores MAS's commitment to monitoring global and domestic economic developments while remaining alert to inflation and growth risks. This approach differs from the typical central bank strategy of using interest rates to guide monetary policy. Looking ahead, MAS anticipates an improvement in Singapore's economic prospects, with GDP growth forecasted between 1 to 3 percent. The bank expects core inflation to remain elevated initially but to gradually decline by the end of the year. The policy aims to mitigate imported inflation and control domestic cost pressures, thereby ensuring medium-term price stability. This announcement is part of MAS's new quarterly review schedule, a strategic move to enhance responsiveness in an increasingly volatile global economic landscape.

Last Friday, the US. stock market experienced mixed movements with the S&P 500 slightly decreasing by 0.07%, while the Dow Jones Industrial Average saw a modest increase of 0.16%, and the Nasdaq Composite dropped by 0.55%. These market dynamics came in the context of the Core PCE Price Index, reporting a lower-than-expected year-over-year increase of 2.9%, a decrease from the previous 3.2%. In contrast, Personal Spending showed a stronger momentum, rising to 0.7% month-over-month, exceeding expectations and marking an increase from the previous rate of 0.4%. Investors and analysts are now turning their focus to upcoming US labor market data, particularly the JOLTs Job Openings report, scheduled for release tomorrow at 23:00 SGT, which will provide further insights into the employment landscape and economic health.

CeFi & DeFi

  • Financial experts believe in the eventual release of a Charles Schwab BTC Spot ETF
  • Orbiter Finance to launch an EVM layer-2
  • Stellar's Foundation supports delay of smart-contracts upgrade after bug found
  • Large portion of WEN supply may be burned after the airdrop claiming period ends
  • Algorand Foundation CEO’s Twitter account hacked

Experts in the financial sector speculate that Charles Schwab, a multi-trillion-dollar asset manager, may eventually release its spot Bitcoin ETF. While Schwab customers can buy shares in approved spot Bitcoin ETFs, the company has yet to introduce its proprietary offering. Some experts believe that Schwab's delay may allow it to capitalize on a second-mover advantage, offering lower fees than its competitors. The move could be influenced by Fidelity's success in the ETF race, with Schwab considering entering the market in the future. Despite initially considering cryptocurrencies too speculative, Schwab has shown some enthusiasm toward the crypto space, backing the EDX Markets exchange and offering an ETF that invests in crypto-related companies.

Meanwhile, Orbiter Finance, following the strategic investment from OKX Ventures, has revealed plans for Orbiter Rollup, a new zero-knowledge proof-powered Ethereum Layer 2 (L2) network. Orbiter Finance's cross-chain bridge has attracted over 3 million users looking to swap assets between different Layer-2 rollup networks. With Orbiter Rollup, the protocol aims to create a "meta-layer" that allows users to transfer assets and data across various L2s. The team envisions becoming the layer through which all other L2s are accessed, offering users a seamless experience within the Ethereum ecosystem. Orbiter Rollup will compete with other ZK-powered L2 networks like Manta, zkSync, and Polygon zkEVM. The team has also not announced plans for a token yet, as their primary focus is on product development and user experience enhancement. 

On-Chain

Despite the considerable excitement surrounding the airdrop of the first token launched on the Jupiter Exchange, @h4wk's analysis on the flipside reveals that a significant portion of the community has yet to claim their share of the airdrop, valued at approximately $80 in the current market. As the claiming period approaches its conclusion on January 29th at 3 pm UTC, only about 60% of the tokens have been claimed so far, leaving roughly $40 million in value unclaimed. Projections suggest that even though some participants may claim tokens at the last minute, more than 20% of the total token supply could ultimately remain unclaimed and be subject to burning.

In a recent analysis on CryptoQuant, the Whale Ratio, a pivotal metric in the cryptocurrency market that gauges the movements of large holders, has surged to 93%. This metric is derived by dividing the size of the largest 10 transactions by the total market inflow. Traditionally, during bullish market phases, the Whale Ratio tends to stay below 85%, while in bearish markets, it frequently surpasses this threshold. The current reading of 93% offers insights into the heightened activity of significant market participants, providing valuable information for investors seeking to comprehend their impact on price trends.


