QCP Asia Colour – 27 Jun 24
- BTC continues to defend the 60k support level despite the US government transferring 3,940 BTC to Coinbase Prime after receiving approval to liquidate.
We think the 60k support will be defended because:
1. The German Government is slowing down the pace of sending BTC to exchanges, with only 250 BTC being sent yesterday. This could be a possible indication that we are approaching the tail end of their current selling regime.
2. The BTC Spot ETF finally reported net inflows of $52.4 million over the past two days after 7 consecutive days of outflows.
Trade Idea
With selling regimes appearing to start easing up and ETF inflows finally turning positive. One may argue Mt Gox release may have been largely priced in and its time to slowly start accumulating BTC.
BTC Accumulator
Buy BTC spot at 11.11% discount (54,000) every week
Expiry: 8NOV24 (20 weeks)
Strike: 54,000
Barrier: 66,000
Observation Frequency: Weekly
Spot Ref: 60,750 BTCUSD
- BTC continues to defend the 60k support level despite the US government transferring 3,940 BTC to Coinbase Prime after receiving approval to liquidate.
We think the 60k support will be defended because:
1. The German Government is slowing down the pace of sending BTC to exchanges, with only 250 BTC being sent yesterday. This could be a possible indication that we are approaching the tail end of their current selling regime.
2. The BTC Spot ETF finally reported net inflows of $52.4 million over the past two days after 7 consecutive days of outflows.
Trade Idea
With selling regimes appearing to start easing up and ETF inflows finally turning positive. One may argue Mt Gox release may have been largely priced in and its time to slowly start accumulating BTC.
BTC Accumulator
Buy BTC spot at 11.11% discount (54,000) every week
Expiry: 8NOV24 (20 weeks)
Strike: 54,000
Barrier: 66,000
Observation Frequency: Weekly
Spot Ref: 60,750 BTCUSD
❤18👍3🔥1
QCP Weekend Brief - 28 Jun 24
An onslaught of bearish headlines throughout the week has taken BTC back down to the 60k support region.
Can this level hold?
- 58-60k in BTC has been a hardy support level in Q2.
- However, this time, the market has to deal with overwhelming supply from the Mt. Gox unlocks as well as selling by government bodies.
Our view
- We think the scary supply numbers are probably overstated and that the market will grind sideways in a range.
- We could test lower towards 50k levels but the market will find strong support there, as interest from TradFi continues to permeate given the general regulatory easing across the world.
- The ETH spot ETF remains a bullish catalyst and it is likely to start trading in early July.
- Additionally, spot ETFs for other majors like SOL will also trigger some excitement.
Trade ideas
For BTC, prioritise yield generation in a sideways market for Q3 and use the returns generated to make some Q4 directional bets.
For ETH, it might be worth taking a short-term bullish punt into the ETF launch.
(Spot ref 60k BTCUSD, 3365 ETHUSD)
BTC CFCC (27-Sep 3 months)
Earn 55% pa every Friday as long as spot price is above 60k, the current spot level.
Threshold: 60k BTCUSD
Strike: 55k BTCUSD
Protection: 50k BTCUSD
At expiry, only if spot price is below 50k, the USD deployed is converted to BTC at 55k price.
ETH Zero-Cost ERKO Seagull
Max Return: 901.2% p.a. or $2,000 per ETH if spot price is just below 6k level at expiry.
Sell 3k Put to buy 4k Call with 6k knock-out
Cost: ZERO
Expiry: 26-Jul
An onslaught of bearish headlines throughout the week has taken BTC back down to the 60k support region.
Can this level hold?
- 58-60k in BTC has been a hardy support level in Q2.
- However, this time, the market has to deal with overwhelming supply from the Mt. Gox unlocks as well as selling by government bodies.
Our view
- We think the scary supply numbers are probably overstated and that the market will grind sideways in a range.
- We could test lower towards 50k levels but the market will find strong support there, as interest from TradFi continues to permeate given the general regulatory easing across the world.
- The ETH spot ETF remains a bullish catalyst and it is likely to start trading in early July.
- Additionally, spot ETFs for other majors like SOL will also trigger some excitement.
Trade ideas
For BTC, prioritise yield generation in a sideways market for Q3 and use the returns generated to make some Q4 directional bets.
For ETH, it might be worth taking a short-term bullish punt into the ETF launch.
(Spot ref 60k BTCUSD, 3365 ETHUSD)
BTC CFCC (27-Sep 3 months)
Earn 55% pa every Friday as long as spot price is above 60k, the current spot level.
Threshold: 60k BTCUSD
Strike: 55k BTCUSD
Protection: 50k BTCUSD
At expiry, only if spot price is below 50k, the USD deployed is converted to BTC at 55k price.
ETH Zero-Cost ERKO Seagull
Max Return: 901.2% p.a. or $2,000 per ETH if spot price is just below 6k level at expiry.
Sell 3k Put to buy 4k Call with 6k knock-out
Cost: ZERO
Expiry: 26-Jul
❤12👍4
QCP Asia Colour – 1 July 24
- BTC kicked off H2 by surging from the 60k region to 63.7k after last week's false break below the 60k support level.
- BTC spot ETF inflows also continue to recover with $73m of net inflows last Fri, which is the highest daily inflow in 2 weeks.
