QCP Asia Colour - 2 Oct 24

The Israeli-Iranian conflict has intensified. Earlier this week, Israel launched a ground offensive in Lebanon and Iran responded by launching over 180 missiles yesterday. However, the risk off move in TradFi assets was minimal. The S&P closed 1% lower, WTI closed 2% higher, and we're seeing minimal follow through in price action today.

Crypto, however, was hit much harder with BTC closing 4% lower. We seem to have found some support at the 60k level, but further escalation could push us much lower, possibly to the 55k level.

Middle East geopolitics will steal the limelight for now, but the shallow sell-off suggests that the market remains well bid for risk assets. This minor setback shouldn't distract from the bigger picture.

Policy actions and the economic situation in China are reminiscent of Japan in the 1990s. To combat deflation in Japan, the BoJ cut rates, introduced Negative Interest Rates and started the then novel Quantitative Easing Program. The flush of liquidity from the PBoC and potential fiscal support will likely support asset prices in China, with bullish sentiment potentially spilling over globally to support risk assets, including crypto.

In his recent Q&A, Powell was supportive of further rate cuts in 2024. Assets prices are expected to remain supported heading into 2025, as both the largest (the Fed) and 3rd largest (PBoC) central banks in the world have started their cutting cycles in earnest.

Trade Idea
BTC Win-Range (Top Side)
Get paid 9x if BTC fixes anywhere within the range.
Payout: 9x
Maturity: 27DEC24
Range: 90k to 110k
(spot ref: 61,700)

QCP Asia Colour - 3 Oct 24

Markets remain tense as the world awaits Israel's response to Iran's missile strike on Tuesday. Crypto saw another selloff, with Bitcoin (BTC) dropping to $59,972 and Ethereum (ETH) falling below $2,400. BTC's lower-low and lower-high suggest a short-term bearish outlook.

We believe this weakness is temporary, given the strong correlation between crypto and U.S. stocks. As U.S. equities recover, crypto is likely to follow. This correlation highlights that macroeconomic factors are currently the main drivers of risk asset prices.

With the ADP payroll report beating expectations, tomorrow's non-farm payroll report will be key in confirming a strong U.S. labor market. A combination of expected rate cuts and labor strength could boost risk assets.

Trade Idea

Despite Middle Eastern tensions impacting Bitcoin during its historically strong month, we see this dip as temporary and expect the "Uptober" rally to prevail. We favor a Principal Protected Sharkfin strategy to capitalize on the expected bullish momentum.

BTC PRINCIPAL PROTECTED SHARKFIN
Maturity: 27DEC24
Strike: 75,000
Barrier: 88,000
Cost: Zero
Max Payout: 74.43% p.a. if spot expires just below 88,000 BTCUSD
(spot ref: 60,200)

QCP Weekend Summary – 05 October 24

- The new quarter kickstarted with some volatility in risk assets due to the escalation of the Israeli-Iranian conflict. Given the timing (one-year anniversary since the outbreak of the Gaza war) and scale of Iran’s attack, market is expecting Israel’s retaliation to be more critical as they target key infrastructures such as Iran’s nuclear or oil facilities.

- Friday’s non-farm payrolls printed 254,000, smashing expectations at 150,000. US unemployment rate came in at 4.1% (est. 4.2%). The strong data reflects a robust labour market despite last month’s dismal print.

- A resilient labour market coupled with the possibility of additional rate cuts later this year have boosted risk assets, with BTC briefly reclaiming $62,000.

- Options market activity continues to grow as as we enter Q4 with demand for December calls still building up, highlighting market’s bullish view towards the end of the year.

- With BTC down approximately 5% from last week's highs, we believe the recent positive macro data supports our view of the long-awaited "Uptober" trend.

Trade Idea
With Geopolitical risk being the biggest concern now till US elections, we favour locking in yields at the these spot levels to allow the dust to settle and position for a rally into the year end.

BTC CFCC
Receive weekly 37% p.a. coupons as long as BTC price is above 58,500
Maturity: 27DEC24
Coupon Rate: 37% p.a.
Coupon Level: Above 58,500
Strike: 55,000
Protection Level: 50,000
At expiry, if BTC is below 50,000, the USD deployed will be converted to BTC at 55,000
(Spot ref: 62,250)

QCP Asia Colour - 7 Oct 24

- After a shaky start, Uptober seems to be back on track. BTC is as at similar levels to where it started last Monday.