Crypto Derivatives

  • Funding rates remained positive for BTC and ETH. 
  • Deribit Implied Volatility Index (DVOL) for BTC and ETH fell back to 44.93% and 45.25%, respectively.
  • The 30-day 25-delta skew (C-P) for BTC and ETH increased to 1.06% and -0.09% respectively.
  • The futures market witnessed $105.04M liquidations, with longs representing 58.18%.

Top 3 USDT Perpetual Funding Rate Arbitrage Opportunities

Net Annualized APR

Perp (USDT pair)

Long on

Short On

19.16%

DOGE

OKX

dYdX

12.79%

XRP

OKX

Binance

12.72%

XRP

OKX

Bybit

Source: @CexyArbBot Telegram Bot

Notes:

1) Pairs observed include BTC, ETH, SOL, BNB, XRP, LTC, and DOGE vs. USDT perps. 

2) CEXs observed include Binance, Bybit, OKX & dYdX.

3) Lookback period is 24 hours.


The IV of BTC has decreased slightly, indicating an ease in market volatility following an initial rise. The 7-day IV fell to 43.20%, closely aligning with the 30-day IV, which remains consistent at 42.72%. This fall follows the BTC’s ETF flow showing a negative trend for the first time since its launch.

The term structure of BTC has predominantly maintained its contango shape, with the front end of the curve displaying an increase as near-term volatility expectations increased. This could be possible due to the US labor data release, with JOLTs Job Openings due tomorrow. 

The 25-delta call-put skews for Bitcoin indicate a shift toward positive skews. The near-term bias, as evidenced by the 7-day skew, has risen to 0.41%, indicating that the market is entering into bearish depths. Similarly, the 30-day skew has risen to 1.05%, which is indicative of bullish sentiment, a slightly lower point compared to 2.20% just yesterday. Collectively, these skews imply that option traders continue to approach the market with more optimism.

Last Friday, @Paradigm highlighted key BTC trades with the purchase of 1800x 29-Mar-24 75K calls and 300x 27-Dec-24 70K calls, as well as a sold position of 125x 2-Feb-24 40K/42K strangle. Noteworthy ETH trades featured the sold position of 12036x 16-Feb-24 2100/2350 bear risk reversal and a position involving 3200x 28-June-24 3000/3500 call spread.

Crypto Technical Analysis

On the 4-hour chart for BTC, the price is currently demonstrating a positive trend within an ascending channel, showcasing a notable upward momentum. Over the weekend, BTC has achieved a decisive break above the critical support resistance level, now turned support, at $41K. This breakout is significant as it could potentially signal a shift in market sentiment from bearish to bullish. The next notable level of resistance is established at around $44K, which represents an approximate 7.3% increase from the current price levels. Conversely, should the momentum reverse, the support within the channel lies near $40K. The Relative Strength Index (RSI) is positioned above the midline at 61.32, indicating a bullish momentum, which supports the current uptrend observed in the price action. This technical posture may suggest a continuation of the current trend, barring any significant market-moving events that could disrupt the established trajectory.

Moving on to the ETH 4-hour chart, ETH is presenting a cautious uptick, with the price action currently navigating within a short-term ascending wedge. This formation hints at a potential consolidation phase following a period of heightened volatility. The price of ETH has been respecting the boundaries of this wedge, indicating a contained bullish sentiment. The lower boundary of this wedge has recently acted as a springboard, propelling the price above the support level at $2.1K. Should the bulls maintain control and propel ETH beyond the wedge's upper boundary, the next key resistance to observe is near the $2.3K mark. This would represent an increase of approximately 4.7% from the current price levels. On the flip side, a breakdown below the wedge could see support tested again at the $2.1K level. The RSI is exhibiting a neutral stance at 50.59, hovering around the midline, suggesting a balance between buying and selling pressure at this juncture.

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