Research Summary
The report discusses the recent developments in the cryptocurrency market, focusing on Bitcoin and Ethereum. It highlights the growing institutional interest in cryptocurrencies, with BlackRock’s ETF application and the launch of the professional-grade EDX exchange serving as significant catalysts. The report also mentions the recent purchase of an additional 12.3k BTC by MicroStrategy and Fidelity Investments’ pursuit of launching a Bitcoin ETF. These events have fueled optimism around Bitcoin and the broader crypto market. The report also discusses the volatility in Bitcoin and Ethereum, and the potential impact of the US NFP report on the market.
Actionable Insights
- Increased Institutional Engagement: The anticipation of more institutional engagement is driving the cryptocurrency market. This is evident from the recent inflow of $334m into crypto products, led by Bitcoin.
- Bitcoin’s Negative 30-day Rolling Correlation with U.S. Indices: This suggests that U.S. traders are investing in Bitcoin for distinct reasons, the main one being they foresee increased institutional adoption due to diversification perks.
- ETH Implied Vols Outperform As Realized Improves: Ethereum’s volatility is somewhat higher as it has seen more movement since Friday’s expiry, marking a notable improvement in realized volatility for the first time in a while.
- Strategy Compass: Owning outright calls in ETH looks like a decent risk/reward as it still has plenty of room to catch up to BTC performance and there is less gamma overhang now.
