Traders Forecast an 89% Chance Bitcoin Spot ETFs Will be Approved ✅

🐺 Hi pack-mates,

This is Howling Markets, the tire chains needed to get some traction in the snowy financial markets!

Today we will be covering:

• Education: What Is Polymarket? 📈

• Rolls Royce Earns the 2023 Top Market Winner Spot in Europe 🚨

• Traders Forecast an 89% Chance Bitcoin Spot ETFs Will Be Approved by Mid-January ✅

• Equity and Debt Markets Daily Update ⚖️

• And more!

Market Watch 👀

What is Polymarket?

Polymarket is a new and innovative decentralized prediction marketplace, founded in 2020, where users can bet on every event imaginable. This platform is based on the Ethereum blockchain and uses a Layer-2 scaling solution called Polygon.

However, Polymarket does not present itself as a betting platform, but rather as an extremely interesting mix between a stockbroker and a forecasting center where you will be able to find all sorts of predictions directly based on market sentiment.

This is because all bets on Polymarket have only two outcomes, either “yes” or “no”, and each event is quoted with a price between $0 and $1. Then the market participants will be able to purchase shares of either one of the two sides and once the poll reaches maturity the winning side will be priced at $1 and the losing side at $0.

So, the price of a “yes share” reflects the probability, according to the market’s expectations, that the given decision will be yes at maturity.

It is important to note that all the shares are marketable, meaning that you will be able to buy and sell before maturity and the price fluctuates as the expectations change. Additionally, as opposed to other similar platforms, Polymarket takes a 0% fee on your earnings.

In today’s newsletter we will see what people think about the approval of the new Bitcoin ETF!

Rolls Royce Earns the 2023 Top Market Winner Spot in Europe

As we know, the European stock market is much less volatile than the one in the United States, often returning lower gains paired by less risky drawdowns throughout the year.

In 2023, the Stoxx600 (ticker: SXXP) recorded an annual gain of 12.76%, almost precisely half of what the American counterpart did. Additionally, if we look at the charts, we can notice how the European stock market mainly moved sideways throughout the year without displaying any real upward momentum.

However, even in this sideways enviroment some stocks have set themselves apart by achieving amazing returns in 2023.

Rolls Royce (Ticker: RR.), the British airplane engines and luxury car manufacturer rose by 221.57% throughout 2023, almost surpassing the returns of Nvidia, the best performer among the Magnificent 7 stocks.

Such an extraordinary performance came as the result after a year of great news for the business. In January the company had announced that their focus would have been to increase profits, cashflows and returns in order to fully recover from the covid-induced aviation market crash.

However, what really pushed the price higher was the fact that they really pursued this quest for higher returns. By August, the investors were hit by a positive +261.06% surprise on the returns caused by a fivefold increase in the operating profits for the first 6 months of the year.

Today’s Howling Question

And now, it is time for our howling question!

We have talked about how Polymarket makes learning what market participants think extremely easy. What do you think is the market expectation that Bitcoin will achieve its all-time high before March 31^st?

a) 5%

b)  15%

c)  25%

d)  35%

e)  50%

Try to answer the question by yourself, and then check the correct answer after the last interesting news!

Traders Forecast an 89% Chance Bitcoin Spot ETFs Will be Approved by Mid-January

According to Polymarket, traders are betting on an 89% chance that at least one of the 14 Bitcoin’s spot ETFs will be approved by the 15^th of January.

Such information gives us many valuable insights. First of all, we can see how at this point it is almost certain that not only the ETFs will be launched in 2024, but also that they will become live well before the end of the first month!

Secondly, which is probably even more relevant, this forecast tells us that the current Bitcoin price has almost entirely already priced in the future ETFs’ launch. Because of this, it is most likely that the short-term future of this crypto is almost entirely downside.

Up to this point, almost half a million dollars in bets has been placed on this question and the “yes” price has surged by 78% since its all-time low.

However, there are also many investors buying “no” shares, and most of them have the same reason: insurance. Because the Bitcoin has fully priced-in the approval, if the SEC refuses the all the ETFs the price is likely to dump. So, by buying “no” shares at a low price, bitcoin investors will be able to earn a nice sum even if Bitcoin plummets.

Do you think that a Bitcoin ETF will be launched before the 15^th of January? How do you think the price would react after the launch?

Equity and Debt Markets Update ⚖️

And now, our daily markets update!

The first market update of the year starts with some grim news about the stock market. During the 2^nd of January the market opened lower as the price gapped down during the premarket trading hours.

Then, throughout the session the price pushed much lower, but it eventually stabilized and recovered closing the day at -0.57%.

On the other hand, the bond market behaved similarly, but was much more explosive in its moves. During the trading session the 10 year US government bond yields reached a high of more than 4% with respect to the previous day, only before coming back down to a +1.78% increase.

Answer

The correct answer is c) 25%.

More specifically, as of today market participants believe that there is a 24% chance that Bitcoin will surpass its all time high of $67,559 before the 31^st of March.

However, it is important to note that the price has risen quite significantly from the 18% level it registered during the first half of December.

Howl-Worthy Memes 😂

🐺 See you next time!

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