🌳Yen Value Surges on BOJ Bond Yield Policy Rumors; Tokenized U.S. Treasuries Market Experiences Robust Growth

31 Oct 2023, Tuesday

2:47 AM

🌳Yen Value Surges on BOJ Bond Yield Policy Rumors; Tokenized U.S. Treasuries Market Experiences Robust Growth



S&P Futures 500







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

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What We Are Covering Today

  • Bank of Japan's potential policy shift on bond yields spikes yen value; U.S. Treasury lowers Q4 borrowing estimate amid record deficit concerns (More in Macro & TradFi)
  • Tokenized U.S. Treasury market grows 600% to $698M as crypto’s RWA race intensifies; Singapore, Japan, U.K., Swiss regulators plan asset tokenization pilots (More in DeFi & CeFi)
  • Render's performance surges; Orbs Team indicates potential fiat liquidation on OKX (More in On-Chain)
  • BTC term structure shifts; US Treasury adjustment influences IV (More in Crypto Derivatives)
  • BTC and ETH experienced minimal volatilities in the last 24 hours with the prior analysis holding true (More in Crypto Technical Analysis)

Macro & TradFi

The Japanese Yen recently saw a notable increase in value due to rumors that the Bank of Japan (BOJ) might change a policy concerning government bond yields in a meeting. A report suggested that the BOJ might let 10-year government bonds yield go above 1%, pushing the JPY's value up to about 148.81 per dollar, the highest point since October 11. This puts BOJ Governor Kazuo Ueda in a tough spot as he heads into a meeting ending on Tuesday. The BOJ has a control policy to keep bond yields in check, which, if continued, might tempt speculators to sell the yen expecting its value to decrease. On the other hand, making big changes to this policy could push bond yields higher, which might affect the stability of various inflation metrics. Yusuke Miyairi, Nomura’s Currency Strategist, thinks that the BOJ might make a small adjustment to the policy, which could initially lower the USD/JPY rate but may push it towards 150 in the days following.

Meanwhile, the US Treasury has revised its borrowing estimate for the October-December 2023 quarter to $776 billion from an initial $852 billion, attributing this to higher-than-anticipated revenues and deferred tax receipts from areas affected by natural disasters. Despite the reduction, this figure marks a record borrowing amount for Q4. The news slightly eased ten-year Treasury yields, relieving investors amidst rising fiscal deficit concerns. This adjustment comes as the federal deficit reached $2.02 trillion in the fiscal year through September, prompting a borrowing hike. Amid these developments, market players await the Treasury's forthcoming issuance plans, while addressing the longer-term challenge of bridging the funding gap, exacerbated by the Federal Reserve's ongoing quantitative tightening policy, which is set to continue through 2024.

The DJIA, NASDAQ, and S&P 500 rallied on Monday, marking increases of 1.58%, 1.16%, and 1.20% respectively. Meanwhile, Tesla shares dipped nearly 5% due to a warning from Panasonic about battery production. This warning reignited concerns over sluggish electric vehicle demand, particularly impacting Tesla's higher-priced models which use Panasonic's battery cells. The bearish sentiment extended to the rest of the EV market, with shares of ON Semiconductor, an EV chip supplier, plunging 20% following disappointing Q4 guidance. In contrast, the energy sector saw U.S. crude prices decline, falling $3.23 to settle at $82.31 a barrel. Amid these market dynamics, investors are keenly watching the quarterly earnings reports from major U.S. companies including Caterpillar and Apple due this week.

DeFi & CeFi

  • Tokenized U.S. treasury market grows 600% to $698M as crypto’s RWA race intensifies
  • Singapore, Japan, U.K., Swiss regulators plan asset tokenization pilots
  • OKX latest Proof of Reserves shows exchange over-collateralized
  • Stars Arena CEO steps down
  • Do Kwon’s Terraform Labs seeks early court rejection of U.S. SEC case
  • U.K. publishes final proposals for crypto, stablecoin regulation
  • CME could replace Binance as top Bitcoin futures exchange
  • Animoca Brands courts $50M investment from Saudi Arabia’s NEOM

In 2023, the market for tokenized versions of U.S. Treasuries experienced significant growth from around $100M to $698M as of Monday, as per RWA.xyz. New entrants and existing platform growth contributed to this surge, with protocols like Ondo Finance, Maple, and Backed seeing substantial increases. Additionally, newly launched protocols such as Tradeteq and TrueFi's Adatp3r have attracted millions in deposits. Ethereum has surpassed Stellar in terms of value of Treasury tokens on-chain, with Polygon and Solana also gaining significant assets, signifying a diversifying blockchain landscape for tokenized assets. Yield-bearing stablecoin alternatives, like USDY and USDM, are gaining traction from providing investors with yield earned from backing assets, unlike leading stablecoins like USDT and USDC.

