NYDIG Report: Bitcoin Volatility Expected Around ETF Dates, Mt Gox Delays, and Fed Rate Impacts

Key ETF Dates Stir Volatility Expectations in Options Market

The options market is signaling potential significant price movements in bitcoin around crucial ETF dates, according to NYDIG weekly report. The forward volatility of at-the-money (ATM) options from October 13th to October 20th, 2023, has surged by 9.6 points. This data suggests traders anticipate a 5.5% single-day move in bitcoin’s spot price during this period. The SEC is set to respond to the BlackRock iShares Bitcoin Trust ETF by October 17th, 2023. Additionally, the SEC has until October 16th to address the Bitwise Bitcoin ETP Trust. Market data indicates traders are bracing for price swings, possibly due to an approval or denial. Another pivotal date is October 13th, the last day for the SEC to appeal the Grayscale case decision.

Mt Gox Delays Creditor Payouts to 2024

The Mt Gox bankruptcy trustee has postponed creditor payouts by a year, moving the deadline from October 31st, 2023, to October 31st, 2024. This delay extends the resolution of a significant event in crypto history, involving approximately 138K BTC, valued at roughly $3.7 billion at current rates. The industry has closely monitored the fund disbursement due to its potential market impact. The resolution has been pushed to 2024.

Fed Rate Policy Sends Ripples Through Financial Markets

The Federal Open Market Committee (FOMC) decided to maintain current interest rates this week. However, hints of a potential rate hike later this year caused asset prices, including stocks and bonds, to decline. Bitcoin initially dipped but ended the week unchanged, contrasting with the performance of stocks and bonds. Over the years, various macroeconomic factors have been proposed as influencers of bitcoin’s price. Yet, none consistently explain its decade-long price history. While some factors, like inflation expectations, may play a role in shorter time frames, bitcoin’s unique characteristics remain its primary price drivers.

Market Overview

Bitcoin’s price remained relatively stable despite weekly fluctuations. In contrast, equities faced challenges due to looming interest rate hike uncertainties. The S&P 500 fell by 2.3%, and the Nasdaq Composite dropped by 5.0%. The fixed income market also saw declines, with investment grade corporate bonds, high yield bonds, and long-term US Treasuries falling by 1.3%, 1.4%, and 3.0%, respectively. Gold’s price slightly increased by 0.4%, while oil declined by 0.6% after a recent rally.

Other Noteworthy News

Mt Gox announced a change in repayment deadlines.

Grayscale Investments is filing for a new Ether Futures ETF.

The NYDFS updated its virtual currency oversight.

The Lazarus Group is reportedly intensifying its crypto hacking efforts.

The U.S. SEC’s Crypto Enforcement Chief hinted that charges might extend beyond Coinbase and Binance.

Citi is developing new digital asset capabilities for institutional clients.

DTCC collaborates with Chainlink to bring capital markets on-chain.

Tether resumes its stablecoin lending and invests $420 million in cloud GPUs.

PayPal USD is now accessible on Venmo.

Upcoming Events

September 29: CME expiry

October 3: Valkyrie Bitcoin and Ether Strategy ETF effective date

October 13: SEC appeal deadline in Grayscale case

October 16: SEC’s response date for the first spot bitcoin ETF (Bitwise)

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Reuters: Federal Reserve Announces Job Cuts

Despite public reassurances about the robustness of the U.S. economy, the Federal Reserve is preparing to downsize its workforce, according to Reuters. The central bank has confirmed plans to eliminate approximately 300 positions by the end of this year. This decision marks the institution’s first notable personnel reduction since 2010. Currently, the Federal Reserve system, which consists of 12 regional reserve banks, employs around 21,000 individuals.

Although the exact number of layoffs has not been specified, the majority of the reductions will target support roles. This includes specific technology positions that are now considered superfluous.

Interestingly, while this move has garnered attention, job cuts at the Federal Reserve are not unprecedented in its history. According to a Reuters report, the U.S. Federal Reserve system had previously made similar reductions, emphasizing the rarity but not the novelty of such decisions.

Federal Reserve Chair Jerome Powell recently voiced his surprise at the resilience of the U.S. economy in the face of rising inflation and interest rates. “Economic activity has been stronger than we expected, stronger than I think everyone expected,” Powell stated in a press conference following the central bank’s most recent monetary policy meeting. Reflecting this sentiment, Fed officials have adjusted their economic growth forecasts upwards and project a decline in unemployment rates.

However, Powell also recognized the inherent challenges in curbing inflation to sustainable levels. He hinted that achieving this might require a “softening” in the job market. While Powell is optimistic about the possibility of a “soft landing” — a situation where inflation is managed without inducing a recession — he also warned that such an outcome could be influenced by external factors beyond the Fed’s control.