- Looking at seasonality, BTC has a median return of 9.6% in July and tends to bounce back strongly especially after a negative June (-9.85%).
- Our options desk also saw flows positioning for an upside move last Friday into the month-end, possibly in anticipation of the ETH spot ETF launch. Many signs point to a bullish July.
Trade Idea
With the false break of 60k and bullish momentum heading into a typically bullish month you can still buy BTC below 60k even if it rallies to 71k.
BTC Accumulator
Expiry: 20SEP24 (12 weeks)
Strike: 59,000
Barrier: 71,000
Observation Frequency: Weekly
Spot Ref: 63,000 BTCUSD
- BTC kicked off H2 by surging from the 60k region to 63.7k after last week's false break below the 60k support level.
- BTC spot ETF inflows also continue to recover with $73m of net inflows last Fri, which is the highest daily inflow in 2 weeks.
- Looking at seasonality, BTC has a median return of 9.6% in July and tends to bounce back strongly especially after a negative June (-9.85%).
- Our options desk also saw flows positioning for an upside move last Friday into the month-end, possibly in anticipation of the ETH spot ETF launch. Many signs point to a bullish July.
Trade Idea
With the false break of 60k and bullish momentum heading into a typically bullish month you can still buy BTC below 60k even if it rallies to 71k.
BTC Accumulator
Expiry: 20SEP24 (12 weeks)
Strike: 59,000
Barrier: 71,000
Observation Frequency: Weekly
Spot Ref: 63,000 BTCUSD
❤11👍8🤯3
QCP London and New York Colour – 2 July 24
- Market attention is currently focused on the potential approval of a spot ETH ETF. While the earliest rumored approval date is July 2nd, we believe the likelihood of approval this week is low.
- The Mt Gox release is also slated to happen this week. This overhang of up to 140,000 BTC should continue to weigh on markets, especially since the exact release schedule is unknown right now.
- BTC continues to be supported above 60k, and ETH above 3300. However, vols remain low with BTC 1-month ATM trading at the 40 vol handle. We expected the spot-forward basis to compress with the bearish price action but it has surprisingly continued to stay within the 9 - 11% range.
Trade Idea
While the core view remains that crypto continues to trade in a range, the lower vol environment along with relatively higher basis yields provides some interesting high convexity (think higher upside) plays.
The Enhanced Sharkfin is a good option to participate in a potential crypto breakout to new highs.
BTC ENHANCED SHARKFIN
Maturity: 27SEP24
Max Payout: 54% p.a.
Coupon Rate: 2% p.a. in USD
Strike: 73,000 BTC/USD
Barrier: 85,000 BTC/USD
For a deeper dive into these strategies and insights from our Chief Investment Officer, please refer to our latest quarterly commentary. To initiate a conversation, feel free to contact our sales team at sales@qcp.capital.
- Market attention is currently focused on the potential approval of a spot ETH ETF. While the earliest rumored approval date is July 2nd, we believe the likelihood of approval this week is low.
- The Mt Gox release is also slated to happen this week. This overhang of up to 140,000 BTC should continue to weigh on markets, especially since the exact release schedule is unknown right now.
- BTC continues to be supported above 60k, and ETH above 3300. However, vols remain low with BTC 1-month ATM trading at the 40 vol handle. We expected the spot-forward basis to compress with the bearish price action but it has surprisingly continued to stay within the 9 - 11% range.
Trade Idea
While the core view remains that crypto continues to trade in a range, the lower vol environment along with relatively higher basis yields provides some interesting high convexity (think higher upside) plays.
The Enhanced Sharkfin is a good option to participate in a potential crypto breakout to new highs.
BTC ENHANCED SHARKFIN
Maturity: 27SEP24
Max Payout: 54% p.a.
Coupon Rate: 2% p.a. in USD
Strike: 73,000 BTC/USD
Barrier: 85,000 BTC/USD
For a deeper dive into these strategies and insights from our Chief Investment Officer, please refer to our latest quarterly commentary. To initiate a conversation, feel free to contact our sales team at sales@qcp.capital.
❤11👍3
QCP Asia Colour - 3 July 24
- The US equity market surged to new highs following Powell's statement that the US economy is progressing along its disinflationary path.
- However, this bullish momentum has not translated to BTC and ETH, with prices hovering just above 60k & 3300 respectively.
- Despite the sell-off, the options market is still heavily skewed in favor of the topside, suggesting that the market is still anticipating a year-end rally. This aligns with the desk's observation of significant buying interest in the longer-term options at the 100/120k strike.
- Looking ahead, we anticipate a subdued Q3 for BTC as the market remains uncertain around the supply from the Mt. Gox release.
Trade idea
Generate 15% p.a. yield on your BTC while waiting for the looming Mt. Gox supply to clear up and reveal clear blue skies.
CFCC (Coin underlying)
Maturity: 27SEP24
Weekly Coupon Rate: 15% p.a. if BTC/USD fixes above 58,000
Strike: 70,000
Protection Level: 80,000
Only if spot price is above 80k at expiry, BTC will be converted to USD at 70k strike.
- The US equity market surged to new highs following Powell's statement that the US economy is progressing along its disinflationary path.
- However, this bullish momentum has not translated to BTC and ETH, with prices hovering just above 60k & 3300 respectively.
