Thahbib Rahman
Research Analyst
Last Updated:
December 4, 2024
•
2 min read
Crypto Markets Daily Nov 20 2024
The term structure of volatility has re-inverted once again – and again in tandem with a rally higher in spot, continuing the spot-volatility correlation that we’ve been repeatedly highlighting in previous daily comments. This time, however, the longer-dated stuff has started to rally too. See that in the chart below, where the 180d tenor (with June the closest listed expiry) meaningfully followed shorter-dated vols higher for the first time.
Re-Inversion Again
The term structure of volatility has re-inverted once again – and again in tandem with a rally higher in spot, continuing the spot-volatility correlation that we’ve been repeatedly highlighting in previous daily comments. This time, however, the longer-dated stuff has started to rally too. See that in the chart below, where the 180d tenor (with June the closest listed expiry) meaningfully followed shorter-dated vols higher for the first time.
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BlackRock’s Bitcoin ETF-settled options (launched on Nasdaq yesterday) opened the floodgates to further institutional interest in structured products. As of yesterday, BlackRock’s ETF options saw $1.9B in trade volumes, with a larger volume of bullish positioning via call options. This outpaced all-but-one crypto-native options exchange: Deribit. The launch also coincided with a surge in Spot ETF inflows, as BTC Spot ETFs pulled in another $829.5M – their 7th-best day since launch.
While geopolitical tensions have historically been bullish for bullion, but not always for Bitcoin (consider the drop in BTC price in Feb 2022 when Russia first invaded Ukraine, or during various moments of the Iran-Israel conflict), the escalation in the Russia-Ukraine conflict has not impacted overall bullish sentiment. BTC indeed rose to new ATHs above $94,000 on Tuesday. This could be early signs of Bitcoin becoming a more consistent macroeconomic safe-haven, bolstered by its institutional adoption.
In DeFi – Solana open interest across futures and options reached new all-time highs of $5.55B, as SOL continues towards its all-time high spot price – note that it's already surpassed its all-time high market cap in 2021. The number of Active addresses on Solana's network (daily) has spiked since August and reached a new all time of 6.16m on Nov 19, 2024. Percentage of ETH staked remains steady at all time highs, fluctuating above 28%, following the drawdown on 5th Nov, election day. This comes alongside the increase in meme coin trading and secondary site, pump.fun, a Solana based memecoin generator, also spiking in November, reaching record daily revenue of $4.5M.
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Crypto Markets Daily Dec 20 2024
Crypto markets are in turmoil with Bitcoin plunging -7.7% in 24 hours, flipping market odds for December price targets on their head. Despite the short-term chaos, long-term bullish sentiment persists - could this be the dip before a rally?
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Crypto Markets Daily Dec 19 2024
The Fed’s 25bps rate came with an unsettling hawkish tone from Chair Powell, jolting markets and unveiling the prospect of fewer 2025 cuts. Traders re-evaluate their risk-on strategies as both equities and crypto see red.
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Crypto Markets Daily Dec 18 2024
Markets brace for pivotal central bank decisions this week. We analyse the latest shifts in sentiment across crypto with a focus on bitcoin’s volatility smiles, funding rates, and spot price trends. Read now to explore the cautious tone gripping traders, muted OTM call activity, and key data points shaping market sentiment.