QCP Asia Colour – 14 January 25

The global market has caught up with the recalibration of the Fed rate cut outlook. The 10Y yield surged to 4.8%, its highest since late 2023, with markets now pricing no rate cuts until October. Equities futures opened 1.5% lower, sending Bitcoin below $90k before a steady recovery to above $95k.

What’s Next?

Key PPI and CPI data are on the horizon. We think potential surprises could come on the upside, as markets begin to adjust to the reality of a prolonged higher-rate environment, with some even entertaining the possibility of a rate hike.

The momentum in rising yields could test financial market resilience. In crypto, cautious sentiment is evident in BTC options flows, with puts rolled below the key $90k support. Front-end vols and flies remain elevated, while the VIX stays high at 18.68 - suggesting volatility to persist through January.

Still, there’s hope for a catalyst. Reports suggest Trump may sign executive orders on day one, addressing “de-banking” and repealing a contentious crypto accounting policy, which could provide a boost to the market.

QCP Asia Colour – 15 January 25

We're less than a week away from the inauguration of the 47th US President, Donald J. Trump. In a manner reminiscent of 2017, Trump has found a way to shake global markets even before officially taking office on 20th January.

Inflationary fears continue to spook the US market. The US job market remains robust as NFP surprised higher last week (+256k v +165k exp.). While CPI appears to be moderating above the 2% target and despite PPI coming cooler, market participants still expect December's CPI to come in higher than the previous reading.

Trump has widely publicized plans to impose tariffs on trading partners, mainly China, driving inflationary fears higher. Contrary to expectations of blanket tariffs from the outset, it now appears the new administration will gradually introduce tariffs on selected imports.

Plagued by the specter of inflation, bond yields have started to creep higher once again. Markets are now pricing only two cuts in 2025 and 2026 (the latest Fed Dot Plot had projected four), and the 10y and 30y US Treasury yields are approaching the 5% level.

As Treasury yields headed higher, equity markets suffered a scare as the S&P500 threatened to break below $5800. BTC followed suit, dropping briefly below $90k.

The macroeconomic environment doesn't look conducive for risk assets right now given the recent developments. However, one bright spot is that Trump's actual policies often differ significantly from his public rhetoric. Inflationary fears may not materialize as severely as markets anticipate.

For crypto, the Trump administration features crypto friendly personnel. Rumours that Trump will enact wide-ranging and crypto-friendly executive orders provide a short term tailwind, potentially supporting prices.

Expect heightened volatility before and after the inauguration as markets digest and adjust to a new term under Trump. We maintain cautious of the downside as the $90k level in BTC has been tested numerous times. Equity markets also appear fragile, and with bond yields globally moving higher, it can spell messy and gappy moves all around.

QCP Asia Colour – 16 January 25

Global markets rallied last night after a weaker-than-expected CPI report eased fears of rising inflation. BTC jumped 4.13% to a high of $100.8K before stabilising just below the $100K milestone. The same level of optimism was also seen in equities as S&P 500 rose 1.83% and Nasdaq gained 2.27%.

Both BTC and ETH spot ETFs experienced healthy inflows yesterday with BTC spot ETFs recording a staggering $723.20 million worth of inflows. The swift recovery in inflows reflects strong institutional demand and suggests an exciting outlook for crypto.

On the options front, BTC JAN calls dominated the market yesterday as traders adopted an increasingly bullish view, snapping up contracts with strikes ranging from $100K to $110K. This is a promising sign as we head into March which currently holds the highest concentration of open interest at the $120K strike. Given all this buzz, could altcoin season be around the corner?

With BTC dominance plummeting from 58.6% to 57.4%, altcoins are expected to outperform as profits rotate into ETH and other altcoins. For confirmation of altcoin season, BTC dominance will need to break below the support at 57.3% while hovering around the 100K milestone.

QCP Asia Colour – 20 January 25

It's inauguration day and in the lead up to today, the incoming leader of the free world launched a market-leading coin with a valuation exceeding $10B, named after himself. The global reach and speed at which $TRUMP surged signal a paradigm shift in capital formation as crypto becomes increasingly mainstream.

