The parent company of a major US stock exchange is reportedly looking to launch crypto custody services by June. According to a new report by BNB Bloomberg, Nasdaq INC., the owner of the New York-based Nasdaq Stock Exchange, expects its crypto custody services to be available by the end of the second quarter. Ira Auerbach, […]
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The service will reportedly be the exchange operator's first major venture into the crypto industry.
Global securities marketplace Nasdaq Inc. is gearing up to launch its custody services for digital assets by the end of the second quarter of this year, according to Bloomberg.
Nasdaq expects to launch crypto safekeeping services this year, joining a growing pool of traditional finance firms moving into the sector after a spate of bankruptcies https://t.co/Jz8TuFARcs
— Bloomberg (@business) March 24, 2023
As reported by Bloomberg, the exchange group has applied for a limited-purpose trust company charter from the New York Department of Financial Services, which would oversee the new business. Nasdaq's senior vice president and head of Nasdaq Digital Assets, Ira Auerbach, reportedly disclosed this in an interview in Paris, stating that the group is committed to ensuring all necessary regulatory approvals and technical infrastructure are in place.
Initially announced in September, the project will be the exchange operator's first major venture into the crypto industry. The first step for Nasdaq's digital assets division will be to safeguard Bitcoin (BTC) and Ether (ETH), with plans to eventually build a broad suite of services for the group’s digital assets division, including execution for financial institutions, Auerbach reportedly shared.
With traditional financial institutions stepping up to fill the gap left by bankruptcies in the crypto industry, Nasdaq's entry could potentially be a game-changer for the sector. Its reputation and size in the global exchange market could help boost institutional investor confidence in the crypto market, paving the way for more traditional financial institutions to follow suit.
Related: Unstablecoins: Depegging, bank runs and other risks loom
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In 2022, Cointelegraph reported that BNY Mellon, America’s oldest bank, had launched crypto services. The 238-year-old bank formed an enterprise digital assets unit in 2021 to develop crypto solutions and a platform to bridge digital and traditional asset custody.
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The bullish rise of Bitcoin and other altcoins in January helped the Nasdaq Crypto Index to register its third-highest monthly gain.
Bitcoin’s (BTC) bullish surge in January has helped the Nasdaq Crypto Index to register its third-highest monthly gain, with a 38% surge. The cryptocurrency market started the year bullish, defying major bearish market outlooks. Bitcoin and a number of altcoins touched new multi-month highs as inflation cooled off.
The Nasdaq Crypto Index (NCI) recorded its third-biggest monthly gain since its inception in February 2021. The crypto asset index was launched by Brazilian asset manager Hashdex in partnership with the Nasdaq stock exchange. The index consists of eight cryptocurrencies: Bitcoin, Ether (ETH), Bitcoin Cash (BCH), Litecoin (LTC), Chainlink (LINK), and Stellar (XLM), among a few others.
BTC has the highest weight in the index (69.8%), followed by ETH (27.08%). The other altcoins have a weight of less than 1%. Thus, the subsequent rise of BTC and ETH, which have surged over 35% in the past month, is also reflected in the index. The index weight refers to the share of stocks invested in a particular digital asset.
Related: Bitcoin bulls must reclaim these 2 levels as 'death cross' still looms
With a prolonged crypto winter throughout 2022, Bitcoin ended the year at around $16,500, with most altcoins also testing their yearly lows. Many market pundits had warned that the bearish sentiment might continue into the new year owing to the FTX saga unfolding daily. However, the crypto market showed resilience and started the year on a bullish note, registering a double-digit gain for the past month.
On Feb. 1, the Federal Open Market Committee press briefing announced an interest rate hike of 25 basis points. The United States Federal Reserve Chair, Jerome Powell, suggested that inflation has started to cool off in the world’s largest economy. The Fed raise worked wonders for the crypto market, with BTC briefly touching $24,000 and the crypto market cap rising by 4%.
Strong corporate earnings and investors’ anticipation of a Federal Reserve pivot are helping to cement the case for risk assets like Bitcoin.
Bitcoin (BTC) price broke above $22,500 on Jan. 20 and has since been able to defend that level — accumulating 40.5% gains in the month of January. The move accompanied improvements in the stock market, which also rallied after China dropped COVID-19 restrictions after three years of strict pandemic controls.
E-commerce and entertainment companies lead as the year-to-date market performers. Warner Bros (WBD) added 54%, Shopify (SHOP) 42%, MercadoLibre (MELI) 41%, Carnival Corp (CCL) 35% and Paramount Global (PARA) managed a gain 35% so far. Corporate earnings continue to attract investors' inflow and attention after oil-producer Chevron posted the second-largest annual profit ever recorded, at $36.5 billion.
More importantly, analysts expect Apple (AAPL) to post a mind-boggling $96 billion in earnings for its 2022 on Feb. 2. The $2.3 trillion tech company results vastly surpasses the $67.4 billion profit that Microsoft (MSFT) reported in 2022. Strong earnings also help to validate the current stock valuations, but they do not necessarily guarantee a brighter future for the economy.
A more favorable scenario for risk assets came largely from a decline in leading economic indicators, including homebuilder, trucking surveys and contracting Purchasing Managers Index (PMI), according to Evercore ISI's senior managing director, Julian Emanuel.
According to the research from financial services firm Matrixport, American institutional investors represent some 85% of the recent purchasing activity. This means large players are "not giving up on crypto." The study considers the returns occurring during U.S. trading hours but expects the outperformance of altcoins relative to Bitcoin.
