Weekend Brief

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Reading https://www.qcpgroup.com/insights/weekend-brief/

TLDR :cherry_blossom:

This article discusses the current state of the cryptocurrency market, highlighting the compression of Bitcoin (BTC) volatility and the deepening downside skew in Ethereum (ETH) risk reversals. It also mentions the upcoming launch of BTC and ETH spot ETFs in Hong Kong, which could potentially attract Asian institutional capital.

Key Points :dizzy:

  • BTC volatility has dropped from 70% to 50%
  • ETH risk reversals show a deepening downside skew, possibly in anticipation of further delays in the SEC’s approval of an ETH spot ETF
  • The launch of BTC and ETH spot ETFs in Hong Kong could be a positive catalyst for the market, potentially attracting Asian institutional capital
  • The article suggests a trading idea to take advantage of the consolidating market by accumulating long positions in BTC and ETH

In-depth Summary :memo:

The article discusses the current state of the cryptocurrency market, noting that BTC volatility has dropped significantly from 70% to 50%. Additionally, the downside skew in ETH risk reversals has deepened to -13% in the front-end, potentially in anticipation of further delays in the SEC’s approval of an ETH spot ETF.

The article suggests that the market may have lost faith, or this could just be a short pause in a longer-term bull run. A potential positive catalyst for the market is the upcoming launch of BTC and ETH spot ETFs in Hong Kong, which could attract the inflow of Asian institutional capital.

The article presents a trading idea for those who are still bullish on the market. It suggests deploying a longer-tenor strategy to take advantage of the higher volatility further out, given the steepness of the volatility curve. Specifically, the article recommends a BTC Accumulator (27-Dec) and an ETH Accumulator (27-Dec) with a 20% and 22% discount to the current spot prices, respectively.

ELI5 :hugs:

The article is talking about the current state of the cryptocurrency market. It says that the prices of Bitcoin and Ethereum have been a bit unstable lately, with their prices going up and down a lot. But there’s a chance that this could change soon, as new investment products (called ETFs) for Bitcoin and Ethereum are going to start trading in Hong Kong. This could bring in more investors, especially from Asia, which could help the prices go up again.

The article also gives some suggestions for people who still believe the prices will go up in the future. It says they could try to buy Bitcoin and Ethereum at a slightly lower price than the current market price, and hold onto them for a while to take advantage of the higher prices that might come later.

Writer’s Main Point :thought_balloon:

The main point of the article is to provide an update on the current state of the cryptocurrency market, particularly the volatility in BTC and ETH, and to suggest a potential trading strategy for those who are still bullish on the market. The upcoming launch of BTC and ETH spot ETFs in Hong Kong is seen as a potential positive catalyst that could attract more institutional capital and help drive the market higher.