- Despite the sell-off, the options market is still heavily skewed in favor of the topside, suggesting that the market is still anticipating a year-end rally. This aligns with the desk's observation of significant buying interest in the longer-term options at the 100/120k strike.
- Looking ahead, we anticipate a subdued Q3 for BTC as the market remains uncertain around the supply from the Mt. Gox release.
Trade idea
Generate 15% p.a. yield on your BTC while waiting for the looming Mt. Gox supply to clear up and reveal clear blue skies.
CFCC (Coin underlying)
Maturity: 27SEP24
Weekly Coupon Rate: 15% p.a. if BTC/USD fixes above 58,000
Strike: 70,000
Protection Level: 80,000
Only if spot price is above 80k at expiry, BTC will be converted to USD at 70k strike.
❤18
QCP Asia Colour - 4 July 24
- Yet another day of heavy selling pressure, causing BTC to fall below the 60k support level and reaching lows of 57,875.
- BTC miners are showing signs of capitulation. Historically this has been associated with a bottom in prices with the last comparable hash rate drawdown occurring in 2022 when BTC traded to 17,000.
- Despite the sell-off in crypto, the options market is still optimistic as we continue to see interest heavily skewed towards ETH Calls for Sep and Dec expiries.
What could cause prices to break this downtrend?
1- Liquidation clusters on BTC and ETH are heavily skewed to the topside, opening up potential short squeezes.
2- With S-1 Form approvals round the corner, an approval may result in a hard bounce in ETH.
Trade Idea:
Given the recent sell pressure originating from BTC and driven by factors like Mt. Gox, miners, and government regulations, we believe ETH has the potential for a stronger rebound due to upcoming S-1 filings. An ETH KIKO helps you position for this rebound while providing downside protection.
ETH KIKOs (Knock-In, Knock-Out)
Expiry: 27SEP24
Sell 3k Put (Knock-in: 2.5k)
Buy 3.6k Call (Knock-out: 5.5k)
Cost: ZERO
Max payout: 271.96% pa or $1,900 USD per ETH if spot expires just below 5,500
Downside: At expiry, if spot is below 2,500, you buy ETH at 3,000
(Spot ref: 3,210)
- Yet another day of heavy selling pressure, causing BTC to fall below the 60k support level and reaching lows of 57,875.
- BTC miners are showing signs of capitulation. Historically this has been associated with a bottom in prices with the last comparable hash rate drawdown occurring in 2022 when BTC traded to 17,000.
- Despite the sell-off in crypto, the options market is still optimistic as we continue to see interest heavily skewed towards ETH Calls for Sep and Dec expiries.
What could cause prices to break this downtrend?
1- Liquidation clusters on BTC and ETH are heavily skewed to the topside, opening up potential short squeezes.
2- With S-1 Form approvals round the corner, an approval may result in a hard bounce in ETH.
Trade Idea:
Given the recent sell pressure originating from BTC and driven by factors like Mt. Gox, miners, and government regulations, we believe ETH has the potential for a stronger rebound due to upcoming S-1 filings. An ETH KIKO helps you position for this rebound while providing downside protection.
ETH KIKOs (Knock-In, Knock-Out)
Expiry: 27SEP24
Sell 3k Put (Knock-in: 2.5k)
Buy 3.6k Call (Knock-out: 5.5k)
Cost: ZERO
Max payout: 271.96% pa or $1,900 USD per ETH if spot expires just below 5,500
Downside: At expiry, if spot is below 2,500, you buy ETH at 3,000
(Spot ref: 3,210)
❤22❤🔥6🤯2
QCP New York Colour - 5 July 24
- Crypto prices corrected violently in Asia today with BTC and ETH trading below $54,000 and $2,900 respectively, before recovering to $55,000 and $2,950 ahead of the US open.
- Front-end vols spiked as market makers scrambled to buy gamma.
Reasons for the dip
- The market reacted to news of imminent BTC supply which included transfers by Mt. Gox and the German Government. Speculators likely oversold heavily in anticipation, triggering liquidations around $58,000 in thin markets over the US holiday.
Our view
- Spot prices have stabilised suggesting decent support around 54k. Panic has also died down with front-end vols easing significantly from 65 to below 50 for BTC and from 80 to 62 for ETH.
- Today’s US jobs data showed downward revisions for both the April and May numbers. This confirms Powell's disinflationary path and potentially earlier rate cuts with both September and December starting to price a higher probability.
Trade Idea
The desk has seen a rush from clients to deploy Accumulators today. The vol spike plus dip in spot price allows one to collect ETH below 2700 (a 9.6% discount!)
ETH Accumulator
Buy ETH spot at 9.6% discount (2,680) every week
Maturity: 27SEP24 (12 Weeks)
Strike: 2,680 (-9.62%)
Upper Barrier: 3,550 (+19.73%)
Observation Frequency: Weekly
Spot Ref: 2,960 ETHUSD
- Crypto prices corrected violently in Asia today with BTC and ETH trading below $54,000 and $2,900 respectively, before recovering to $55,000 and $2,950 ahead of the US open.
- Front-end vols spiked as market makers scrambled to buy gamma.
