BETTING BIG

The trading platform, Debirit, has seen traders lock in almost $1 billion in call options at a $100,000 strike, showcasing optimism in the market. This surge in call options at the $100,000 strike position is the highest among all BTC options on Deribit, with call options making up more than half of the total open interest of $14.15 billion. According to the trading platform, traders are looking to benefit from potential upward movements in the market by purchasing out-of-the-money options like the $100,000 call, and as the U.S. election results near, it has been stated that there is also significant interest in put options at the $45,000 strike to hedge against potential downside risks. Moreover, following the election, there is an anticipation of a market rally, with call options gaining favor over put options. Looking towards December, call options at the $100,000 strike remain popular, hinting at expectations for a year-end surge in the market.

GRADUAL APPROACH

At his most recent speech, Federal Reserve Chair Jerome Powell addressed the central bank’s future monetary policy stance, indicating that any further interest rate cuts will be incremental but gradual. Powell highlighted a cooling trend in housing-related costs and expressed optimism that inflation will eventually ease across the broader economic landscape. In addition Powell emphasized the importance of balancing inflation and labor market support, but remarked that the next policy decisions will be being data-driven. Also, Powell stated that the anticipated two additional rate cuts for the year are expected to be smaller, quarter-point reductions, in contrast to market expectations of more aggressive easing. 

STAYING POSITIVE

BlackRock has acknowledged the varying performance of its recently-launched Ethereum ETF, ETHA, compared to its Bitcoin ETF, IBIT. The company recognized that despite IBIT receiving substantial inflows and reaching $24 billion in assets under management in a short period, ETHA has struggled to attract similar levels of interest and investment. In fact, ETHA only managed to accumulate $1 billion within a month since its launch in July. BlackRock stated that the lower volume and inflows for ETHA have been attributed to the complexity of Ethereum’s investment narrative, which may be deterring potential investors, nevertheless, despite this, the company also remarked that it remains optimistic about the future growth prospects of Ethereum and is dedicated to educating clients about the potential benefits of investing in the cryptocurrency. 

SAFETY NET

According to recent data, Equal Weight ETFs, which are designed to evenly distribute investments across all components of a specific index, have attracted over $2 billion in inflows in September. Major funds in this category, such as the iShares S&P 500 Equal Weight UCITS ETF and the Xtrackers S&P 500 Equal Weight UCITS ETF, have seen significant inflows, with the former receiving $1.2 billion and the latter $750 million in new assets. Additionally, the Xtrackers S&P 500 Equal Weight ESG UCITS ETF saw $560 million in inflows. The surge is attributed to the current economic uncertainty in the U.S., which although it has notably improved lately due to decreasing inflation and solid growth, investors remain cautious about the potential for a recession, prompting them to seek diversification strategies to mitigate concentration risks.

INTERNATIONAL NEWS

Despite the recent rally in Chinese equities, which saw their best performance in 16 years, investor enthusiasm seems to have begun to wane as the $4.7 billion iShares MSCI China ETF (MCHI) and the $4.3 billion iShares Trust China Large Cap ETF (FXI) remained relatively stable, with MCHI even losing some ground This followed the recent parallel drawn between the current Chinese market situation and the U.S. equity scenario in 2008, in which some experts have highlighted that there is a possibility of market volatility happening, as continuous uncertainties persist regarding the Chinese economy, particularly regarding the long-term impacts of recent stimulus measures. Moreover, it is worth noting that as Chinese economy continues to recover, the MSCI China Index remains well below its peak levels from early 2021.