| | | | | | | | January 24, 2025 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | | Traders Magazine has been profiling some industry veterans lately and the latest is another retired Cboe professional whom I last saw at a cricket match at the Oval in the south side of London. Andy Lowenthal, whose wife Tracey is a high school classmate of mine, was profiled by the magazine about his career and post retirement activities. ~JJL
| | | | | | Lead Stories | | | Bitcoin Braces for $7.8B Options Expiry as Market Volatility Looms
Muslim Farooque - Yahoo Finance
Bitcoin (BTC-USD) is gearing up for potential volatility as $7.8 billion in options contracts are set to expire on January 31, according to Deribit. With Bitcoin currently trading above the max pain price of $98,000, traders and market makers are bracing for sharp price movements. The max pain level represents the price at which option buyers face maximum losses, while market makers profit the most. Deribit CEO Luuk Strijers added that speculation about a Bitcoin strategic reserve announcement is adding another layer of market anticipation.
Meanwhile, Bitcoin whales are back in accumulation mode, increasing their holdings by 2% between January 14 and 17, according to CryptoQuant. This marks the largest monthly growth rate since mid-December and follows President Trump's inauguration, with expectations of pro-crypto policies.
/jlne.ws/4aBbzGL
Crypto, Multi-Asset Volatility With CBOE: All Options Considered
Bloomberg (Audio)
In this edition of the All Options Considered podcast, BI's Chief Global Derivatives Strategist Tanvir Sandhu gives an update on market volatility and is joined by Catherine Clay, Global Head of Derivatives at Cboe. They discuss cross-asset volatility, flows and crypto options market.
/jlne.ws/40ts9ny
How Trump Came Around to CryptoâEUR"and What Crypto Wants in Return
Monique Mulima - Bloomberg
President Donald Trump was once skeptical of digital assets, saying Bitcoin âEURÅseems like a scamâEUR and that cryptoâEURâ¢s value was âEURÅbased on thin air.âEURÂ
Times have changed. During his latest presidential campaign, Trump pivoted to crypto cheerleader: A July speech at the Bitcoin 2024 conference capped his complete about-face. Since his reelection, cryptocurrency prices have surged âEUR" especially BitcoinâEURâ¢s, which hit a record high above $109,000 on his inauguration day âEUR" amid expectations that his administration will pursue a pro-crypto agenda. On Jan. 23, Trump issued an executive order establishing a working group on digital assets.
/jlne.ws/4gf5zVg
ETFs increase efficiency of markets, new study shows; Academic findings on macro-market behaviour contradict widely accepted previous research
Steve Johnson - Financial Times
The growth of exchange traded funds has improved the efficiency of stock markets, according to new research that runs counter to some previous claims. The global ETF industry has ballooned to almost $15tn in assets, a more than fivefold increase in the past decade, according to figures from consultancy ETFGI, with all but $1tn of this in passive, index-tracking funds. New research from academics from the US, UK and France argues that this surge in passive money has made equity markets more efficient, contradicting some previous research that has found the opposite.
/jlne.ws/4g7pmWF
***** ETFs are the market, taste great and are less filling.~JJL
Blockstream launches two Bitcoin investment funds; Institutional demand for high-yield Bitcoin funds is growing following the successful launch of BTC ETFs.
Sam Bourgi - CoinTelegraph
Blockchain development firm Blockstream has launched two institutional investment funds that provide direct exposure to the company's Bitcoin ecosystem, giving investors the ability to earn yields on Bitcoin-backed loans and other revenue streams. In a Jan. 23 announcement, Blockstream debuted its new asset management business, unveiling the Blockstream Income Fund and the Blockstream Alpha Fund, which are set to launch in the first quarter of this year.
/jlne.ws/3PNtDnt
Vanguard's S&P 500 Fund Is About to Become World's Largest ETF
Katie Greifeld - Bloomberg
A seemingly unstoppable flood of money has Vanguard Group Inc. on the brink of claiming a crown that State Street Corp. has held for decades. Nearly $18 billion has flowed into Vanguard's S&P 500 ETF (ticker VOO) in the opening days of 2025 - more than five times the amount attracted by the closest runner-up - after breaking the record for annual inflows last year with a $116 billion haul, data compiled by Bloomberg show. Assets in the fund have ballooned to $626 billion, putting it on the cusp of eclipsing the $637 billion SPDR S&P 500 ETF Trust (SPY) - currently the world's largest ETF.
