Hitting the Debt Ceiling and the Buy Button
Back to Life
If you were 100% deployed on January 1st and decided to lock in your returns for the year, frankly, we wouldn’t blame you, especially not after the carnage witnessed last year. However, as we discussed last week, we view this current rally as a sign of more opportunities to come and are excited to help our clients navigate the crypto market in 2023.
The choppy, directionless crypto market sprung to life just a couple of weeks ago, with spot volumes ticking noticeably higher. Given the prevailing liquidity conditions, it did not take an enormous amount of spot volume to inject some volatility into the market.
Below we see a parabolic rise in perpetual futures volume starting a couple of weeks ago. While we are yet to see the same volumes witnessed in 2021, this spike in activity is a welcome sight for crypto investors.
FOMO in the Options Market
The 25-delta skew is a metric that compares the relative value of put options and call options in the market. It is determined by comparing the implied volatility of 25-delta put options to the implied volatility of 25-delta call options, which is then normalized by the at-the-money implied volatility.
This metric helps to understand the m...Reports you may have missed
TURNING CAUTIOUSLY OPTIMISTIC There is a lot of pain in the ETHBTC chart. It peaked in December 2021 and, save for several brief rallies, has been on a downwards slope ever since. It peaked at just under 0.09 and currently trades around 0.038. Source: TradingView Fortunately, we have anchored most of our attention on BTC and SOL this cycle, as BTC has continued to lead the market in a generally...
BTC DECOUPLING FROM EQUITIES Over the past two weeks, BTC has begun to decouple from other risk assets. While the broader macro environment experienced choppy conditions from November 12th through yesterday, BTC has appeared indifferent to fluctuations in risk appetite, continuing its upward momentum and approaching the $100K milestone. A chart of BTC correlations highlights this decoupling, with sharp declines in its correlation to the QQQ, SPX, and IWM. The...
Market Lacks Convincing Signs of Market Froth, Major Demand Side Catalyst for CORE (Core Strategy Rebalance)
FROTH OR REPRICING? A heated debate is unfolding among crypto investors: have we just hit a local top, or will the breakout after eight months of consolidation continue higher through year-end? The crypto market has surged rapidly, as we anticipated, but the key question remains—can this rally sustain itself, or is it nearing exhaustion? Anecdotally, we are seeing renewed interest in crypto from casual observers. Friends and family are once...
TRUMP MAINTAINS A SLIGHT EDGE, BUT IT’S ESSENTIALLY A TOSSUP Well, it's here, folks – the moment that markets have been building up towards since January—the general election to decide the next President of the United States. As our clients know, we have been closely tracking polling and prediction market trends over the past several months, and these have served as a key input in our recommendations. Odds for both...
