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)