/jlne.ws/42yNgXU
Taiwan Retail Investors Buy Record Amounts of US Assets in 2024; Nation's retail traders bought $3.2b in US stocks, ETFs, bonds; Inflows driven by investors looking to diversify: Allspring
Sangmi Cha and Chien-Hua Wan - Bloomberg
Taiwan's retail traders bought a net record amount of US assets last year, as households look beyond traditional insurance products in search of higher returns. Retail investors purchased about NT$105.5 billion ($3.2 billion) combined in US stocks, exchange-traded funds and bonds in 2024, an all-time high, according to data from the Taiwan Securities Association calculated by Bloomberg. Taiwanese inflows into the three American assets also each hit record levels last year.
/jlne.ws/42sMfRl
Hong Kong's bitcoin ETFs could open to Greater Bay Area investors under new measures; New rules further opening up
Xinmei Shen - South China Morning Post
New Chinese investment guidelines aimed at opening financial markets have raised hopes that mainland residents in the Greater Bay Area could soon invest in cryptocurrency-related products in Hong Kong such as bitcoin exchange traded funds (ETFs). The People's Bank of China (PBOC) and four other financial regulators announced on Wednesday that they will "optimise" the Cross-boundary Wealth Management Connect scheme in the bay area and support mainland residents in the region in purchasing "eligible investment products" offered by financial institutions in Hong Kong and Macau. They also plan to expand the scope of participating institutions and qualified products.
/jlne.ws/4ggaV2C
Half of investors want to spend more on hedge funds, says BofA survey
Nell Mackenzie - Reuters
Half of the global investors surveyed by Bank of America's prime brokerage department plan to allocate more money to hedge funds this year, while 37% wanted no change.
The results represented a 2% uptick in those wanting to spend more on hedge funds from the start of 2024, a report by the bank to clients showed on Friday.
/jlne.ws/42rRqAP
| | | | | | Exchanges | | | Cboe FX 2024 Recap and Look Ahead
Cboe
The Cboe FX Team recently sent a note to customers reflecting on the accomplishments of the Cboe FX Team in 2024 and a look ahead to 2025.
As we start 2025, we wanted to reflect on our key achievements during 2024 and provide a preview into what you can expect from us in the coming 12 months to support your FX trading needs.
The past year included several significant market-moving events, ranging from global elections to geopolitical unrest and shifts in central bank monetary policy, resulting in considerable market volatility.
Cboe FX rose to the challenges these events presented: Our systems demonstrated exceptional resilience and handled all-time record volumes, affirming our status as one of the leading institutional FX platforms. We continued to invest in our products and technological scalability, and also made significant strides in our diversification efforts, particularly with our Non-deliverable forwards (NDF) and U.S. Treasuries platforms âEUR" both of which achieved record annual volumes.
/jlne.ws/4hdDkba
ICE Announces Record Environmental Market Trading in 2024
ICE
Intercontinental Exchange, Inc. (NYSE:ICE), a leading global provider of technology and data, today announced that a record number of environmental contracts traded on ICE in 2024, equivalent to over $1 trillion in notional value for the fourth consecutive year. A record 20.4 million environmental futures and options contracts traded on ICE in 2024, up approximately 40% year-over-year (y/y) along with record average daily volume and participation. ICE's EU Carbon Allowance (EUA) futures and options, which represents the world's most liquid carbon derivatives market, and U.K. Carbon Allowance (UKA) futures and options each reached record participation in 2024 and physically delivered carbon allowances worth $40 billion. Across ICE's North American environmental markets, a record 5.6 million futures and options traded in 2024, with a record $12.3 billion physically delivered. ICE's California Carbon Allowance (CCA) market hit record traded volume in 2024 of 3.9 million contracts, up 68% y/y.
/jlne.ws/3Ci7ACp
Miami International Holdings Announces Timeline for Migration of Minneapolis Hard Red Spring Wheat Trading to New MIAX Futures Onyx Platform
MIAX
Miami International Holdings, Inc. (MIH), a technology-driven leader in building and operating regulated financial markets across multiple asset classes, today announced it will migrate Minneapolis Hard Red Spring Wheat (Minneapolis HRSW) futures to its MIAX Futures Onyx platform in Q2 2025. Minneapolis HRSW futures will continue to be available for trading on CME Globex until the launch of MIAX Futures Onyx.
