SignalPlus Macro Research Report (20240123): Continuous Outflow of GBTC Funds, FTX Sells Shares
Cryptocurrency continues to perform poorly, with BTC prices dropping nearly 20% from their peak since the ETF launch. As funds continue to flow out of GBTC, spot prices have fallen below $40,000. Reports indicate that the bankrupt FTX has sold two-thirds of its stake in Grayscale Trust (through Marex Capital Markets).
This week, the market has been relatively flat, with U.S. stocks once again reaching historical highs, while the Chinese/Hong Kong stock markets continue to struggle, having fallen 10% since the beginning of the year. The continued decline of Chinese risk assets has intensified expectations for easing policies. Chinese authorities have stated that they plan to utilize 2 trillion yuan (approximately $278 billion) of offshore funds from state-owned enterprises to provide buying support for the domestic market through the Hong Kong Stock Connect, while also reserving an additional 300 billion yuan to support the stock market. Market expectations for further measures to be introduced this week are rising, although it remains uncertain whether these measures can provide the urgently needed structural solutions.
In the U.S., risk sentiment remains unstable. The stock market rose by 2-3% over the past week; however, analysis indicates that the market has softened, with the 10-year yield rising by 19 basis points. Additionally, although economic data has generally exceeded market expectations, the degree of the outperformance has weakened. Citi's Economic Surprise Index was +4 over the past week, a significant drop compared to the average of +37 for 2023. In other words, market expectations have been adjusted upward, while the momentum for economic outperformance has weakened. If the market continues to rule out interest rate cut expectations, it may pose resistance to the U.S. stock market in the short term.
Furthermore, although hard data (such as retail sales and GDP) has remained strong since the end of Q4 last year, soft data has lagged behind. This reminds us of the situation in 2023, where generally soft data tends to lead hard data in long-term trends; however, this was not the case last year, as optimism ultimately prevailed. Will Lady Luck smile upon us again this year?
Considering that the current outlook remains unclear, it seems reasonable that risk sentiment has significantly cooled since the beginning of the year.
The upcoming focus will be on the core PCE data to be released on Friday. Currently, the market expects a month-on-month growth of 0.2%, with a year-on-year growth rate of 2.9-3.0%, while the 6-month year-on-year growth rate is only 1.9%. If the data aligns with expectations, it will provide further support for the Federal Reserve's desired soft landing narrative.
Cryptocurrencies continue to perform poorly. Since the launch of the ETF, the price of BTC has fallen nearly 20% from its peak, with funds continuing to flow out of GBTC, and the spot price has dropped below $40,000. Reports indicate that the bankrupt FTX sold two-thirds of its shares in Grayscale Trust (through Marex Capital Markets), valued at approximately $500-600 million, which could constitute a significant portion of the outflow of funds.
