Insights 
VT 
The Canadian unemployment rate is projected to rise in September with further cooling in the labour market. This situation could lead to additional rate cuts. The Canadian Dollar remains valued below the 1.4000 mark.
US tariffs continue to play a role in foreign policy and public finance. Despite daily news updates, these tariffs are firmly maintained. The US government has recently reiterated its dedication to using tariffs as a strategic policy tool.
Coinbase and Mastercard Bidding War
Coinbase and Mastercard are reportedly in a bidding competition to acquire the stablecoin infrastructure firm BVNK. The deal is valued between $1.5 billion and $2.5 billion, but negotiations are ongoing and subject to change.
The September labour report we just saw confirmed a cooling market, with unemployment ticking up to 6.5%. This puts a Bank of Canada rate cut squarely on the table for their December meeting. We see growing conviction that the BoC will act before the US Fed does, creating a divergence in monetary policy.
This makes shorting the Canadian dollar against the US dollar an attractive play. We are looking at USD/CAD call options with a strike price above 1.4100 expiring in January 2026 to capture this expected move. The premium on these is still reasonable, offering a good risk-reward profile for the coming months.
The persistence of US tariffs is creating an undercurrent of volatility that many are ignoring. We saw this just last week with renewed rhetoric on Chinese semiconductors, causing a dip in the SOXX semiconductor ETF. Looking back at the volatility spikes during the 2018-2019 trade disputes, we see a similar pattern of uncertainty brewing.
Trading Strategies and Market Moves
We are buying long-dated put options on specific industrial ETFs that have significant international supply chain exposure. Alternatively, traders could consider buying call options on the VIX index as a broader hedge against a sudden escalation in trade friction. These positions provide a low-cost way to protect against downside risk from unexpected policy announcements.
The race between Coinbase and Mastercard for BVNK shows that institutional adoption of stablecoin infrastructure is accelerating. This isn’t just about crypto; it’s about the future of payment rails, which validates the entire digital asset ecosystem. This potential $2 billion deal comes after a period of market consolidation throughout 2024 and early 2025.
We believe implied volatility for Coinbase (COIN) stock is underpriced given the potential for a major acquisition announcement. Buying short-dated COIN call options is a direct way to speculate on a positive outcome of these talks. This move signals a floor for valuations in the crypto infrastructure space, making it a pivotal moment.
