The finance community is abuzz about a new type of exchange-traded fund connected to the cryptocurrency that may start trading as soon as Thursday.
Bitcoin Bulls Join Wall Street
The dawn of a new era in crypto trading is expected today after SEC’s approval for the creation of new exchange-traded funds (ETFs). This approval promises to make it easier for investors to buy and sell Bitcoin. Regulatory authorities have authorized 11 fund managers, including Wall Street giants like BlackRock and VanEck, to launch new crypto investment products.
In anticipation of the decision, companies are aggressively cutting their management fees to gain quick profits. Crypto exchange Coinbase’s chief legal officer, Paul Grewal, called it a “foundational change” due to the significant inflow of money into the asset class. Matthew Sigel, Head of Digital Asset Research at VanEck, referred to it as a “historic” moment.
Bitcoin reached its highest level in 21 months this week, propelled by a series of high-profile endorsements and broad legal actions against some of the sector’s biggest players. As of this morning, with trading below $47,000, the market capitalization of the digital token has reached approximately $920 billion.
How Big Can the Market Get?
Crypto investors and Bitcoin ETF proponents believe the possibilities are limitless. Grewal said investors could potentially pour billions of dollars into digital asset markets over the short term and trillions over time. However, some outside the sector also see the growth potential. Deutsche Bank researchers Marion Laboure and Ksenia Duxfield-Ensworth wrote a note to investors today, expressing optimism about price increases in the coming year.
Second, approval legitimates crypto. SEC Chairman Gary Gensler, a vocal critic of cryptocurrencies, stated that the new Bitcoin investment products will have security features familiar to traditional investors. However, he warned that the approval is not an endorsement. In a statement, he said, “Bitcoin is primarily a speculative, volatile asset used for illegal activities such as ransomware, money laundering, theft, and terrorist financing.” Bitcoin advocate Kathy Wood, whose firm received approval for the Bitcoin ETF yesterday, said Gensler has “tarnished” the sector.
Is Ethereum ETF Next?
Industry insiders in Washington and its stakeholders believe that the approval of Bitcoin ETFs will pave the way for similar funds for other cryptocurrencies. VanEck has a pending application for an ETF. Ethereum, the second-largest cryptocurrency by market capitalization, is closely associated with the market for market capitalization.
Natural Gas Mega Merger: A Game-Changer for Energy Sector
The colossal merger between Chevron and Chesapeake Energy is now endorsed by the Natural Gas Titans Alliance. Chesapeake Energy announces its acquisition by Chevron in a staggering $7.4 billion all-stock deal, solidifying Chevron’s position as one of the nation’s leading energy producers. Despite recent challenges in the oil and gas sector due to low oil prices impacting industry profits, this deal marks a significant move in the energy landscape.
Tech Giants Announce Workforce Reductions Amidst New Wave
Tech industry leaders are ushering in a new era of downsizing. Amazon reveals plans to cut hundreds of jobs across its Prime Video and studio businesses, while streaming platform Twitch anticipates slashing over a quarter of its workforce. Google joins the trend, aiming to streamline operations and double down on artificial intelligence, announcing layoffs across various departments.
Chris Christie Withdraws from Presidential Race Amidst Controversy
Chris Christie, a vocal critic of former President Trump, abruptly suspends his long-standing presidential campaign. Christie’s fiery remarks captured on a hot mic, where he suggested Nikki Haley was “smoked,” appeared to weaken his efforts to counter Donald Trump. Meanwhile, Haley and Ron DeSantis engage in a heated exchange, and Trump participates in a town hall on Fox News.
Alaska Airlines Grounds Boeing 737 Max 9 Fleet
Alaska Airlines takes precautionary measures by grounding its Boeing 737 Max 9 planes. The airline announces the suspension of flights using these aircraft at least until Saturday, awaiting guidance on inspections from the Federal Aviation Administration (FAA). The move follows concerns about Boeing’s initial regulations, urging necessary modifications.