Could this be the catalyst that drives the anticipated alt-coin season? Launching $TRUMP on SOL proves to be a significant endorsement of the chain, making it plausible that the SOL ETF could gain approval much earlier than expected. With increased media exposure from similar launches, retail inflows are likely to come streaming in.

Apart from memecoins, BTC appears poised to break higher with funding exceeding 65% on Deribit. Saylor added fuel to speculation with a tweet yesterday, sharing his trademark "Saylor Tracker" which usually signals another round of buying, and a cryptic message, "Things will be different tomorrow", creating additional suspense on Trump's Day 1.

The launch of Trump's memecoin appeals not only to the retail memecoin moonshot masses, but also to major institutions as it solidifies the president's pro-crypto stance. This week, institutional investors are on the edge of their seats, awaiting concrete pro-crypto policies that could significantly influence the future of the economy. The global ripple effects of this clear US "green light" for crypto adoption have yet to fully materialize.

QCP Asia Colour – 21 January 25

Amid ceremonial cannon fire and a star-studded Capitol Hill, Trump’s inauguration sparked speculation about crypto-related executive orders. Sentiment drove volatility buyers to push front-end vols significantly higher, creating massive vol-of-vol, with Friday expiry trading in a 25v range over 24 hours.

When Trump’s speech failed to mention crypto, the sell-off was gradual but still significant, wiping out $816 million in long positions. The BTC vols curve remains firm at the front end, holding in backwardation.

Markets received a stark reminder of life under President Trump, with more volatility-inducing rhetoric. His threat to impose tariffs of up to 25% on Canada and Mexico is a case in point.

Crypto Outlook

While markets await Trump’s move on a potential national strategic Bitcoin stockpile, states are acting independently. According to Bloomberg, eight states, including Texas and Massachusetts, have proposed crypto reserves, with five more poised to follow.

More short term volatility likely looms for BTC which explains the elevated front-end vols, especially with MicroStrategy shareholders set to vote at 10 a.m. NY time on authorizing a substantial increase in share count.

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QCP Asia Colour – 22 January 25

Finally! The U.S. Securities and Exchange Commission’s new leadership has introduced a task force dedicated to developing a regulatory framework for crypto assets. Spearheaded by "Crypto Mom" Hester Peirce, this initiative promises to be a game-changer for the digital asset space.

Shaking off the initial disappointment from Trump’s inauguration, Bitcoin has rebounded by 3.8%, stabilizing around the $105k range. However, its upside remains capped as the market stays cautious, wary of Trump’s tendency to overpromise and underdeliver ahead of any crypto-related executive orders. Will these long-awaited actions finally align with expectations?

Meanwhile, BTC futures continue to trend upward, especially on the front end, as market's net-long exposure from last week remains solid. Bullish bets currently outpace bearish ones by a ratio of approximately 20:1.

What else?

MicroStrategy and its shareholders just can't get enough Bitcoin! The shareholders have approved a major increase in the number of authorized Class A common and preferred shares, raising the total authorized shares from 330 million to a staggering 10.3 billion. This expansion significantly boosts the company’s equity base, enabling MicroStrategy to surpass share volumes of nearly all Nasdaq 100 Index leaders, excluding Nvidia, Apple, Alphabet, and Amazon.

With plans to raise $42 billion in capital through equity and convertible note offerings by 2027, MicroStrategy still has $5.42 billion in equity offerings remaining, doubling down on its commitment to Bitcoin.

QCP Asia Colour – 23 January 25

Is this the calm before an impending storm? The market continues to grind lower even after the SEC announced the establishment of a Crypto Regulatory Task Force. BTC has broken below $106K and is currently hanging by a thread around the $102K level.

XRP and SOL jumped 3.4% and 4.1%, respectively, after a screenshot of the Chicago Mercantile Exchange (CME) webpage offering XRP and SOL futures appeared on X. While CME later clarified that the leaked webpage was an error and no decision had been made regarding XRP or SOL futures contracts, the creation of such a webpage strongly suggests that the launch of these contracts is drawing closer.