- The Uptober narrative coupled with strong NFP numbers has helped BTC find strong support around 60k. The upcoming HBO Bitcoin documentary has also brought more mainstream attention to crypto as memecoins themed after Len Sasssaman are also starting to gain traction.

- Despite the rough start last week, options flows are still pointing to a bullish Q4 as we continue to see buyers of Dec 75k/95k CSpds. With additional rate cuts lined up and BTC's strong correlation to equities, we still remain optimistic of a strong October.

- That being said, all eyes are on US CPI this Thursday. With the recent strong US wage and jobs numbers, the market will be paying close attention to this print for any signs of an uptick in inflation. Fed rate cut expectations have shifted from 50 bps to 25 bps in just a week and this week's data may determine if further cuts get priced out.

Trade Idea
Throughout last week we still saw significant buyers of BTC Dec CSpds. Instead of spending premiums on Call Spreads, you can gain similar topside exposure with a zero cost Principal Protected Sharkfin.

BTC PRINCIPAL PROTECTED SHARKFIN
Maturity: 27DEC24
Strike: 75,000
Barrier: 90,000
Cost: Zero
Max Payout: 90% p.a. if spot expires just below 90k.
(spot ref: 63,500)

QCP Asia Colour - 8 Oct 24

- The rally in Chinese stocks fizzled following their week-long holiday as a government briefing failed to introduce new economic stimulus. The MSCI APAC equity index recorded its largest decline in a month.

- US equities also declined overnight, driven by megacap tech stocks and rising geopolitical tensions, with the VIX rising to 22 points. Interestingly, crypto volatility remained stable, with front-end implied vols trading at 43%, a 3-vol discount to 7-day historical realized volatility.

- Bloomberg previously reported that Chinese investors may have sold USDT to fund stock purchases since the end of September, while BTC stayed flat.

- As the Chinese rally wanes, we anticipate capital reallocation back into crypto, reflecting the industry’s growing maturity as an alternative risk-on asset.

Trade Idea

We foresee near-term downside risk for equities due to upcoming earnings season and CPI release, which may challenge their lofty valuations. Geopolitical tensions further complicate the outlook.

However, we maintain a medium-term optimistic stance, expecting election headlines to continue driving crypto movement. This was evidenced by Elon Musk’s remark on Polymarket, where Trump was predicted to lead Harris with greater accuracy than traditional polls - an event that coincided with BTC's upward movement during the US open last night.

Bearish ERKO Put (25-Oct)
Strike: 60,000
Knock-out: 55,000
Cost: 1,090 USD per
Max payout: 4.59x if fixes just above 55,000 at expiry

Bullish ERKO Call (29-Nov)
Strike: 65,000
Knock-out: 75,000
Cost: 1,630 USD per
Max payout: 6.13x if fixes just below 75,000 at expiry

Spot Ref: 62,260

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Read our full release here: https://www.qcpgroup.com/insights/press-release-qcp-integrates-usyc-hashnote-as-collateral-for-digital-asset-strategies/

QCP Asia Colour - 9 Oct 24

Chinese stocks continue to move lower today after yesterday's disappointing press conference from state planners. The China A50 Index is down another 7% today and down 17% from the recent highs. The lack of a fiscal stimulus is weighing heavily on investor sentiment.

US equities however, remain unaffected by developments in Asia. US equities continue to push for new highs despite US election uncertainty and pricing out cuts in 2024 following the NFP report. Bond markets are now pricing in 2 cuts in 2024, down from 3 cuts just a week ago.

The consistent grind higher in US equities despite growing headwinds from the Middle East and domestic challenges related to the US elections, reaffirms our view that risk assets are poised to rally.

In the crypto market, we've seen the meme coin market surge with increased trading activity both on-chain and off-chain. There is some froth in the market as traders capitalize and leverage heavily on the latest hippo or cat narrative.

Perp funding across Deribit and Binance have increased in the past 2 weeks also, a sign that bearish bets are decreasing or longs are building. This, combined with the froth in memecoins makes us wary of moves to the downside, as these often happen when markets are bullish and least expect it.

Trade Idea
We look to continue accumulating even in the face of short-term uncertainty and dips, given the bullish medium-term outlook.

