Spot Ethereum ETFs flip Bitcoin ETFs with record $333M inflows
Halogen Capital
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Will ETH break through the $4000 level?
Market Movements
Global Macro Market Observations
US stocks closed higher in a shortened trading session, with the S&P 500 gaining 0.6% on Friday to hit a fresh record. The index rose 5.7% in November, its best month this year, driven by $141 billion in record inflows.
Trump’s pick for his Treasury secretary, Scott Bessent, has fueled optimism that tariffs will be measured, boosting US stocks and bonds, and sapping dollar strength.
Tech giants continued to power markets, contributing to a 26% year-to-date rise, fueled by hopes for Fed rate cuts and a resilient US economy.
Malaysia Market Highlights
Malaysia's producer prices continued to decline, with the PPI falling 2.4% in October, following a 2.1% drop in September, according to the Department of Statistics.
Meanwhile, the Ringgit is expected to trade between 4.4275 and 4.4475 against the US dollar next week, with a slight upward trend. This comes as markets anticipate a potential US interest rate cut during the Federal Reserve's policy meeting on December 17-18, 2024.
The Malaysian bond market continues to recover from a soft October, led by government bonds:
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Meanwhile the KLCI broke the trend of weekly losses buoyed by strong earnings from banks to gain 0.28% to end Week 48 at 1,594.29.
Crypto Market Highlights
Crypto markets surged as U.S. traders returned post-Thanksgiving.
Bitcoin futures on CME briefly crossed the $100,000 mark for the second time, a clear signal that institutional interest is holding strong. ETH is also worth a mention, with spot ETFs pulling in $90.1 million in a single day last week, driving an 11.65% rally to $3,688.
But the real standout is XRP — it’s up 14% in just 24 hours, hitting prices we haven’t seen since 2021. A 200% surge this month? That’s no small feat and speaks to renewed confidence in the token.
What We Are Monitoring For The Week Ahead
Looking Ahead: Our Insights
Markets continue to further bring forward the pricing of US policy action, with Scott Bessent’s nomination as US Treasury Secretary being the headline catalyst for the move lower in yields and the Dollar. This could have gone either way, as while he is reportedly a fiscal hawk, he is also a strong proponent of tariffs. Regardless, the market price is always the right price at any given moment, so we continue to enjoy the easier financial conditions as a result.
Sentiment and structural flows have been a tailwind in the past couple of weeks where the lack of tier 1 data has not changed expectations for stronger growth and easier financial conditions in US markets. That said, the coming week’s NFP print (and CPI the week after) will factor heavily into the FOMC rate decision. The market already got a taste of what would happen on a hawkish surprise, with Powell’s previous remarks shifting rate cut expectations for December to even odds.
Unless data comes in to shift the odds towards materially tighter conditions however, US equity indices are likely to achieve new all time highs in December. Seasonal effects and performance chasing behaviour are still expected to kick in for a last hurrah into what has been a great year for equities.
MicroStrategy’s buy pressure faded in the middle part of the week, and the true structure of the Bitcoin market started to be revealed: one in which profit taking was the primary focus. On top of that, MSTR has since increasingly been the subject of negative takes, being labelled monikers ranging from a pyramid scheme to the potential FTX analogue of this cycle. That hasn’t helped sentiment in the market all that much either, though the 90k level in BTC was well supported.
While MSTR’s massive Bitcoin holdings and leveraged flywheel mechanics do introduce a risk to the market, context and timing do matter in this case. The 2025 notes are most certainly convertible to equity at current prices, while the 2027 maturity is an aeon away in market time. Michael Saylor is also betting on other corporations following his lead and pivoting towards holding Bitcoin on their corporate balance sheets, further supporting prices and reducing supply over this period. Semler Scientific is one such example, with its stock soaring nearly 130% this month.
Attention in crypto markets has since shifted to altcoins, with ETH and XRP leading the way on continued momentum. ETH’s breakout above $3,530 has seen it soar to hit $3,700 over the weekend, while XRP continued to see strong momentum with an upward wedge breakout to retake its original place ahead of BNB in the market cap table. ETH beta plays like LIDO and ENS have also seen significant gains, while memes have yet to take off for the week. Sector rotations in altcoins will likely continue, though with how quickly the narrative shifts only highly attuned traders will be able to take advantage of that trend.
We continue to watch the rotation into ETH. Friday’s ETF inflow was a record 335 million for Ether ETFs, and we’ve actually started to see relative basis widening in ETH futures compared to BTC. This does point towards continued interest and likely further positive momentum in ETH from here.
Meanwhile, Bitcoin continues to run into heavy offers ahead of the $100,000 mark, though some of those levels have notably shifted higher. Watching the concentration of offers there shifting higher should indicate a redistribution of price expectations for where BTC trades, allowing BTC to break through eventually. For now though, those sell orders remain a firm barrier to overcome.
Thank you for reading and we’ll see you next week!
Team Halogen
Disclaimer: The information, analysis, and viewpoints presented here are intended solely for general informational purposes and should not be construed as personalised advice or recommendations for any specific individual or entity. For personalised investment decisions, individual investors are advised to consult their licensed financial professional advisor. The opinions expressed by the Manager are based on certain assumptions or prevailing market conditions, and they are subject to change without prior notice. This material is being distributed for informational purposes only and should not be regarded as investment advice or an endorsement of any particular security, strategy, or investment product. While the information provided herein may include data or opinions from sources believed to be reliable, its accuracy and completeness are not guaranteed. Reproduction of any part of this material in any form or reference to it in other publications is strictly prohibited without the express written permission from Halogen Capital Sdn Bhd. Halogen Capital Sdn Bhd and its employees assume no liability regarding the use of this material or its contents.