Research Summary
The report discusses the recent trends in the cryptocurrency market, focusing on Bitcoin (BTC) and Ethereum (ETH). The report highlights the volatility in the cryptocurrency market, with BTC’s price instability causing concerns for investors. Despite positive news and rising institutional adoption, BTC’s price hasn’t significantly improved. The report also mentions the potential for growth in the broader crypto market, excluding BTC and ETH, as long as the path towards more certain regulation clears up. The report further discusses the decrease in volatility in cryptocurrency, the shift in the BTC term structure, and the decrease in the volatility spread between ETH and BTC.
Actionable Insights
- Bitcoin’s price instability: Despite positive news and rising institutional adoption, BTC’s price hasn’t significantly improved. This could be a potential area of concern for investors.
- Broader crypto market growth: The broader crypto market, excluding BTC and ETH, shows potential for growth as long as the path towards more certain regulation clears up. This could be a potential area for investment.
- Decrease in volatility: Both Bitcoin (BTC) and Ethereum (ETH) have recorded a 10-day realised volatility of approximately 25%, nudging quite close to historical lows. This could indicate a more stable market.
- Shift in BTC term structure: The Bitcoin (BTC) term structure is shifting downwards, becoming slightly steeper in contango, primarily at the front end. This is driven by the low realized volatility pushing down the front of the curve.
- Decrease in volatility spread between ETH and BTC: The volatility spread between Ethereum (ETH) and Bitcoin (BTC) is decreasing, dipping below zero, as the ETH/BTC spot loses steam and Ethereum’s volatility faces pressure. This could indicate a shift in market sentiment.