We prefer Accumulators as they allow us to keep buying at discounts, and risk-off selloffs from US election uncertainty should be short-lived.

ACCUMULATOR
Expiry: 29NOV24
Settlement Frequency: Weekly from 11OCT24
Strike: 58,800
Barrier: 70,000
Spot ref: 62,100

QCP Asia Colour - 10 Oct 24

• Yesterday’s Fed meeting minutes revealed a less dovish tone, bringing the Fed’s implied victory over inflation under question. Combined with last Friday’s strong payroll data, market has increased their bets of a 25bps rate cut in November to 83.7% chance from 67.9% last week.

• Tonight’s CPI and tomorrow’s PPI data will be key risk events for this week. Alongside major banks earnings report (JPM/WFC), they will be crucial for assessing the strength of the US economy amidst cooling inflation.

• While US equities indices rallied last night with the S&P 500 notching a new high, the same level of optimism was not seen in crypto as selling pressures reignited, possibly due to news of more Silk Road BTC selling and PlusToken ETH selling. We remain hopeful of an Uptober rally as long as the 60,000 key support level remains intact.

Trade Idea
With markets expecting more rate cuts ahead, we favour locking in yields at these depressed spot levels and position for a year-end rally.

FIXED COUPON CONVERTIBLE (FCC)
Maturity: 27DEC24
Coupon Frequency: Weekly from 18OCT24
Coupon Rate: 28% p.a. if BTC/USD fixes above Coupon Level, 0% pa otherwise
Coupon Level: Above 60,000
Strike: 50,000
Protection Level: 45,000
At expiry, if BTC is below 45,000, the USD deployed will be converted to BTC at 50,000
(Spot ref: 61,000)

QCP Asia Colour - 14 Oct 24

- BTC rallied from 62k to 65k as almost 80m of BTC and ETH leveraged shorts got liquidated. Some may attribute today's rally to Mt. Gox postponing it's repayment deadline to Oct 2025 but that news was out on Friday.

- Although there could be many factors that could explain today's move, it is quite an interesting time if we look at historical price action. We are in the middle of October and just three weeks away from the US elections.

- If we look back to 2016, BTC was trading in a very tight range for more than 3 months. It wasn't until three weeks before US Election day that BTC began it's rally from 600 and finally doubling it's price by the first week of January.

- Similarly in 2020, BTC was stuck in a boring range for half a year and only started rallying from 11k just three weeks before US Election day, reaching a high of 42k by January.

- Uptober has been rather disappointing so far with BTC up just +1.2% vs an average of +21%. After months of trading in the range, will history repeat itself? Today's rally has definitely given the market a glimmer of hope just as Uptober optimism was fading.

Trade Idea
As spot pushes higher and the market sets its sights on take-profit targets for Q4, you can now squeeze out an additional 11.76% more profit by deploying our Profit Booster

Profit Booster
Sell BTC for 95k if BTC expires at-or-above 85k on 27-Dec.
Cost: Zero

QCP Asia Colour - 15 Oct 24

BTC rose by another 2.4% since Monday’s commentary, mainly driven by spot demand, reaching 66.5k before settling near 65k.

This optimism is likely due to several factors:

1. The rally may be election-driven, initially sparked by Trump’s lead in prediction markets and polls, and further boosted by...

2. Kamala Harris’s pledge for a crypto regulatory framework signals a friendlier stance toward the industry, a notable shift from the Biden administration.

3. Disappointment with China’s latest stimulus may have led some speculators to shift capital from Chinese equities back into Bitcoin—a scenario we first anticipated in our October 8 Asia Colour [https://xn--r1a.website/QCPbroadcast/1335].

4. A residual boost from the Mt. Gox's repayment delay by another year, easing concerns of a supply overhang.

5. Reports suggesting that Israel may refrain from targeting Iran’s crude and nuclear infrastructure, reducing geopolitical risks.

Crypto Outlook

With Kamala Harris and Donald Trump both increasingly viewed as pro-crypto, the election could be positive for the market regardless of the outcome.

The absence of major inflation or labor data in the near term presents an opportunity for crypto to rise with lower risk premiums. This outlook is further supported by the Bitcoin spot ETF, which recorded a net inflow of $555 million on Monday—the largest since June 4th.