On the options front, the desk observed growing interest in the Jan $95K strikes as the market scrambled for downside protection after BTC lost momentum during yesterday's US session. This stood in stark contrast to the bullish market sentiment observed earlier in the day, when traders were gradually building topside positions during the Asia and London hours. With no major catalysts before next week’s FOMC meeting, the market is likely to remain range-bound until there is more clarity on how the recent weak CPI reading has influenced the Fed’s upcoming policy decisions.

QCP Asia Colour – 27 January 25

A week into Trump's presidency and BTC dipped back below $100k, along with other risk assets, as news of China's Deepseek continue to spread from the weekend. The Chinese LLM poses a potential threat to US equity markets by disrupting US AI dominance with their cost efficiency and groundbreaking open-source technology.

Now the question is how will Trump retaliate? Trump has already successfully used the tariff card, forcing Colombia to accept deported migrants. We'll have to wait and see what drastic measures his administration might take to save the US equity market.

As for BTC, we do not foresee a break higher without confirmation on a Strategic Bitcoin Reserve. The Trump administration's evaluation for a 'national digital asset stockpile' was not enough to sustain bullishness in the market, at least in the near term. Risk reversals remain skewed in favor of Calls only from March onwards, indicating that the market is not expecting much until quarter-end. However with China's Deepseek threatening the US market, we wouldn't be surprised if Trump attempts to step in and play hero.

Friday vols and VIX continue to be elevated as the market precariously anticipates FOMC this Thursday (30 Jan). Despite today's move and regardless of the outcome on Thursday, BTC should remain relatively resilient as it continues to trade in this familiar range.

QCP Asia Colour – 28 January 25

And... breathe. DeepSeek is still dominating the App Store charts. Its latest AI release sent shockwaves through Wall Street and risk-on assets yesterday, with the NASDAQ closing 3% lower and NVIDIA plunging an astonishing 17%.

The AI mania that defined 2024 pushed NASDAQ valuations to unsustainable levels, trading at nearly 27x forward earnings. However, 2025 presents a new set of challenges to that narrative, with uncertainties surrounding the Fed’s rate path, Trump’s policies, and this week’s upcoming tech earnings poised to add downside risk to risk-on assets.

Crypto-linked equities weren’t spared, with Core Scientific plunging 29% and miners like Hut 8, Riot Platforms, and Cipher Mining also slid. This decline reflects their growing integration with AI, as many are repurposing mining facilities into higher-tier data centers for high-performance computing.

This move appears driven more by risk-off sentiment than crypto-specific factors. BTC has found some support since our last broadcast and is stabilizing above $102k, with skew favoring calls over puts. This week could test whether BTC’s correlation with equities weakens, particularly as a favorable regulatory environment offers potential support.

As we approach the Year of the Snake, the market’s twists and turns remind us of the wisdom, adaptability, and resilience this zodiac symbolizes - qualities that will be essential as we navigate 2025’s challenges and opportunities. Wishing everyone prosperity and success in the year ahead!

QCP Asia Colour – 3 February 25

Trump went all-in on his first hand.

The White House slapped a 25% tariff on Canadian and Mexican goods and a 10% levy on China. Canada retaliated with its own 25% tariff on $106 billion of U.S. goods, with Mexico expected to follow suit.

Treasury yields bear-flattened—2-year yield rose while10-year yields fell—signaling short-term inflation fears and long-term trade war risks weighing on global growth.

The widening basis between NY and London gold suggests not just an unwinding of popular EFP carry trades but also potential logistical challenges in moving gold between vaults—a reminder of the uncertainty around how far tariffs might extend.

Equities sank across regions, gold dipped, oil spiked, and crypto sold off violently. Acting as a risk proxy before U.S. markets opened, crypto saw nearly $2 billion in liquidations, with ETH hit harder than BTC.

This decorrelation reinforces the view that today’s risk-off move is driven by cross-asset portfolio rebalancing rather than a single-asset event. Expect continued volatility as Trump prepares to negotiate with Canada and Mexico tonight, while claiming tariffs on the EU are "definitely happening."