From one side, Bitcoin bulls have reasons to celebrate after its price recovered 49% from the $15,500 low on Nov. 21, but bears still have the upper hand on a larger time frame since BTC is down 39% in 12 months.
Let's look at Bitcoin derivatives metrics to better understand how professional traders are positioned in the current market conditions.
The USD Coin (USDC) premium is a good gauge of China-based crypto retail trader demand. It measures the difference between China-based peer-to-peer trades and the United States dollar.
Excessive buying demand tends to pressure the indicator above fair value at 100%, and during bearish markets, the stablecoin's market offer is flooded, causing a 4% or higher discount.
Currently, the USDC premium stands at 3.7%, down from a 1% discount two weeks prior, indicating much stronger demand for stablecoin buying in Asia. The indicator shifted gears after the 9% rally on Jan. 21, causing excessive demand from retail traders.
However, one should dive into BTC futures markets to understand how professional traders are positioned.
Retail traders usually avoid quarterly futures due to their price difference from spot markets. Meanwhile, professional traders prefer these instruments because they prevent the fluctuation of funding rates in a perpetual futures contract.
The three-month futures annualized premium should trade between +4% to +8% in healthy markets to cover costs and associated risks. Thus, when the futures trade below such a range, it shows a lack of confidence from leverage buyers — typically, a bearish indicator.
The chart shows positive momentum for the Bitcoin futures premium after the basis indicator broke above the 4% threshold on Jan. 21 — the highest in five months. This movement represents a drastic change from the bearish sentiment presented by the futures' discount (backwardation) present until late 2022.
Related: Bitcoin price is up, but BTC mining stocks could remain vulnerable throughout 2023
While Bitcoin’s 40.5% gain in 2023 look promising, the fact that the Nasdaq tech-heavy index rallied 10% in the same period raises suspicions. For instance, the street consensus is a pivot on the Federal Reserve (FED) quantitative tightening policy at some point in 2023 — meaning interest rates would no longer be increased.
Bitcoin derivatives and stablecoin demand exited the panic levels but if the FED's expected soft landing takes place, the risk of a recessionary environment will limit stock markets' performance and hurt Bitcoin's “inflation protection” appeal.
Currently, the odds favor bulls as leading economic indicators show a moderate correction — enough to ease the inflation but not especially concerning as solid corporate earnings confirm.
The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
LTC price could drop alongside riskier assets as macro analysts sound a bull trap alarm over this potential "head fake" recovery.
Litecoin (LTC) has rebounded by 130% to almost $100 after bottoming out near $40.50 in June 2022. The primary reasons include broadly improving risk-on sentiment and euphoria around the Litecoin halving in August 2023.
However, technicals suggest that LTC may wipe out most of these gains in the coming months.
Litecoin stands to pare its gains mainly due to a giant bear flag on the weekly char.
A bear flag is a bearish continuation pattern that occurs when the price consolidates inside an ascending, parallel channel after undergoing a strong downtrend. It resolves after the price breaks below its lower trendline with a rise in trading volumes
Litecoin has been painting a similar pattern since early June 2022. Previously, the LTC/USD pair had undergone a 70% price correction from $130 to $40.50. Thus, from the technical perspective, it would resume its downtrend course if its price breaks below the lower trendline.
As a rule, a bear flag breakdown move prompts the price to fall by as much as the previous downtrend's length. Applying the same setup to Litecoin brings its bear flag downside target to nearly $30.50, or 65% lower than current LTC price.
As said earlier, Litecoin's price recovery has primarily occurred in line with similar moves across the risk-on market due to cooling inflation.
For instance, the Nasdaq-100 stock market index has risen approx. 15.50% between October 2022 and January 2023. Similarly, Bitcoin (BTC) has rallied by more than 50% since its November 2022's low of around $15,500.
The weekly correlation coefficient between Litecoin and Nasdaq-100 has been mostly positive at 0.35 on Jan. 27. Similarly, correlation between Litecoin and Bitcoin is now around 0.21.
But many analysts, including Mark Haefele, the chief investment officer at UBS Global Wealth Management, have noted that the ongoing risk-on rally could be a "head fake." In simple words, the ongoing Litecoin rally, under the influence of its risk-on counterparts, could be short-lived.
Independent market analyst Capo of Crypto also agrees, noting:
"The way the upward movement is happening, the way [higher-timeframe] resistances are being tested... it clearly looks manipulated, no real demand. Once again, the biggest bull trap I've ever seen."
However, not everyone is bearish on risk assets such as Litcoin. Popular market analyst Rekt Capital sees Litecoin rallying toward $160 in the coming weeks, citing a monthly chart setup as shown below.
Notably, the chart shows LTC's price undergoing a strong rebound move after testing a multi-year ascending trendline resistance inside the $40-$50 area, which could qualify it for a further uptrend toward the $120-$160 range.
These upside targets have previously acted as supports and resistances. Breaking this key resistance could therefore invalidate the bear flag setup, which happens 54% of all time according to research by veteran investor Tom Bulkowski.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
Gold has seen a significant increase in value in 2023, with spot prices rising from $1,823 per ounce to the current price of $1,937 per ounce. However, Harry Dent, founder of HS Dent Investment Management, believes that this trend may not continue in the near future. Dent predicts that gold may lose value to the […]