Trade Idea

October seasonality often strengthens in the latter half of the month. We recommend deploying into high convexity trades with zero cost to ride the election optimism through the rest of Uptober.

BTC ERKO Seagull

Expiry: 25OCT24
Buy: 66k Call with 69k Knock-Out
Sell: 62k Put
Cost: ZERO
Max payout: $3k per BTC if spot price is just below 69k level at expiry.

Spot ref: 65,300

QCP Asia Colour - 16 Oct 24

BTC continues to remain resilient above the 65k level as betting markets point to higher odds of Trump's win. Crypto assets have been positively correlated to a Trump victory as his crypto policies are much friendlier and more supportive than Kamala Harris'.

US Equities ended lower amid ongoing corporate earnings release season, in particular ASML's report. ASML's earnings and outlook points to a slowdown in chip demand, causing a selloff in semiconductor stocks like NVDA and AMD.

However, the downward move in US Equities did not weigh down BTC as it powered higher to break 67k. This reaffirms the bullish outlook going into 2025.

As central banks enter a rate-cutting cycle, liquidity in the markets will increase, fueling a potential rally in risk assets. The ECB is expected to cut rates by 25bps tomorrow, while the PBoC continues to maintain a dovish stance. The Fed is expected to make two cuts this year, with four more anticipated in 2025.

Trade Idea
In this backdrop of heightened volatility and bullish momentum, QCP's Floating Rate Note (FRN) offers investors a unique opportunity to generate yield through perpetual funding payments, even while waiting for markets to turn decisively bullish.

This USDT-based note allows you to earn returns from perpetual funding rates in both volatile and flat markets, providing flexibility and liquidity during these pivotal moments.

ETH Floating Rate Note (FRN)
Index: Binance ETH-USDT Perp
Minimum Size: 100,000 USDT
Historical 30d Average: 7.6%

For more information about the FRN, reach out to our team at sales@qcp.capital, or if you're an onboarded client, feel free to chat with us via your dedicated trading channel.

QCP Asia Colour - 17 October 24

• BTC rallied 2.20% yesterday evening on the back of strong spot demand, briefly reclaiming the $68,000 handle before stabilising in the $67,000 region.

• The desk saw heavy buying on long-dated 28 Mar options during US trading hours, with 600 contracts at 120k strike. This signifies that optimistic, long-shot buyers are returning amid this rally.

• BTC spot ETF added $456.90 million yesterday, extending to a 4-day winning streak. The strong and growing inflows may be a leading indicator of further rallies as BTC heads back to its all-time-high of $73,790.

• While the US election is the next key catalyst for BTC and crypto, markets remain uncertain as to where BTC will go post election. Options expiring near the election are trading at a 10% premium compared to other expiries. With everyone’s focus on the election, any change in the polls or either candidate’s campaign narrative will be amplified in spot prices.

Trade Idea
QCP's Volatility Momentum Indicator (VMI) was triggered last night, indicating that the market is entering a period of heightened volatility. Given the bullish outlook and spike in volatility, we prefer a Principal Protected Sharkfin strategy to capitalize on upside convexity with zero downside.

BTC PRINCIPAL PROTECTED SHARKFIN
Maturity: 27DEC24
Strike: 80,000
Barrier: 90,000
Max Payout: 64.26% p.a. if spot expires just below 90,000 BTCUSD

Spot Ref: 67,150

QCP Weekend Summary – 19 Oct 24

This week was an exciting one for crypto. BTC rallied 10.48% to a high of 69,000, bringing the 70,000 psychological level into view. Without any key macro data serving as headwinds next week, will this rally continue?

BTC ETF saw substantial inflows throughout the week. It closed on Friday with $203.3 million in inflows and a 6-day winning streak. The consistent inflows into the ETF highlight that institutional demand remains strong. With this morning’s approval by the SEC’s approval for BTC ETF options to be listed on the NYSE, we believe this will provide the ETF with the needed liquidity to attract sustainable inflows.

Bitcoin dominance is currently at a multiyear high of 58%, a level last seen in April 2021. As it approaches key resistance at 60%, we believe this will set the stage for a strong recovery of L1 coins.

In Japan, inflation remains weak with headline inflation at 2.5%, down from 3.0%. Market expectations indicate that the BOJ is unlikely to raise interest rates soon, contributing to a rally in USD/JPY, which is currently below 150.