QCP Asia Colour – 4 February 25

Crypto remains on a rollercoaster, with BTC briefly reclaiming $100k after news of a one-month delay to U.S. tariffs on Mexico and Canada, hinting at potential trade mediation. However, relief was short-lived as China retaliated with new tariffs, sending BTC back to $98k.

China also launched an antitrust investigation into Google, signaling a readiness to escalate tensions by targeting major U.S. tech firms. Any resulting sanctions or restrictions could weigh on earnings, posing a key risk to risk-on assets.

Amid BTC’s climb to $100k last night, markets also reacted to Trump’s executive order directing officials to create a U.S. sovereign wealth fund. While some see this as a potential source of fresh Bitcoin demand, details remain unclear—particularly regarding how it would be funded.

What’s next for crypto? Trade uncertainty continues to cloud the outlook, with options markets now evenly balanced between puts and calls through March. However, volatility could resurface with White House crypto chief David Sacks set to hold a press conference outlining the new administration’s crypto strategy and Trump’s call with President Xi today.

QCP Asia Colour – 5 February 25

TradFi markets continue to chop as participants digest developments from the U.S. and anticipate the next move in this high-stakes tariff war.

U.S. equity markets have lost momentum, with the S&P500 struggling to stay above the key 6,000 level. The volatility of the past week triggered a flush in the crypto space with BTC briefly touching $92k and ETH collapsing to $2,100.

The delay in tariffs against Mexico and Canada has provided some relief to crypto markets. However, the U.S.-China tariff war remains front and center. There is a glimmer of hope that an amicable resolution may emerge from the upcoming call between Trump and Xi Jinping.

Meanwhile, yesterday's conference by Crypto Czar David Sacks disappointed the broader market. A task force has been set up to draft clearer regulations, starting with stablecoin legislation. Additionally, a working group has been formed to evaluate the feasibility of a Strategic Bitcoin Reserve (SBR). While this initiative may take time, we view it as a long-term positive for crypto.

BTC's resilience above $90k is impressive, but we remain cautious about negative geopolitical shocks from U.S.-China tensions, particularly amid global market uncertainty. Furthermore, the lack of near-term crypto-specific catalysts leaves the market vulnerable to negative price shocks. In this environment, a defensive approach and risk management are key, especially given the large liquidations observed on Monday.

QCP Asia Colour – 7 February 25

Bitcoin failed to reclaim the $99K resistance level last night, triggering a broad selloff in the market and pushing BTC back to a new daily low of $95.6K. With a three-day losing streak, the outlook for crypto remains uncertain.

The key event last night was the listing of $BERA on Binance, which saw the token rally to a high of $15.50 before stabilizing around $7.60 this morning. The rally drew liquidity away from other altcoins, contributing to last night’s selloff.

Meanwhile, in the latest update on Trump’s efforts to deregulate crypto, the SEC is reportedly downsizing its crypto enforcement unit. This move is expected to facilitate the establishment of a new crypto task force and foster a more constructive relationship between the SEC and the industry.

Additionally, the FDIC is reviewing its bank guidelines to potentially allow U.S. banks to engage in certain crypto activities — such as custody services and "tokenized deposits" — without requiring prior regulatory approval.

As we head into tonight’s non-farm payroll report, market sentiment remains cautious. The desk continues to observe interest in BTC 28FEB25 80K puts and BTC 21FEB25 90K puts, reflecting persistent caution despite the skew still favoring calls.

QCP Asia Colour – 10 February 25

This Monday continues to set the week's tone—following DeepSeek’s move two weeks ago and last week’s tariff-driven volatility. This time, Trump’s announcement of a 25% levy on steel and aluminum briefly unsettled markets ahead of Powell’s testimony and CPI data.

With Mexico and Canada among the top three U.S. suppliers, the tariffs cast doubt on last week’s temporary delay and could reignite trade tensions. Adding to the uncertainty, Trump’s remarks on potential sanctions against Japan—a key U.S. ally—follow the White House’s move to block Nippon Steel’s takeover of U.S. Steel.

Commodities were largely unchanged, while Asian equities dipped, and BTC briefly dropped to $95K before rebounding—suggesting a sentiment-driven move rather than a fundamental shift in risk appetite. BTC volatility now skews in favor of puts until April, reflecting a lack of upside catalysts.