/jlne.ws/40IyBbv
ETF Market Report: 4th Quarter 2024; Discover the latest figures about the development of the ETF segment at SIX Swiss Exchange, one of Europe's top 3 ETF venues - including statistics for Quote on Demand (QOD).
SIX
The fourth quarter was the strongest in terms of revenue in 2024. For the third time in a row, both revenue and the number of transactions in the Swiss ETF market increased. The revenue generated in the fourth quarter of CHF 25.263 billion was the highest since the second quarter of 2022. The number of contracts concluded in 2024 even reached a new record level of 2,455,769.
/jlne.ws/4h6wSlT
| | | | | | Regulation & Enforcement | | | CFTC Names Whistleblower Director Brian Young as Acting Enforcement Chief; Caroline Pham, acting chairman of the countryâEURâ¢s top derivatives markets regulator, announced a series of leadership changes at the agency on Thursday
Mengqi Sun - The Wall Street Journal
The acting chairman of the Commodity Futures Trading Commission has appointed a former prosecutor to lead its enforcement division on an interim basis during the early period of the Trump administration.
Caroline Pham, named as the acting chairman of the derivatives market regulator on Monday when President Trump took office, announced a series of leadership changes at the agency Thursday. These included appointing some of her top advisers to senior policy and legislative roles, including the acting chief of staff and acting general counsel.
/jlne.ws/4gisNK9
| | | | | | Moves | | | Congratulations to Dan Driscoll, who recently retired from the NFA after 42 years. He was celebrated at a party at the NFA wishing him a happy retirement. ~JJL
| | | | | | Strategy | | | How to lower your investment risk when stocks are so expensive; Also, President TrumpâEURâ¢s dominance of AI; cryptocurrency in the first week of his second term; his change-of-mind about tax deductions; and other personal-finance coverage
Philip van Doorn - MarketWatch
JPMorgan Chase & Co. Chief Executive Jamie Dimon said this week that asset prices, including stocks, were âEURÅkind of inflated, by any measure,âEUR during a CNBC interview at the World Economic Forum in Davos, Switzerland.
The S&P 500 trades at a forward price-to-earnings ratio of 22.2, which is up from 20 a year ago. These figures are based on closing stock prices on Thursday and consensus earnings-per-share estimates among analysts polled by FactSet âEUR" all weighted by market capitalization. On this basis, the S&P 500 trades 20% higher than its 10-year average P/E of 18.5 and 38% higher than its 20-year average forward P/E of 16.1.
/jlne.ws/3Ejx6HS
Concerned about a bitcoin crash? A $65B CIO shares a low-cost trading strategy to hedge downside risk
Christine Ji - Business Insider
Bitcoin's 53% price gain since the election has left early bitcoin believers celebrating their bet and crypto laggards wishing they'd bought in earlier.
The rally could continue as President Donald Trump begins his second term. He might be America's most crypto-friendly president, as evidenced by the launch of his $Trump meme coin and his interest in setting up a bitcoin strategic reserve.
/jlne.ws/3E6PUtP
Up 2% This Week
Cboe (Video)
In the #RUTreport, @angiemiles shares key market updates and lets us know the straddle suggests we could see a move ~0.75% today and ~2.4% next week.
/jlne.ws/4gcOZFL
| | | | | | Miscellaneous | | | Five ways to fix the knowledge crisis in the age of Trump; Elites must not be complacent about a widening epistemological gulf which threatens democracy
Gillian Tett - Financial Times
A couple of days ago, at the World Economic Forum in Davos, I heard a flock of global luminaries parsing this week's inauguration of Donald Trump. Solemnly, over a dinner of grilled trout, they shared their fears about economic, political and geopolitical upheaval. Then one world leader turned to Ancient Greek. "We have an epistemological crisis," he declared, referring to the Greek words episteme ("knowledge") and logos ("study of"). More specifically, different social tribes are now interpreting knowledge in such different ways that he fears "democracy is being undermined".
/jlne.ws/40vUp8L
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