With US equities close to all-time highs and the Japanese yen on a fresh weakening trend, risk-on sentiment will only grow stronger as we approach the US election. This will propel risk assets higher and support our Uptober narrative.

Trade Idea
With BTC being only 7.9% away from its all-time-high, ETH is long overdue for a strong recovery (45% below its all-time-high). As such, we favour trades with good topside convexity. With the forward basis also moving higher, the payoffs are likely to become more attractive.

ETH PRINCIPAL PROTECTED SHARKFIN
Maturity: 27DEC24
Max Payout: 88.16%
Strike: 3,600 ETH/USD
Barrier: 4,200 ETH/USD
Get paid up to 88.16% p.a. if ETH expires just below 4,200 at expiry.

Profit Booster
Squeeze out an additional 2.8% profit
Sell BTC for 72k if BTC expires at-or-above 70k on 25-Oct.
Cost: Zero

Spot Ref:
68,360 BTC/USD
2,640 ETH/USD

QCP Asia Colour - 21 Oct 24

- ETH played catch up to BTC over the weekend, as it rallied 2% during low liquidity hours on Sunday. Even though ETH outperformed BTC last week (11% gain vs 9.6%), it's still lagging behind BTC this Uptober (4% vs 8%).

- Both BTC and ETH have yet to clear July highs but are closing in on key 70k and 2800 resistance levels. A break above these levels is likely to attract massive retail attention. With the US elections just 15 days away and equities looking strong, the market is definitely optimistic as Risk Reversals have flipped in favour of Calls across all tenors.

- However with no major catalysts this week, we expect crypto to chop around these levels as it attempts to break higher. In terms of macro data, we only have PMI numbers on Thursday (24 Oct) where the market will look for some reassurance if the Fed will remain on their rate cut path.

Trade Idea
With ETH's surprise rally over the weekend, we definitely can't rule out another break higher. A break above 2800, could send ETH above 3000.

Trade the Uptober ETH Breakout with an ETH Call DIGI (3k 25-OCT)
Payout: 10x
(spot ref: 2700)

QCP Asia Colour - 22 Oct 24

- Short-term implied volatility is peaking at election day expiry, with a 10-vol spread over the prior expiry and skews favouring calls over puts, despite BTC being about 8% below its all-time highs

- Meanwhile, the equities market presents a different picture. The S&P 500 is at record highs, with 20% of companies set to report earnings. The options market is skewed toward put protection, pricing in a potential 1.8% move in the index on November 6th, the day after the election.

- The equities-crypto correlation is at a historically high 0.83. Given its tendency to mean revert and differing option market positioning, this could signal a tipping point.

- The election creates a zero-sum scenario for equities, with sector winners dependent on the outcome. In contrast, both candidates are more crypto-friendly than the previous administration, so any weakness in equities may prompt capital to reallocate to crypto.

Trade Idea

Trump's speech in Nashville pushed IV to 85%, compared to the current 55% for the election expiry. This suggests an opportunity to deploy into long volatility trades, as potential delays in the election outcome (e.g. recount) could lead to sharp market swings.

BTC ERKO Strangle (8-Nov)

Max Payout: 6.99x or $10,000 per BTC if spot is just below 85,000 or just above 50,000 at expiry.
Cost: USD 1,430 per

Upside ERKO: Strike 75k, Barrier 85k
Downside ERKO: Strike 60k, Barrier 50k

Spot Ref: 67,700

QCP Asia Colour - 23 Oct 24

The US elections are the event of the moment, with just 2 weeks to go. Trump has started to extend his lead over Kamala in betting markets, and key swing states are now polling Republican. Markets are now pricing in a potential Trump presidency. Talks of increased tariffs and tax reductions are causing the USD to rally and US bond yields to head higher. Given Trump's more crypto-friendly stance, it's no surprise that BTC is trading higher as well.

The S&P 500 continues to push for all-time highs and US 2Y Treasuries yields have broken above 4% again. BTC has made a move towards 69k on the back of a record high in open interest across exchanges. Total futures open interest on exchanges now sit at $40.5 billion.

The market is now pricing 1.5 rate cuts in 2024. The stronger-than-expected labor market and increasing odds of a Trump presidency have brought back hope that growth in the US will remain strong.