A feedback loop is emerging—President Trump, highly sensitive to market reactions, is facing a market increasingly calling his bluff. This could embolden him further, adding another layer of volatility.

QCP Asia Colour – 12 February 25

Boringggg! That's how markets have been for the past two weeks. Despite the back-and-forth tariff action between the U.S., Canada, and Mexico—along with the imposition of tariffs on China and U.S. steel and aluminum imports—traditional finance (TradFi) markets have been unable to find a clear direction.

Across multiple metrics, we see no signs of panic on Wall Street. Credit yields remain at cycle lows, and credit spreads between investment-grade and junk bonds have not widened. The VIX appears anchored at 16, suggesting market participants have already bought protection against any further negative news.

Powell's testimony before the Senate reinforced the Fed's stance of adopting a "wait-and-see" approach to rate cuts, alluding to a potentially slower pace of cuts in 2025. Yet, despite this hawkish tone, the U.S. Dollar Index (DXY) failed to rally.

Referencing CFTC data, we infer that the market is heavily long on the dollar. Interest rate differentials also suggest that the USD is overvalued relative to other currencies, which could explain why DXY has struggled to gain traction. Given that negative news has likely been priced in, we believe USD now faces greater downside risk. Any positive news could force USD longs to unwind their positions en masse, potentially sending risk assets higher. Tonight’s CPI release could be the catalyst that triggers a sharp move lower in DXY.

However, this rising tide may not lift all boats. Bitcoin (BTC) continues to underperform equities and gold, suggesting some hesitation within the crypto community. Liquidity remains thin across the numerous new listings each week, and last week’s large-scale liquidation wiped out many traders.

For participants still holding long positions in crypto, following institutional flows and purchasing downside protection may be the best strategy—especially since put options remain relatively cheap for now.

QCP Asia Colour – 13 February 25

“The time to buy is when there's blood in the streets!” Buying the dip was the winning trade overnight following the post-CPI flush. Headline CPI came in hotter than expected, while core CPI was also slightly higher. This shifted market expectations, with the Fed now expected to delay its first rate cut of the year until December, triggering a bloodbath.

BTC plummeted from $96.5K to $94K, with $163 million in long positions liquidated. However, BTC managed to find its footing at $94K and subsequently made an impressive rally to $98K during the New York session, netting a 4.4% gain.

On the options front, skew continues to favor calls, with the front-end dominating most of the flows, especially for this Friday's expiry (February 14). Calls with strike prices between $97K and $100K have been the most popular in the last 24 hours.

Looking at the bigger picture, the market is likely waiting for Trump’s reaction to the higher CPI print. Will he continue to argue that the Fed should cut rates further this year, or will he give them the leeway to remain data-dependent? With his soft-landing legacy at stake, we expect Fed Chair Powell to remain conservative and maintain his stance of being data-dependent before moving to cut rates.

QCP Asia Colour – 17 February 25

As the market continues to trade sideways, BTC dominance has risen to approximately 60%, nearing 4-year highs as ETH and other altcoins continue to underperform. This past weekend's $LIBRA's "rug pull" scandal involving Argentinian President Javier Milei, does not bode well for similar projects or for those anticipating an altcoin/memecoin season.

With BTC comfortably back in the middle of the range, implied vols continue to drift lower which comes as no surprise given that 7d realized vol has dipped to 36v. With no significant crypto-specific catalysts in sight, price action appears to be more macro driven particularly as the correlation between BTC and equities remains largely intact.

However it is interesting to note that despite the macro uncertainties (tariffs, debt ceiling, inflation etc) and the unpredictability of Trump, crypto implied vols and VIX are still trading at their lows. BTC has proven to be relatively unfazed by the recent macro data and OI has not recovered significantly after the January month-end expiry. This suggests that the crypto options market is just waiting on the sidelines for concrete policy changes rather than just pro-crypto rhetoric.

The market remains undecided on whether it is worth paying for decay even with vols at these levels, which are reminiscent of Q2-Q3 last year when BTC struggled to break out of its multi-month range. Instead, most of the flows have been near dated vol selling or trying to trade the range rather than positioning for a big breakout.

