Insights 
VT 
Cryptocurrency Market Rebound
Bittensor (TAO) continued its upward trend for the sixth day, approaching $450. This increase follows Deutsche Digital Assets and Safello’s plan to launch a staked TAO Exchange Traded Product (ETP) on SIX Swiss Exchange in November.
Regarding currency markets, the EUR/USD stabilised around 1.1600 with attention on the ECB decision, while GBP/USD faces difficulty staying above 1.3200. Gold maintained daily gains but remained below $4,000.
This report contains forward-looking statements which may involve potential risks and uncertainties in the market. It is recommended to conduct thorough research before any investment, as these insights are for informational purposes only.
With Belgium’s inflation dipping to the 2% target, we see little reason for the European Central Bank to surprise the market. The expectation is for interest rates to remain on hold, which should keep a lid on volatility in European markets for now. This suggests strategies that profit from low movement, like selling options on the Euro Stoxx 50 index, could be favorable.
The EUR/USD is holding steady near 1.1600, reflecting the market’s wait-and-see approach ahead of the ECB meeting. Given that Eurozone inflation seems to be under control, as confirmed by Eurostat’s recent flash estimate of 2.1% for the whole bloc, the interest rate differential with the US is unlikely to change soon. We could therefore see the pair remain in a tight range, making derivatives like iron condors an interesting play for the weeks ahead.
Trade Tensions and Market Reactions
Easing trade tensions between the US and China are providing a tailwind for global equities. The VIX index, a measure of market fear, has fallen below 15 for the first time this month, signaling increased investor confidence. We believe this environment supports buying call options on major indices like the S&P 500, as we saw similar risk-on rallies after the trade resolutions back in 2019.
In the crypto space, the upcoming launch of a staked Bittensor (TAO) ETP in November is a significant catalyst. We saw a comparable run-up in assets like Bitcoin leading into the approval of spot ETFs in the United States in early 2024. Traders may look to use perpetual futures or call options to gain long exposure to TAO, anticipating continued momentum into the launch event.
Gold’s failure to stay above $4,000 is consistent with the current risk-on sentiment and firming government bond yields, with the US 10-year Treasury note now yielding over 4.75%. This makes holding a non-yielding asset like gold less attractive for institutional money. This may present an opportunity to purchase put options or establish bearish spreads on gold futures, betting that prices will remain subdued as long as geopolitical tensions stay low.