All eyes are on the NFP release next Friday as uncertainty around the labor market persists. As the last NFP report before the next Fed meeting, it will play a critical role in shaping expectations for the Fed's next move on interest rates.

Trade Idea
BTC and ETH remain well-supported with potential upside, ahead of the job data release and the elections. In this bullish yet volatile environment, we recommend a Principal Protected Sharkfin strategy to capture upside potential while offering protection against downside risk.

BTC PRINCIPAL PROTECTED SHARKFIN
Maturity: 27DEC24
Strike: 80,000
Barrier: 90,000
Max Payout: 64.26% p.a. if spot expires just below 90,000 BTCUSD

Spot Ref: 67,150

QCP Weekend Brief – 27 Oct 2024

This week was relatively volatile one for the crypto market. BTC retested the local top of 69,500 last seen in July but failed to break through. It eventually retraced its gains, finding support at the 65,000 mark and now appears be forming a consolidation pattern.

BTC ETF net inflows for the week amounted to $997.7 million, marking the 3rd consecutive week of positive flows, signaling robust institutional demand.

Bitcoin dominance continues to rise, reaching highs of 59.75% for the week. On the contrary, ETHBTC broke its key support at 0.03850, sliding 5.85% to a new low at 0.03625. We believe that the uptrend in bitcoin dominance is likely to persist in the near term as bitcoin approaches its ATH levels.

Reports of alleged US government investigation into Tether caused a sharp decline in the price of the USDT stablecoin. USDT tumbled to a low of 0.9965 before recovering above 0.9980s for the week. Tether CEO Paolo Ardoino has thus far denied these claims and it remains to be seen if the allegations are substantiated as this has not been the first time Tether has gotten under such scrutiny.

In the Middle East, tensions continue to intensify as Israel launched retaliatory strikes on Iran for the missile barrage earlier this month.

The Israeli retaliatory strikes alongside the USDT fiasco on Friday created some selling pressure in the markets, with the DJIA and S&P 500 both down 0.61% and 0.03% respectively. Crypto fell shortly after, with BTC briefly dipping to 65.5k at one point.

As the week draws to a close, the focus now is on the upcoming non-farm payroll data next Friday which will provide further insights into the Fed’s next course of action. The current odds of a 25 bps Nov rate cut now sits at a comfy 95.1%, with the market anticipating little surprise.

Trade Idea
We still favour the accumulator to load up on discounted BTC before its eventual breakout from ATH levels.

BTC Accumulator
Spot Ref: 67,000 BTCUSD
Maturity: 27DEC24
Strike: 64,000
Upper Barrier: 74,000
Observation Frequency: Weekly

QCP Asia Colour - 28 Oct 24

Trump’s interview on the Joe Rogan Experience podcast, released nearly a week before the election, has gained significant traction with over 32 million views, driving his Polymarket odds to above 66%.

Despite crypto being touted as the "Trump Trade," BTC’s correlation with Trump's odds appears to be weakening as it aims to break $70k and clear its July highs. BTC is up only 8% this "Uptober," compared to an average of 21%. If spot holds at these levels, this October would mark BTC's fourth-worst performance in the past decade.

Will BTC surpass $70k as the market anticipates next week’s election results? We remain cautious, as we do not expect any surprises in Thursday’s Core PCE numbers or Friday’s NFP data releases.

Total BTC-PERP OI across exchanges stands at $27 billion, approaching this year’s peak. A breakout above $70k could trigger new all-time highs, especially with more leveraged longs joining in.

Trade Idea
Trade the Election Breakout with a BTC Call DIGI (75k 8-NOV)
Payout: 4x

Spot ref: 68,300

QCP Asia Colour - 29 Oct 24

- Bitcoin has surged by 3.5% since our last commentary, breaking the $70k level for the first time in over seven months. This is supported by several factors, including strong spot ETF inflows of nearly $1 billion just last week.

- This euphoria has extended to crypto-related equities, with miners like Core Scientific (CROZ) up 6.2% following a Jefferies upgrade to ‘buy.’ Companies operating at the intersection of crypto and AI, such as IREN, Hut 8, Bitdeer, and TeraWulf, are outperforming as they benefit from increased AI demand and Bitcoin's recent rally.

- In addition, Emory University has become the first university endowment fund to disclose a $15 million position in Grayscale Bitcoin Mini Trust, underscoring the growing appeal of digital assets among funds with traditionally conservative mandates.