Reasons for the dip
- The market reacted to news of imminent BTC supply which included transfers by Mt. Gox and the German Government. Speculators likely oversold heavily in anticipation, triggering liquidations around $58,000 in thin markets over the US holiday.
Our view
- Spot prices have stabilised suggesting decent support around 54k. Panic has also died down with front-end vols easing significantly from 65 to below 50 for BTC and from 80 to 62 for ETH.
- Today’s US jobs data showed downward revisions for both the April and May numbers. This confirms Powell's disinflationary path and potentially earlier rate cuts with both September and December starting to price a higher probability.
Trade Idea
The desk has seen a rush from clients to deploy Accumulators today. The vol spike plus dip in spot price allows one to collect ETH below 2700 (a 9.6% discount!)
ETH Accumulator
Buy ETH spot at 9.6% discount (2,680) every week
Maturity: 27SEP24 (12 Weeks)
Strike: 2,680 (-9.62%)
Upper Barrier: 3,550 (+19.73%)
Observation Frequency: Weekly
Spot Ref: 2,960 ETHUSD
👍11❤6❤🔥3😘3
QCP London & New York Colour - 8 July 24
- Equities and Gold have been bouncing higher from the start of last week but crypto prices have gone the other way. What is going on?!
- We did see actual heavy spot selling early last week, particularly around 3 - 4pm New York time. Perhaps this is the large supply mentioned in the headlines (the German government and Mt Gox distributions) actually hitting the market.
- However, the gap lower in prices occurred into the 4th of July US holiday and prices only found support the next day when the US came back in to buy (more than $143m net inflow for BTC spot ETFs on Friday).
- Into the weekend, prices continued to chop violently on very thin liquidity with BTC trading in an unusually large 53.5k-58.5k range.
- Is this a new norm where crypto prices gap in larger ranges due to poor liquidity outside of US hours? Or is this just a summer phenomenon with the market missing strong narratives, getting spooked by headlines and getting shoved around by large flows?
Trade Idea (New Strategy Alert!)
If you are not sure which way the market is going , make a return both ways with Twin-Win, a zero-downside and zero-cost strategy that profits from a move in either direction.
BTC Twin-Win (27-Dec)
Max Payout: $10,000 per BTC if spot is just below 67,500 or just above 47,500 at expiry.
(Profit is earned as long as at expiry, BTC is above or below 57.5k, and remains below 67.5k or above 47.5k)
Zero-downside: USD deployed is returned in FULL at expiry.
Cost: Zero
- Equities and Gold have been bouncing higher from the start of last week but crypto prices have gone the other way. What is going on?!
- We did see actual heavy spot selling early last week, particularly around 3 - 4pm New York time. Perhaps this is the large supply mentioned in the headlines (the German government and Mt Gox distributions) actually hitting the market.
- However, the gap lower in prices occurred into the 4th of July US holiday and prices only found support the next day when the US came back in to buy (more than $143m net inflow for BTC spot ETFs on Friday).
- Into the weekend, prices continued to chop violently on very thin liquidity with BTC trading in an unusually large 53.5k-58.5k range.
- Is this a new norm where crypto prices gap in larger ranges due to poor liquidity outside of US hours? Or is this just a summer phenomenon with the market missing strong narratives, getting spooked by headlines and getting shoved around by large flows?
Trade Idea (New Strategy Alert!)
If you are not sure which way the market is going , make a return both ways with Twin-Win, a zero-downside and zero-cost strategy that profits from a move in either direction.
BTC Twin-Win (27-Dec)
Max Payout: $10,000 per BTC if spot is just below 67,500 or just above 47,500 at expiry.
(Profit is earned as long as at expiry, BTC is above or below 57.5k, and remains below 67.5k or above 47.5k)
Zero-downside: USD deployed is returned in FULL at expiry.
Cost: Zero
❤10👍3🔥1🫡1
QCP Asia Colour - 9 July 24
- BTC prices dropped to $55.2K during early US trading on Monday after the German Police moved $900 million worth of BTC to exchanges. The market was initially spooked but quickly rebounded.
- We are seeing glimmers of bullishness due to:
1. $200 million worth of BTC was later returned to the German Police from the exchanges, indicating these assets didn’t hit the market.
2. Strong demand shown by quick dip-buying, supported by $295 million ETF inflows on July 8, the highest in 21 days.
3. Despite thin liquidity, BTC and ETH have made higher lows this week, with dips bought up aggressively.
- The market is highly reactive to supply movements, suggesting speculative selling pressure rather than real spot demand. This may indicate a market over-positioning for the downside.
- A catalyst is needed. The ETH spot ETF is set to start trading around July 15. Positive reception could boost liquidity and potentially surprise the market with an upward move.
Trade Idea
Recommend deploying into OTM ERKOs, anticipating a breakout with minimal cash outlay and zero downside risk.
BTC Call ERKO (60/70K 27-SEP)
Max Payout: $10,000 per BTC (6.1x) if BTC spot price is just below 70k at expiry
Cost: $1,650 per BTC
(Spot Ref: 57,600)
ETH Call ERKO (4/5K 27-SEP)
Max Payout: $1,000 per ETH (12.5x) if ETH spot price is just below 5k at expiry
Cost: $80 per ETH
(Spot Ref: 3,090)
- BTC prices dropped to $55.2K during early US trading on Monday after the German Police moved $900 million worth of BTC to exchanges. The market was initially spooked but quickly rebounded.
