Aug. 20, 2024

CoinDesk 20 Index: 1,950  +3.9% 
Bitcoin (BTC): $60,661  +4.4% 
Ether (ETH): $2,653  +3.0% 
S&P 500: 5,608.25  +1.0% 
Gold: $2,562  +2.4% 
Nikkei 225: 38,062.92  +1.8% 

A message from iShares

Bitcoin rose past $61,000 early Tuesday as U.S.-spot ETFs recorded their second-highest inflow of the month. Bitcoin ETFs recorded over $61 million in net inflows, the highest since $192 million on Aug. 8, data from SoSoValue shows. BlackRock’s IBIT led with $92 million of inflows, while Bitwise’s BITB recorded $25 million of outflows. Japan’s Metaplanet said it completed a BTC purchase worth $3.4 million, bringing its total holdings to 360.368 BTC. At the time of writing, bitcoin is priced just below $60,800, an increase of 4.6% in the last 24 hours, outperforming the broader crypto market, which has risen 4%, as measured by the CoinDesk 20 Index.

Traders speculating on how the U.S. election might affect the digital assets industry have locked up millions in bitcoin options tied to the event. The election expiry options began trading on Deribit a month ago. The notional open interest, or the dollar value, of the number of active options contracts was $345.83 million, according to Amberdata. Call options, which offer an unlimited upside payoff potential at the expense of limited loss, accounted for 67% of the total open interest. The rest came from put options, amounting to a put-call ratio of less than 0.50. In other words, twice as many calls were open as puts, reflecting bullish expectations from the outcome of the elections.

State Street is partnering with digital asset custodian Taurus for its tokenization plans with the intention of extending to crypto custody once the U.S. regulatory environment improves. State Street, which has $44.3 trillion in assets under management, plans to go live with tokenized versions of traditional assets. The bank has been “very vocal” about the need to change SAB 121, which could force banks seeking to hold crypto to maintain an onerous amount of capital to compensate for the risk, Donna Milrod, chief product officer and head of Digital Asset Solutions, said in an interview. “While we're starting with tokenization, that's not where we're ending. As soon as the U.S. regulations help us out, we will be providing digital custody services as well."

The leading U.S. economic indicators are still pointing to a slowdown, but no longer signal a recession, data from the Conference Board showed Tuesday. 

The organization's Leading Economic Indicators (LEI) declined 0.6% in July to 100.4 following June's 0.2% drop. The LEI comprises several forward-looking indicators such as average weekly hours in manufacturing, average weekly initial claims for jobless insurance, ISM new orders index, stock prices and leading credit index. It helps identify shifts in economic trends and turning points in financial markets and is considered one of the most reliable signals of a recession.

The continued decline in the LEI indicates impending headwinds for the economy. However, the annualized six-month change narrowed to -2.1% in July from -3.1% in June, a sign the risk of recession is lessening.

The latest reading is likely reassuring to risk asset bulls. Perhaps the pain trade in stocks and cryptocurrencies is now on the higher side, given the backdrop of the recent market slide and the resulting dour sentiment.

- Omkar Godbole