SignalPlus Macro Research Report (20240112): The first-day trading volume of BTC spot ETF reached US$4.6 billion

U.S. Bitcoin spot ETFs set a record, with first-day trading volume reaching US$4.6 billion, led by Grayscales GBTC with a trading volume of US$2.1 billion, followed by Blackrocks IBIT with a trading volume of US$1 billion, Bloombergs ETF analyst Eric Balchunas Calling it undoubtedly the largest first trading day in ETF history, the 11 spot ETFs had a total of more than 700,000 individual transactions, twice the number of Nasdaq QQQ transactions, meaning that a large number of small-scale investors participated.

However, it wouldn’t be cryptocurrency news without accompanying warnings, with reports from multiple sources stating that some brokerages and banks are reluctant to promote or allow trading of these ETFs, with Vanguard making it clear that it will not offer these products on its platform, The reason was inconsistency with its core services.

Nevertheless, the door has been opened, and a USD-settled Bitcoin investment target has created a market for TradFi investors that does not require delivery. They can not get involved in the blockchain and stay within the existing legal currency framework. For many investments For investors and institutions, they can now trade BTC (and soon ETH) as a common asset class without having to engage in tiresome and often ideological arguments about the meaning of cryptocurrencies. Unsurprisingly, in just 24 hours, there was news that issuers began to apply for ETFs with covered call options as a strategy. This should quickly spread to various other actively managed ETF strategies involving options and leverage. These strategies have become very common in the TradFi space. 2024 will undoubtedly be an exciting year for cryptocurrency players, especially in the derivatives space.

Back to the TradFi field, the US core CPI data released yesterday was slightly higher than market forecasts (0.31% vs 0.26%), mainly driven by high second-hand car prices, clothing, core services and owner-equivalent rents, food and energy Prices rose by 0.2% and 0.4% respectively, pushing up the overall CPI to rise by 0.3% month-on-month. From a long-term perspective, the low point of core CPI has hovered at an annualized level of 3-4% for most of the past six months, still well above the Feds long-term target, mainly driven by housing and non-housing services inflation. Strong support.

While these data are unlikely to change the markets outlook on the Feds prospects, it may limit the ability of dovish officials to speak out without deviating too far from the overall line. The probability of a rate cut in March remains stable at around 65-70%. The market still expects a full 150 basis points rate cut by the end of 2024.

Mester, a well-known hawkish official of the Federal Reserve, said, I think it may be too early to cut interest rates in March. We need to see more evidence. Since these remarks are not tough, the market actually regards them as dovish information. , she previously pointed out after the December FOMC meeting that the market has priced in the Feds interest rate cut too early, so yesterdays remarks were regarded as a small step towards accepting the upcoming interest rate cut, and bond yields rose by about 6 basis points. The 2-year yield fell 9 basis points, back to 4.25%.

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