- Rising odds of a Trump victory have bolstered both stocks and Bitcoin. We believe BTC is particularly well-positioned to benefit in the medium term compared to equities. A potential Trump administration’s expansionary fiscal policies could push deficits and inflation higher, potentially tempering Fed rate cuts in 2025.

- Implied volatility for the election expiry has climbed to 64% and is likely to rise further. Although call skew has softened as BTC consolidates above the 70k level, perpetual open interest across exchanges is at a yearly high, signaling strong positioning for potential upside.

Trade Idea
Step aside, Contrarians: any dip below 70k now is likely to attract strong buying support ahead of the election. The 8Nov expiry at the 80K strike shows over $200 million in open interest. If BTC holds above 70K this week, we may be on the path to an all-time high—and potentially beyond.

BTC Election Butterfly
Expiry: 8Nov24
Buy: 1x BTC 75/80/85k Call Fly
Sell: 1x BTC 65k Put
Cost: Zero
Max Payout: $5,000 USD per BTC if spot expires AT 80k

Spot Ref: 71,000

QCP Asia Colour - 30 Oct 24

- The price action for Bitcoin has been nothing short of remarkable this couple of days, rising over 8% and breaking the $73k level. The robust inflow into spot ETFs, fresh monetary easing cycles across major economies, and increasing odds of victory for crypto-friendly presidential candidate Donald Trump have been positive catalysts.

- With swing states like Nevada and Pennsylvania potentially tipping the scales, Trump appears to be gaining traction in the polls. Next week will finally mark the conclusion of the presidential race. Will the "Trump Trade" continue or will there be an unexpected turn of events?

- This week’s spotlight is on Friday’s NFP report, a critical indicator of U.S. job market health, with consensus estimates around 110k — approximately half of the previous figure. As the final major data release before next Friday’s Fed meeting, the report is expected to lock in market bets for the Fed’s next move. Currently, markets are pricing in 1.6 cuts, with a 96.5% probability of a 25bps cut in November and a 75% chance of another 25bps cut in December.

- Additionally, this week includes earnings releases from five of the "Magnificent 7" stocks—Alphabet, Apple, Meta, Amazon, and Microsoft. Each is expected to post average earnings growth of around 19-20%, but surprisingly marking the slowest pace in six quarters. While the impact on equities remains uncertain, these releases will be key indicators to monitor for broader market sentiment.

QCP Weekend Summary - 2 Nov 24

Thursday's Core PCE data came in marginally higher than forecasted (2.7% YoY actual vs 2.6% YoY expected). On the contrary, Friday's NFP data delivered a downward surprise (12k actual vs 110k expected), causing the DXY to rebound and reclaim the 104 level.

Despite the weaker NFP print, US unemployment rate remains unchanged at 4.1%. The market's expectation of a 25bps November rate cut has now risen to 96.4% probability.

Equity indices closed Friday in the green after strong earnings from AMZN. US Treasury yield, which initially fell on a kneejerk reaction to NFP data, rallied to a four-month high as the market remain cautious of bond-buying into Election Week. Brent and WTI saw slight gains on reports that Iran was preparing a retaliatory strike on Israel.

BTC teased the ATH on Tuesday night, trading to a high of 73.6k in anticipation of election week. Despite how outstanding BTC has been performing in the entire week, ETH was relatively muted, failing to break through 2.7k levels.

These came on the backdrop of strong ETF inflows, with over 2.1bn of net inflows for BTC throughout the week. BlackRock's IBIT saw 872m worth of net inflow in a singular day, the largest ever since its launch in January.

Despite Bitcoin's dip below $69,000 on Friday, we continue to see significant interest in the market, with OI for both total BTC futures and BTC options staying heightened at $40.65b and $25.3b respectively (an increase of +24.20% and +36.76% compared to the start of Oct) .

Options market is trading BTC 7 day implied vols at 74.4%, substantially higher than the past 7 day realised vols of 41.4%, indicating a significant risk premium around the elections.

What to expect on Election Week

While Trump has been favoured as the next POTUS, bets on Trump have come off significantly from a 66% high on Polymarket, to 57% for Trump and 43% for Harris. Regardless of the outcome, we believe the Elections will be another sell-the-news action, replicating the Nashville Bitcoin conference.