QCP Asia Colour – 18 February 25

In options, the term structure is developing a notable kink around March expiry, particularly in ETH, likely reflecting positioning ahead of Ethereum’s Pectra upgrade - currently in testing and expected to go live at the beginning of April.

Looking at past upgrades, The Merge (Sep 2022) followed a classic "buy the rumor, sell the news" pattern—ETH rallied over 100% from its June lows before selling off post-event. In contrast, Shanghai (April 2023), which enabled staking withdrawals, was met with pessimism as markets feared excess supply. However, once selling pressure failed to materialize, ETH climbed 30% in the following months.

Traders may be positioning for another volatility event as the narrative gains traction, with vols skewed in favor of calls from March 28 onward—potentially setting the stage for the next positioning theme as crypto markets remain sidelined post-Trump’s tariff debacle.

One counterforce is the broader weakness in alts—LIBRA’s collapse, SOL and ETH retracing to pre-election levels, and BTC dominance hovering near all-time highs. Beyond market catalysts, a sustained altcoin recovery may require tangible progress in real-world adoption and network development rather than just speculative flows.

QCP Asia Colour – 19 February 25

Inflation fears remain top of mind as tariff tensions escalate. So far, the only confirmed hit—a 10% tariff on select Chinese goods—is in effect. The proposed 25% tariffs on Canada and Mexico could be avoided if a consensus is reached, while the planned steel and aluminum tariff hike from 10% to 25% is set to take effect on March 12. Markets, however, have largely priced in these risks. Despite ongoing uncertainty, equities continue to climb, while VIX term structure remains flat. The current pain trade? A slow grind in sideways markets, keeping volatility sellers in control while long-vol positions struggle to generate returns.

Crypto remains under pressure, with Solana bracing for impact ahead of a 30M token unlock on March 1. Hedging flows tied to FTX-related SOL are weighing on BTC and ETH, contributing to broader weakness. Meanwhile, Argentina’s latest meme coin frenzy, $LIBRA, saw a staggering $4 billion surge following the president's endorsement before crashing 89%, leaving thousands of investors with significant losses.

Additionally, Strategy (NASDAQ: MSTR) did not purchase any Bitcoin last week, marking the second time that its holdings remained unchanged at 478,740 BTC. However, the company plans to strengthen its Bitcoin position through a private offering of $2 billion in convertible senior notes. Despite these headwinds, Bitcoin remains resilient around the $95k level after dipping towards $93k, but struggling to break higher amid a lack of catalysts in the short term.

QCP Asia Colour – 20 February 25

President Trump announced "25% or higher" tariffs on pharmaceuticals and semiconductor chips, though no specific timeline has been provided. However, companies can avoid these by relocating operations to the U.S. The POTUS highlighted concerns over the unfair treatment of U.S. automobile exports, unveiling levies on automobiles set to take effect on April 2nd.

Meanwhile, the AI competition between China and US has once again taken center stage. DeepSeek is exploring external fundraising, attracting interest from major players such as Chinese giant Alibaba and state-backed funds like China Investment Corporation and the National Social Security Fund. Institutional capital injections into DeepSeek could potentially accelerate the competitive threat to U.S. AI giants, further pressuring valuations in the sector.

In the crypto space, altcoins have garnered significant interest since Trump took office, with several altcoin-linked ETF applications submitted to the SEC, including one for XRP. Notably, Brazilian regulators have approved the world's first Spot XRP ETF. Could this act as a catalyst for Trump's ambition to position the U.S. as the global crypto hub, paving way for further ETF approvals in 2025?

On the options front, there has been strong demand for Feb to Apr high delta BTC calls, likely driven by short-term bullish sentiment following Trump's statements and speculation around a potential Strategic Bitcoin Reserve. Additionally, 25 Delta implied volatility has flipped to skew in favor of calls across all tenors, signaling market positioning for a second leg in the bull run. With inflationary fears easing, the S&P500 reaching new highs, and DXY retracing back to 107 levels, the macro backdrop appears increasingly supportive of risk assets.