Skydance Media in Talks for National Entertainment Takeover
Skydance Media is reportedly bidding for the national entertainment conglomerate led by Shari Redstone. David Ellison, CEO of Skydance, engages in cash discussions with investors from Paramount Global’s original group, involving his father, Oracle founder Larry Ellison. If successful, the conglomerate is poised to consider a merger with Skydance for projects like “Top Gun: Maverick” in the upcoming earnings season.
Wall Street Eyes Strong Q4 Earnings Amid Global Economic Uncertainty
As the third quarter ends with promising profit growth driven by persistent currency fluctuations and rising oil prices, Wall Street anticipates robust Q4 earnings announcements. Major banks such as Bank of America, BlackRock, and JPMorgan Chase are expected to unveil substantial gains. Analysts, however, remain cautious, predicting only a modest year-on-year increase in low-single digits, predominantly led by the technology and utilities sectors.
Big Tech Dominates Stock Market Gains in Third Quarter
In the previous quarter, six tech giants, Alphabet, Amazon, Apple, Meta, Microsoft, and NVIDIA, collectively anticipate a 56% year-over-year surge, as per Bank of America. Despite global economic slowdown signals, some on Wall Street are optimistic about doubling the 2023 stock gains for Big Tech, according to The Bansean Group’s Chief Investment Officer David Bansean.
Mixed Picture for Banks Amidst Global Economic Slowdown
FactSet’s Vice Chairman and Director of Banking and Special Finance, Sean Ryan, paint a mixed picture for banks. While the last quarter witnessed a notable drop in Treasury revenue, he points out that strong Q3 profits in holding companies’ portfolios signaled positive traction. However, ongoing weaknesses in investment banking businesses and uncertainties in the corporate real estate market could exert pressure on earnings.
Shipping Industry CEO Warns of Security Threats in Gulf Waters
Vincent Clark, CEO of shipping giant A.P. Moller-Maersk, issues a cautionary note in The Financial Times regarding commercial shipping attacks by Houthi forces backed by Iran. The disruptions, compelling some companies to resume operating ships around Africa, could adversely impact global trade. Clark underscores the need for vigilance in navigating uncertain waters in the coming days, weeks, or months.
Disney’s Latest Domestic Headache
Disney has been facing several challenges, including pressure from activist investor Nelson Peltz and questions about its corporate strategy and succession plan. Now, it is grappling with ESPN’s headache, stemming from the emergence of a significant portion of its profits due to one of the game network’s newest stars.
The centerpiece, Pat McAfee, a former NFL punter turned shock jock, became an ESPN figure through a purported $85 million deal with the betting company FanDuel, acquired by ESPN last year. However, McAfee holds an unusual position at ESPN: he is both an employee visible in college football and the NFL and an entertainer with his daily show, indicating less control over him by the network.
What Happened: Firstly, New York Jets quarterback Aaron Rodgers, a frequent guest on McAfee’s show, revealed a late-night altercation with comedian Jimmy Kimmel, one of ABC’s biggest stars and under Disney’s ownership – a relation linked to Jeffrey Epstein. Following The New York Post’s publication of ineffective ratings data for McAfee’s show, the host accused ESPN’s senior executive Norby Williamson of leaking information. McAfee had long referred to Williamson, known internally as “the rat.”
McAfee presents a dilemma for Disney. His public feud with colleagues, like challenging another ABC star, was extraordinary. ESPN’s former star Jemele Hill argued that on the network, there’s no “aggressive offense” worse than the “talent-on-talent crime.” (McAfee has apologized to Rodgers for the episode and claimed he won’t appear in the show for the remainder of the NFL season, later suggesting he was joking.)
However, recognizing McAfee’s popularity among young sports fans, Disney has laid a condition that McAfee is an asset for the future. ESPN noted on January 5th that McAfee’s show attracted an average of 886,000 viewers per episode on its network, YouTube, and TikTok in December, allegedly bringing Generation Z viewers that other shows don’t.
Two Warnings: According to The New York Post, on ESPN alone, McAfee lost 48% of his major audience. ESPN only licenses McAfee’s show, meaning no additional revenue for the network from other platforms. Other concerns in the entertainment world include ESPN having more games shown on ABC, potentially consolidating both networks further. However, more controversy on ESPN could harm this process.