In a similar vein, regulators in Singapore, Japan, the U.K., and Switzerland have initiated Project Guardian to explore asset tokenization tests for various financial products such as fixed income, foreign exchange, and asset management. This collaboration is aimed at advancing cross-border efforts in the field of asset tokenization, which leverages blockchain technology to digitize real-world assets. The project will address legal and accounting treatment of digital assets, identify potential risks and policy gaps, and develop common standards for digital asset market design. Additionally, it will facilitate industry pilot projects through regulatory sandboxes to encourage innovation in the digital asset space.


According to @Santiment, over the last 30 days, Render has surged by 64%, distinguishing itself as one of the top-performing projects in the period. A significant uptick in Render’s social discourse is observed, marking its most active engagement in recent months. Concurrently, metrics such as address activity, network growth, and high-value transactions have all seen marked increases, indicating significant growth of the project and the token.

In other news, according to @lookonchain, following a recent inflow of 150M $ORBS (equivalent to $6.57M) to DWF Labs, there has been a notable transaction from the Orbs Team and Founding Partners' wallet, depositing 72.23M $ORBS (valued at $3.4M) into OKX. Investors should be cautious as this movement may suggest a potential liquidation of their $ORBS positions through centralized exchanges which represents significant selling pressures.

Crypto Derivatives

  • Funding rates remained positive for BTC and ETH.
  • Deribit Implied Volatility Index (DVOL) for BTC and ETH remained relatively unchanged at 53.79% and 50.26%, respectively.
  • 30-day 25-delta skew (C-P) for BTC maintained at 6.30% while ETH rose to 3.73%.
  • The futures market witnessed $93.16M worth of liquidations since Friday, with shorts representing 52.49% of the total.

Top 3 USDT Perpetual Funding Rate Arbitrage Opportunities

Net Annualized APR

Perp (USDT pair)

Long on

Short On













Source: @CexyArbBot Telegram Bot


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.

Over the past day, BTC's implied volatility (IV) remained unchanged since climbing over the weekend, with the 7-day IV at 48.95%, and the 30-day IV reaching 50.20%.

Meanwhile, BTC’s term structure returned to contango with contracts expiring in the short term, from 1-day to 59-day, plummeting in IV. On the other hand, IVs for longer-dated contracts have remained relatively stable. This is possibly due to the US Treasury cutting its estimate for federal borrowing in the quarter due to a stronger-than-expected revenue, offering some relief for investors concerned about the widening fiscal deficit.

Both the 7-day and 30-day 25-delta (call-put) skews have stayed relatively unchanged over the past day. In particular, BTC's 7-day skew, which reflects short-term trader expectations, has risen to 6.30. This suggests that options traders are still favoring calls in anticipation of further upside for BTC’s price.

During the weekend trading sessions on 28th and 29th October, @Paradigm indicated that trading dynamics leaned more towards BTC strategies. Major trades were concentrated around November and December expiries. This included the acquisition of a 652x 3-NOV-23 35500/39000 BTC Custom Strategy and a 515x 29-DEC-23 38000/46000 BTC Custom Strategy. In contrast, for ETH, the key transaction was the purchase of a 10000x 24-NOV-23 1700 ETH Call.

Crypto Technical Analysis

On the 4-hour chart, yesterday’s analysis continues to be at play for BTC with minimal fluctuations observed in the last 24 hours. Currently, BTC's price remains in close proximity to the upper boundary of the previously identified triangle, without clear signs of a breakout. If the price manages to breach the imminent upper boundary of this triangle, BTC's immediate next resistance level is likely to be around $35.5K, corresponding to the upper trendline observed on the daily chart. Conversely, a retracement to the downside may lead the price towards the $33.6K level, which serves as strong support as the lower boundary of the triangle intersects with the lower trendline formed by the local higher lows.

ETH, on the other hand, has mostly aligned with the bullish scenario from our analysis yesterday, making incremental progress along the lower trendline formed by the local higher lows. Consequently, ETH is gradually nearing the previously identified resistance at $1.85K. It's important to note that a bearish sentiment towards the downside remains possible, potentially leading ETH's price towards the support level at $1.74K, a resistance-turned-support zone last observed at the beginning of October.

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