- We are seeing glimmers of bullishness due to:
1. $200 million worth of BTC was later returned to the German Police from the exchanges, indicating these assets didn’t hit the market.
2. Strong demand shown by quick dip-buying, supported by $295 million ETF inflows on July 8, the highest in 21 days.
3. Despite thin liquidity, BTC and ETH have made higher lows this week, with dips bought up aggressively.
- The market is highly reactive to supply movements, suggesting speculative selling pressure rather than real spot demand. This may indicate a market over-positioning for the downside.
- A catalyst is needed. The ETH spot ETF is set to start trading around July 15. Positive reception could boost liquidity and potentially surprise the market with an upward move.
Trade Idea
Recommend deploying into OTM ERKOs, anticipating a breakout with minimal cash outlay and zero downside risk.
BTC Call ERKO (60/70K 27-SEP)
Max Payout: $10,000 per BTC (6.1x) if BTC spot price is just below 70k at expiry
Cost: $1,650 per BTC
(Spot Ref: 57,600)
ETH Call ERKO (4/5K 27-SEP)
Max Payout: $1,000 per ETH (12.5x) if ETH spot price is just below 5k at expiry
Cost: $80 per ETH
(Spot Ref: 3,090)
❤10👍8
QCP London Colour - 10 July 24
The macro backdrop has turned rosier over the past week, and we think crypto has bottomed as we were unable to break lower despite the huge selling pressure.
We maintain our bullishness due to the following tailwinds:
1. Labour numbers have come in softer the past week, and even Powell's testimony to the Senate reaffirmed that market conditions were heading towards their end goal.
2. Despite over 6000 BTC being sold by the German Police, and the Sword of Damocles being the Mt Gox release hanging over us, BTC has formed a double bottom and failed to break below 54k.
3. Softer CPI numbers tomorrow could finally cement the Fed's decision to cut in Sep and Dec.
4. The flurry of S-1 revisions for ETH spot ETFs could also signal that trading is slated to happen soon. We believe it will happen this month, especially if applicants announce fee schedules.
Trade Idea
We continue to prefer strategies that provide convex payoffs. ETH Sharkfins and OTM ERKOs continue to be attractive, especially with ETH ETFs looking to be around the corner.
Bullish BTC Sharkfin
Maturity: 27DEC24
Strike: 61,000
Knockout: 80,000
Max Payout: 66.88% p.a.
Get paid up to 66.88% p.a if BTC expires just below 80,000 at expiry.
The macro backdrop has turned rosier over the past week, and we think crypto has bottomed as we were unable to break lower despite the huge selling pressure.
We maintain our bullishness due to the following tailwinds:
1. Labour numbers have come in softer the past week, and even Powell's testimony to the Senate reaffirmed that market conditions were heading towards their end goal.
2. Despite over 6000 BTC being sold by the German Police, and the Sword of Damocles being the Mt Gox release hanging over us, BTC has formed a double bottom and failed to break below 54k.
3. Softer CPI numbers tomorrow could finally cement the Fed's decision to cut in Sep and Dec.
4. The flurry of S-1 revisions for ETH spot ETFs could also signal that trading is slated to happen soon. We believe it will happen this month, especially if applicants announce fee schedules.
Trade Idea
We continue to prefer strategies that provide convex payoffs. ETH Sharkfins and OTM ERKOs continue to be attractive, especially with ETH ETFs looking to be around the corner.
Bullish BTC Sharkfin
Maturity: 27DEC24
Strike: 61,000
Knockout: 80,000
Max Payout: 66.88% p.a.
Get paid up to 66.88% p.a if BTC expires just below 80,000 at expiry.
👍10❤2
QCP Asia Market Color - 11 Jul 24
- Tonight’s CPI release has captured everyone’s attention. The market anticipates a 70% chance of a rate cut in September. This optimism has been reflected in the continued rally in equities but has yet to be priced into the crypto market.
- BTC front-end volatility increased by 5 points this morning, with risk reversals favoring the topside, signaling the market's anticipation of potential topside volatility.
- Yesterday, the German government transferred 10k BTC to exchanges and market makers. The wallet now holds only 15k BTC out of the 50k it originally held in mid-June, suggesting a possible easing of supply pressure.
Trade Idea
With the perceived reduction in supply, a softer CPI print could serve as the catalyst to break out of this range, especially bolstered by the upcoming launch of ETH spot ETF trading next week. We identify a compelling risk-reward opportunity on the upside through Digitals.
ETH 26-Jul Call DIGI
Strike: 4k
Payout: 10x (of prems spent if spot fixes at-or-above strike at expiry)
- Tonight’s CPI release has captured everyone’s attention. The market anticipates a 70% chance of a rate cut in September. This optimism has been reflected in the continued rally in equities but has yet to be priced into the crypto market.
- BTC front-end volatility increased by 5 points this morning, with risk reversals favoring the topside, signaling the market's anticipation of potential topside volatility.
- Yesterday, the German government transferred 10k BTC to exchanges and market makers. The wallet now holds only 15k BTC out of the 50k it originally held in mid-June, suggesting a possible easing of supply pressure.
