Crypto Weekly: 3/25/2021
Bitcoin has rebounded to new highs and pulled back again since our last market update on Bitcoin two weeks ago. We may sound like a broken record, but we remain bullish on Bitcoin and crypto and see further upside during the balance of the year.
A few reasons we see for the recent pull back:
-Traders repositioning ahead of $6B largest ever Bitcoin options expiration tomorrow
-Traditional institutions new to crypto may be selling to locking in quarter end returns
-Retail tax selling pressure to cover big gains from 2020 with April 15 around the corner
-GBTC NAV premium arbitrage traders selling BTC and buying GBTC shares
A few reasons we’re remaining bullish:
-The retracement offers a healthy de-risking for the market
-Macro balances favorable across equities, rates, inflation, dollar
-Institutional capital still entering crypto space (Morgan Stanley, etc.)
-Returns after prior Bitcoin options expiration dates have tended to be positive
-Market calm based on Bitcoin VIX falling with room to fall further
Source: Tradingview (Date: 3/25/2021)
Bitcoin options are becoming a bigger and bigger part of the crypto market, with the aggregate open interest now pushing close to $15B.
Source: The Block (Date: 3/23/2021)
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