Overview of the Federal Reserve’s History

Established in 1913 by an act of Congress, the Federal Reserve System, commonly known as the Fed, serves as the central bank of the United States. Its primary mission was to stabilize the American banking system. Over its century-long existence, the Fed has navigated through various economic challenges, from the Great Depression to the Great Financial Crisis and the recent COVID-19 pandemic. The institution has evolved, adapting to changing economic landscapes and implementing policies to ensure financial stability and economic growth. This website offers a comprehensive look into the Fed’s history, detailing its key events, policy actions, and the influential figures that have shaped its trajectory. The Fed’s journey reflects its commitment to safeguarding the nation’s financial health, ensuring the flow of money and credit, and responding to economic challenges with informed decisions.

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NCR Corporation Announces Details of Upcoming Separation

NCR Corporation (NYSE: NCR) has disclosed further details concerning its previously announced separation of its ATM-focused businesses, including Self-Service Banking, Payments & Network, and Telecommunications and Technology sectors. The separation will involve the distribution of all common stock of NCR Atleos Corporation (formerly NCR Atleos, LLC) held by NCR Corporation to its common stockholders.

Key Dates and Details

Record Date: October 2, 2023

Distribution Date: October 16, 2023, 5:00 p.m. local New York City time

Trading Details: NCR Atleos is set to commence “regular-way” trading on the NYSE under the ticker “NATL” on October 17, 2023. Post-separation, NCR Corporation’s ticker symbol will transition to “VYX.”

The Board of Directors has approved a pro rata distribution, where each holder of NCR Corporation common stock will receive one Atleos common stock share for every two shares of NCR Corporation common stock held as of the close of business on the record date. This distribution is anticipated to be tax-free for U.S. federal income tax purposes, contingent upon certain conditions outlined in the Form 10 and the related Information Statement from August 14, 2023.

Following the distribution, Atleos will operate as an independent, publicly-traded entity on the NYSE. NCR Corporation will undergo a renaming to NCR Voyix Corporation (“Voyix”) and will retain no ownership stake in Atleos.

Michael D. Hayford, CEO of NCR Corporation, remarked, “Today’s announcement marks a major milestone in the completion of the separation of Atleos from NCR.” He emphasized the company’s longstanding history of innovation and expressed confidence in both Voyix and Atleos’ future prospects.

Tim Oliver, Atleos’ CEO-designate, and David Wilkinson, Voyix’s CEO-designate, also shared their enthusiasm for the upcoming changes, highlighting the dedication of their respective teams and the promising future for both entities.

Additional Information

No physical share certificates of Atleos will be issued; the distribution will be in book entry form.

The distribution is subject to certain conditions, including the availability of debt financing on acceptable terms.

The distribution is intended to be tax-free for U.S. federal income tax purposes. Stockholders are advised to consult their tax advisors regarding the tax implications.

About NCR Corporation

NCR Corporation, headquartered in Atlanta, Georgia, is a pioneering force in the development of technology platforms for self-directed banking, stores, and restaurants. With a global workforce of 35,000, NCR Corporation has established its trademark in the United States and several other countrie

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SEC Charges Citadel Securities Over Short Sale Regulation Violations

The U.S. Securities and Exchange Commission (SEC) has announced settled charges against broker-dealer Citadel Securities LLC for non-compliance with Regulation SHO, a framework aimed at curbing abusive short selling practices. The regulation mandates broker-dealers to appropriately mark sale orders as either long, short, or short exempt. Such records play a pivotal role for regulators in monitoring and preventing illicit short selling activities.

Citadel Securities, based in Miami, has consented to pay a penalty of $7 million to settle the SEC’s charges. Citadel Securities LLC is a leading global market maker, specializing in equities, equity options, and interest rate swaps. The firm’s commitment to providing liquidity and transparency to the financial markets has established it as a key player in the industry.

The SEC’s order reveals that over a span of five years, Citadel Securities mislabeled millions of orders. Specifically, certain short sales were inaccurately labeled as long sales and vice versa. This discrepancy was attributed to a coding error within Citadel Securities’ automated trading system. Consequently, the firm relayed this flawed data to regulators, including the SEC, throughout this duration.

Mark Cave, Associate Director of the SEC’s Division of Enforcement, commented on the matter, stating, “Compliance with the order marking requirements of Reg SHO is vital in our regulatory endeavors to clamp down on market malpractices, such as ‘naked’ short selling.” He further emphasized the significance of the action against Citadel Securities, noting that non-adherence to Reg SHO’s stipulations can adversely impact the precision of a firm’s electronic records. This, in turn, can deprive the Commission of crucial market-related data.

The order has charged Citadel Securities for contravening Rule 200(g) of Reg SHO. While the firm has neither admitted nor denied the findings, it has agreed to a cease-and-desist order. This includes a censure, the aforementioned $7 million penalty, and specific undertakings. Among these are a written assurance that the coding error has been rectified and a comprehensive review of the firm’s computer programming and coding logic pertinent to the processing of relevant transactions.

The SEC’s inquiry into the matter was spearheaded by Seth M. Nadler of the SEC’s Home Office, with assistance from various divisions and units within the SEC. The investigation was overseen by Mr. Cave.

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