Trade Idea
With the perceived reduction in supply, a softer CPI print could serve as the catalyst to break out of this range, especially bolstered by the upcoming launch of ETH spot ETF trading next week. We identify a compelling risk-reward opportunity on the upside through Digitals.
ETH 26-Jul Call DIGI
Strike: 4k
Payout: 10x (of prems spent if spot fixes at-or-above strike at expiry)
❤10👍2
QCP Weekend Brief – 12 Jul 24
Some stability returned to the market this week with BTC and ETH making a decisive recovery to 58k and 3100.
What caused this relief rally?
1. Positive macro sentiment with inflation slowing down. The market is now pricing 95% chance for a rate cut in September.
2. The German Govt has completed their 50k BTC sale and spot price has held up well.
3. Strong demand from the spot ETFs with around $1B of net inflow this week.
What is the vol market telling us?
While crypto twitter and retail sentiment has been screaming panic, large hedge funds have been confidently and aggressively buying BTC topside, particularly December and March calls targeting 100-120k price level.
What is the best play here?
BTC accumulators are more compelling than ever with spot stabilising at these levels and steepness of the vol curve.
BTC Accumulator
Buy BTC spot at 13.5% discount (50k)
every week as long as spot is below 65k
Maturity: 27DEC24 (24 weeks)
Strike: 50,000 (-13.5%)
Upper Barrier: 65,000 (+12.5%)
Observation Frequency: Weekly
Spot ref: 57,800 BTCUSD
Some stability returned to the market this week with BTC and ETH making a decisive recovery to 58k and 3100.
What caused this relief rally?
1. Positive macro sentiment with inflation slowing down. The market is now pricing 95% chance for a rate cut in September.
2. The German Govt has completed their 50k BTC sale and spot price has held up well.
3. Strong demand from the spot ETFs with around $1B of net inflow this week.
What is the vol market telling us?
While crypto twitter and retail sentiment has been screaming panic, large hedge funds have been confidently and aggressively buying BTC topside, particularly December and March calls targeting 100-120k price level.
What is the best play here?
BTC accumulators are more compelling than ever with spot stabilising at these levels and steepness of the vol curve.
BTC Accumulator
Buy BTC spot at 13.5% discount (50k)
every week as long as spot is below 65k
Maturity: 27DEC24 (24 weeks)
Strike: 50,000 (-13.5%)
Upper Barrier: 65,000 (+12.5%)
Observation Frequency: Weekly
Spot ref: 57,800 BTCUSD
👍13❤11
QCP Market Colour – 15 Jul 24
The failed assassination attempt on Donald Trump at the beginning of the weekend triggered a rally in crypto prices. The strong upside momentum continued into the Monday Asia session, driven by aggressive programmatic buying of BTC on Coinbase from 5am to 1pm SGT (a highly unusual flow for Sunday evening in the US).
This whole move seems to be caused by the market pricing in a Trump win at the coming election (similar to Reagan after a failed assassination attempt in 1981) and this is positive for crypto prices because of his overtly pro-crypto stance.
We think that the market was already positioned for a rally with the German government having exhausted their supply and also with large hedge funds aggressively buying calls last week. Trump was the perfect trigger for a market raring to go long.
The question is whether this bullishness carries on. Will the US open see a big short squeeze? We've started to see some institutional players hedging the downside on the rally by buying near-dated puts. Perhaps the US will fade the move instead.
We maintain our medium term bullish view given the continued large demand from BTC spot ETF inflows and also the imminent ETH spot ETF launch as a catalyst.
Trade Idea:
🚨New Strategy Alert
BTC Win-Range
Earn multiples if you have a clear target price range. For example, if you think BTC will be between 75k and 85k at the end of September, profit 5x by deploying a BTC 75/85k Sep Win-Range.
Payout: 5x
Maturity: 27-Sep
Range: 75k / 85k
The failed assassination attempt on Donald Trump at the beginning of the weekend triggered a rally in crypto prices. The strong upside momentum continued into the Monday Asia session, driven by aggressive programmatic buying of BTC on Coinbase from 5am to 1pm SGT (a highly unusual flow for Sunday evening in the US).
This whole move seems to be caused by the market pricing in a Trump win at the coming election (similar to Reagan after a failed assassination attempt in 1981) and this is positive for crypto prices because of his overtly pro-crypto stance.
We think that the market was already positioned for a rally with the German government having exhausted their supply and also with large hedge funds aggressively buying calls last week. Trump was the perfect trigger for a market raring to go long.
The question is whether this bullishness carries on. Will the US open see a big short squeeze? We've started to see some institutional players hedging the downside on the rally by buying near-dated puts. Perhaps the US will fade the move instead.
We maintain our medium term bullish view given the continued large demand from BTC spot ETF inflows and also the imminent ETH spot ETF launch as a catalyst.
Trade Idea:
🚨New Strategy Alert
BTC Win-Range
Earn multiples if you have a clear target price range. For example, if you think BTC will be between 75k and 85k at the end of September, profit 5x by deploying a BTC 75/85k Sep Win-Range.
