Bitcoin surges past $35,000 on rising optimism for SEC approval of Spot BTC ETF ??; ChatGPT can now predict the direction of interest rates ??

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1. Enhanced Investors’ Rights Agreement ?? [draft contracts while comparing terms against market benchmarks ??]
2. Simple Leveraged Buyout (LBO) Model for Investors ?? [use this to make informed decisions and maximize your returns ??]
3. Worldline falls more than 50% on guidance cut. Is FinTech Growth Story over or Xmas came early? ?? [a deep dive]
4. Elon Musk wants X to replace your bank account within a year ??
5. Everyone’s dream: FinTechs being PAID to acquire customers ??
6. Monzo in talks to raise ￡300M in a funding round valuing it above ￡3.5B ?? [what does this tell us + some deeper dives into Monzo & its brilliant growth strategies]

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Last week (23-27 October) was another intense week in the world of Blockchain and Cryptocurrency. We’re looking at Bitcoin surging past $35,000 (optimism for SEC approval of Spot BTC ETF is rising + what’s next); ChatGPT that can now predict the direction of interest rates (what this means + more reads on AI + Finance), and other interesting news and developments.

Without further ado, let us dive into what happened in the Blockchain & Crypto sector last week. Let’s connect the dots.

Bitcoin surges past $35,000 on rising optimism for SEC approval of Spot BTC ETF ??

The news ??? Bitcoin prices briefly jumped over the $35,000 mark this week for the first time since last May, fueled by growing speculation that the SEC may soon approve the listing of a spot bitcoin exchange-traded fund (ETF).

It has dropped a bit since then and at the point of writing, BTC is changing hands at circa $33k per coin.

Nevertheless, the cryptocurrency has now erased all the losses it incurred after the collapse of Terra's stablecoin in May 2022.

Let’s take a look.

More on this ?? Driving bitcoin's double-digit percentage gains is a shift in sentiment that SEC approval of a spot bitcoin ETF is imminent. The SEC has long resisted approving such funds, which hold actual bitcoins, arguing it cannot protect investors from potential manipulation.

However, the agency is facing mounting pressure after a court ruled it was wrong to reject an application to convert Grayscale Investments ' Bitcoin Trust into an ETF.

Major financial institutions like BlackRock, ARK Investment Management LLC , and Fidelity have been lobbying hard for bitcoin ETFs, portraying them as safer than buying crypto directly.

Having said that, BlackRock 's filing of a spot Bitcoin ETF on the Nasdaq's trade clearing firm this week and its move to assign a ticker symbol is seen as strong signals SEC approval may come very soon.

The prospect of Bitcoin ETFs has thus sparked a wave of optimism across the crypto sector. Ether, XRP, and other major cryptocurrencies also rallied on the news.

Crypto-linked equities like Coinbase and 微策略 gained 10% or more.

?? THE TAKEAWAY

What’s next? ?? SEC blessing would represent a major regulatory stamp of approval for Bitcoin. It could unleash enormous institutional demand and be a catalyst for the next stage of growth and maturity for the cryptocurrency market. Some speculate that the impact could be similar to that when Gold ETF was introduced:

However, challenges remain such as ongoing legal troubles at major crypto firms and uncertainty around regulations. The path forward is unlikely to be smooth. Yet, the industry appears re-energized to confront these issues head-on.

ICYMI: The cryptocurrency bull market is already here ?? [a recap of what’s happening + where to look at & some more bonus reads]

ChatGPT can now predict the direction of interest rates ??

The news ??? New research demonstrates how large language models like ChatGPT can forecast interest rate decisions by parsing the carefully coded communications of central bankers.

Let’s take a look.

More on this ?? In a new study, economists at Sheffield Hallam University in the UK fed transcripts of Bank of England Monetary Policy Committee speeches into ChatGPT. The AI then classified each address as dovish, neutral, or hawkish based on tone and wording. This sentiment analysis proved statistically significant in predicting how members would vote at upcoming meetings.

Those who gave more neutral speeches tended to favor interest rate hikes compared to the more dovish or hawkish speakers. So while the content might appear innocuous to the layperson, ChatGPT was able to decode the subtle semantics of central banking.