Payout: 5x
Maturity: 27-Sep
Range: 75k / 85k
❤15🔥2
ETH spot ETF Update:
SEC request for ‘FINAL S-1s’ to be submitted and requested ‘effectiveness on Monday after close for a TUESDAY 7/23 LAUNCH’
Trade Idea
ETH ETF Win-Range
Get paid 5x returns if ETH fixes between the range
Maturity: 26-Jul
Range: 3900 to 4100
Payout: 5x
(Spot Ref: 3490 ETHUSD)
SEC request for ‘FINAL S-1s’ to be submitted and requested ‘effectiveness on Monday after close for a TUESDAY 7/23 LAUNCH’
Trade Idea
ETH ETF Win-Range
Get paid 5x returns if ETH fixes between the range
Maturity: 26-Jul
Range: 3900 to 4100
Payout: 5x
(Spot Ref: 3490 ETHUSD)
🍾14❤8
QCP Macro Colour - 17 July 24
The past 2 weeks saw market participants panicking as BTC traded lower to 54k and alts got flushed 30%. As blood flowed on the streets, we continued to hold on to our medium term bullish view.
We weren't wearing rose-tinted glasses when we said the macro picture was turning rosier. Powell, in his recent communications and interviews, mentioned that a lot of progress has been made in curbing inflation. Markets are now pricing in a 100% chance of a rate cut in Sep!
The flows from the German police have concluded, and despite the impending distribution of BTC from Mt Gox, markets found a strong bid to bring BTC over 65k.
The ETH spot ETF looks like a done deal with the SEC asking for final revisions to S-1 filings and fee schedules. Analysts predict trading will begin on 23rd Jul.
Lastly, Trump picking J.D. Vance as his Vice President provides another positive catalyst. Vance holds BTC, and we expect him to lobby for crypto friendly regulations if Trump gets elected.
Trade Idea
We continue to like trades with topside convexity as mentioned in our previous broadcasts. With the forward basis also moving higher (10-12% ann.yield), the payoffs are much more attractive.
ETH ENHANCED SHARKFIN
Spot Ref: 3,500 ETHUSD
Maturity: 27DEC24
Base Coupon: 2% p.a.
Max Payout: 76.64%
Strike: 3,750 ETH/USD
Barrier: 5,000 ETH/USD
Get paid up to 76.64% p.a. if ETH expires just below 5,000 at expiry. Even if ETH expires below 3,750 or above 5,000, you still get paid a 2% p.a. coupon.
The past 2 weeks saw market participants panicking as BTC traded lower to 54k and alts got flushed 30%. As blood flowed on the streets, we continued to hold on to our medium term bullish view.
We weren't wearing rose-tinted glasses when we said the macro picture was turning rosier. Powell, in his recent communications and interviews, mentioned that a lot of progress has been made in curbing inflation. Markets are now pricing in a 100% chance of a rate cut in Sep!
The flows from the German police have concluded, and despite the impending distribution of BTC from Mt Gox, markets found a strong bid to bring BTC over 65k.
The ETH spot ETF looks like a done deal with the SEC asking for final revisions to S-1 filings and fee schedules. Analysts predict trading will begin on 23rd Jul.
Lastly, Trump picking J.D. Vance as his Vice President provides another positive catalyst. Vance holds BTC, and we expect him to lobby for crypto friendly regulations if Trump gets elected.
Trade Idea
We continue to like trades with topside convexity as mentioned in our previous broadcasts. With the forward basis also moving higher (10-12% ann.yield), the payoffs are much more attractive.
ETH ENHANCED SHARKFIN
Spot Ref: 3,500 ETHUSD
Maturity: 27DEC24
Base Coupon: 2% p.a.
Max Payout: 76.64%
Strike: 3,750 ETH/USD
Barrier: 5,000 ETH/USD
Get paid up to 76.64% p.a. if ETH expires just below 5,000 at expiry. Even if ETH expires below 3,750 or above 5,000, you still get paid a 2% p.a. coupon.
❤16
ETH price by 26-Jul (ETH spot ETF)
Anonymous Poll
57%
Bullish 🚀 (3800-4100)
19%
Bearish 🤮 (3150-2900)
24%
Non-event 🤔
❤7
Trade Idea
ETH 26-Jul Win Range
Receive 5x payout if ETH expires within the range on 26-Jul
1) Bullish
Range: 3800 to 4100
2) Bearish
Range 3150 to 2900
Payout: 5x
(Spot Ref: 3480 ETHUSD)
ETH 26-Jul Win Range
Receive 5x payout if ETH expires within the range on 26-Jul
1) Bullish
Range: 3800 to 4100
2) Bearish
Range 3150 to 2900
Payout: 5x
(Spot Ref: 3480 ETHUSD)
❤10👍2
QCP Asia Market Color - 19 Jul 24
- Price action this week has been rather resilient especially against the backdrop of continued Mt. Gox supply and tanking equities. Could this be a sign that the market has shaken off most of its worries?
- Perp funding is back to flat, vols are drifting lower and BTC is back in the familiar range of 61k to 71k where it traded within for the entire of Q2 this year.
- While spot could range here in the near term, especially with dealers very long the 26-Jul 67k Strike, the market is definitely betting big on a breakout heading into the US elections.
- Even with lower spot overnight, we continued to see sizeable institutional interest in Dec 100k Calls. This signals an even stronger conviction of a year-end rally as the odds of a Trump victory increases.
Trade Idea:
With BTC comfortably in the middle of the 61k - 71k range, similar to Q2, a short-term Principal Protected Range Accrual could be an optimal strategy before the potential big breakout later in the year.
Principal Protected Range Accrual (USD Principal)
Receive weekly 27% p.a. coupon if BTC is trading between 61k and 71k during observation
Maturity: 11-Oct (12 weeks)
Coupon Rate: 27% p.a. in USD if BTC/USD fixes at-or-within Coupon Range, 0% pa otherwise
Coupon Range: 61k to 71k
Coupon Frequency: Weekly from 26-Jul
(BTC spot ref: 63,500)
- Price action this week has been rather resilient especially against the backdrop of continued Mt. Gox supply and tanking equities. Could this be a sign that the market has shaken off most of its worries?
- Perp funding is back to flat, vols are drifting lower and BTC is back in the familiar range of 61k to 71k where it traded within for the entire of Q2 this year.
- While spot could range here in the near term, especially with dealers very long the 26-Jul 67k Strike, the market is definitely betting big on a breakout heading into the US elections.
- Even with lower spot overnight, we continued to see sizeable institutional interest in Dec 100k Calls. This signals an even stronger conviction of a year-end rally as the odds of a Trump victory increases.
Trade Idea:
With BTC comfortably in the middle of the 61k - 71k range, similar to Q2, a short-term Principal Protected Range Accrual could be an optimal strategy before the potential big breakout later in the year.
Principal Protected Range Accrual (USD Principal)
Receive weekly 27% p.a. coupon if BTC is trading between 61k and 71k during observation
Maturity: 11-Oct (12 weeks)
Coupon Rate: 27% p.a. in USD if BTC/USD fixes at-or-within Coupon Range, 0% pa otherwise
Coupon Range: 61k to 71k
Coupon Frequency: Weekly from 26-Jul
(BTC spot ref: 63,500)
❤14🔥3👍2
QCP Asia Market Color - 22 Jul 24
US election continues to drive volatility in risk assets, starting with Trump’s assassination attempt and his remarks that Taiwan should pay the US for its protection, which spooked semiconductor equities.
A major development last night saw Biden step down from the race and endorse Kamala Harris. This caused erratic crypto movements, with BTC gapping down over 1000 points before grinding back up to $68K today.
Election headlines will keep driving market volatility, especially for crypto, with all eyes on Trump’s upcoming appearance at the Nashville Bitcoin conference this weekend.
What is the options market whispering?
Options market volatility has surged due to these uncertainties. Prices for out-of-the-money options have increased significantly in the past 24 hours, indicating expectations for more extreme market movements.
Trade Idea:
With a clearer picture of the US election and a higher likelihood of a second rate cut by year-end, we continue to favor trades with topside convexity.
BTC Win-Range
Get paid 5x returns if BTC fixes within the range.
Maturity: 27-Dec
Range: 90000 to 110000
Payout: 5x
US election continues to drive volatility in risk assets, starting with Trump’s assassination attempt and his remarks that Taiwan should pay the US for its protection, which spooked semiconductor equities.
A major development last night saw Biden step down from the race and endorse Kamala Harris. This caused erratic crypto movements, with BTC gapping down over 1000 points before grinding back up to $68K today.
Election headlines will keep driving market volatility, especially for crypto, with all eyes on Trump’s upcoming appearance at the Nashville Bitcoin conference this weekend.
What is the options market whispering?
Options market volatility has surged due to these uncertainties. Prices for out-of-the-money options have increased significantly in the past 24 hours, indicating expectations for more extreme market movements.
Trade Idea:
With a clearer picture of the US election and a higher likelihood of a second rate cut by year-end, we continue to favor trades with topside convexity.
BTC Win-Range
Get paid 5x returns if BTC fixes within the range.
Maturity: 27-Dec
Range: 90000 to 110000
Payout: 5x
❤20
QCP Broadcast
QCP Asia Market Color - 22 Jul 24 US election continues to drive volatility in risk assets, starting with Trump’s assassination attempt and his remarks that Taiwan should pay the US for its protection, which spooked semiconductor equities. A major development…
Additional Trade Idea:
If you are bullish BTC into Trump's speech this weekend at Nashville.
BTC Win-Range (2 August expiry) pays 4x if BTC price is between 72k and 77k at expiry.
(spot ref: 67k)
If you are bullish BTC into Trump's speech this weekend at Nashville.
BTC Win-Range (2 August expiry) pays 4x if BTC price is between 72k and 77k at expiry.
(spot ref: 67k)
🔥13❤5
SEC officially approves spot ETH ETF for trading tomorrow (23-July)
The lack of positive reaction is a negative reaction. Market seems to be seeing who folds first to ‘sell the news’
Trade Idea
When life gives you lemons, make 4x returns with our Win Range
Expiry: 26-July
Range: 3250 to 3100
Payout: 4x (of premiums spent if ETH fixes within the range on friday)
The lack of positive reaction is a negative reaction. Market seems to be seeing who folds first to ‘sell the news’
Trade Idea
When life gives you lemons, make 4x returns with our Win Range
Expiry: 26-July
Range: 3250 to 3100
Payout: 4x (of premiums spent if ETH fixes within the range on friday)
🍾16❤7🔥1