Lead researcher Dr. Drew Woodhouse says this highlights the potential of AI for processing nuanced human beliefs and expectations. The technology grasped the intricacies of central bank communications and related speech patterns to eventual policy actions.

The impact ?? The findings have major implications for forecasting decisions and modeling economic expectations going forward. The Sheffield team suggests this approach could be extended to study other aspects of central bank messaging like forward guidance.

It also illustrates how publicly available AI like ChatGPT can empower financial analysis and decision-making. Banks and investors stand to gain an edge by leveraging natural language processing to parse the coded communications of policymakers.

In fact, J.P. 摩根 has already built a similar ChatGPT-based model to analyze statements by the Federal Reserve (see below). The bank says early applications are encouraging, with the tool now expanded to cover other major central banks as well.

?? THE TAKEAWAY

Looking ahead ?? As AI grows more sophisticated at decoding human language, institutions will race to take advantage across the financial sector. Fund managers could automate sentiment tracking of corporate executives to anticipate business outlooks. Regulators may also apply speech analysis to detect early warnings of excessive risk-taking. And economists can generate more accurate forecasts by feeding the latest rhetorical trends into predictive models. But risks exist around over-reliance on AI for divining meaning from speech patterns. The technology may miss nuances or mistakenly infer causality from spurious correlations in language data. Careful human oversight is still essential. The research nonetheless indicates central banks may need to further refine their communications as AI permeates markets. Delivering forward guidance could become an arms race of coded semantics. For now, it appears models like ChatGPT have cracked the cryptic lexicon of monetary policymakers. Tech-savvy investors are already parsing the latest speeches for any slight change in tone or terminology that could signal shifts in the interest rate outlook.

ICYMI:

Bonus: The insurance sector is more and more exploring the benefits of AI ??

Generative AI will completely transform FinTech and Banking over the next 3 years ????

JPMorgan is developing a ChatGPT-like AI service for investors ?? [+6 more reads]

Extra Reads & Quick Bites for Curious Minds ??

• Unions vs. Klarna ?? BNPL giant Klarna is facing a possible strike by employees at its Swedish headquarters next month. The Unionen and Swedish Engineering unions say that their members will strike on 7 November if they do not secure a collective agreement. Unionen says that work to reach a collective agreement - which would affect employment, working hours, vacations, and job security - has been ongoing for several years, with negotiations taking place since March.
• Piloting stablecoins & CBDCs ?? Deutsche Bank and Standard Chartered have carried out the first digital currency transfer and swap on the new Universal Digital Payments Network (UDPN). Unveiled earlier this year, the UDPN is a DLT-underpinned messaging backbone that promises to provide interoperability between stablecoins and CBDCs to enable connectivity between any business IT system and regulated digital currencies. The network - set up by GFT Group and Red Date Technology - describes itself as a "gateway for businesses and financial institutions to use regulated digital currencies in cross-border transactions". In this respect, it could be seen as a competitor to bank-to-bank messaging network Swift, which has been conducting its own research into blockchain interoperability. In the first proof-of-concept for the network, Deutsche and Standard Chartered's SC Ventures executed a real-time on-chain transfer and swap test transactions between USDC and EURS stablecoins on the infrastructure.

Money Moves ??

• Finland-based e-invoicing company Basware has announced the completion of its acquisition of cloud-based finance solutions provider Glantus.
• Singapore-based digital currency payment institution Triple-A has raised $10M in a Series A funding round led by Peak XV Partners.
• US-based payments processor Shift4 has completed the acquisition of Finaro?to accelerate its European expansion and improve its e-commerce capabilities.?ICYMI: Another FinTech M&A: Shift4 acquires SpotOn unit for $100M ?? [+more reads & M&A resrouces]

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P.S. You might enjoy my earlier pieces as well:

?? Top 10 FinTech predictions for 2023 ??

?? Top banking trends to watch in 2023 ??

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About: I am a business developer, sales professional, FinTech strategist, as well as Cryptocurrency and Blockchain enthusiast. I'm highly passionate about Financial Technology and Digital Innovation, and strongly believe that it will change the world for the better. Apart from my daily job at a global payments startup where I'm leading the company's expansion into Europe, I'm an active member of the FinTech community and a TechFin evangelist.

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