Crypto Crossfire

Daily Updates:

• Today most of the crypto market has pulled back, while BTC has traded in between $117K and $120K. 
• Following on from last week’s rally that saw XRP touch a new-all time high and ETH surge to $3,800, over the past 24 hours, XRP is down 11.7%, while the second-largest cryptocurrency, Ether, is down 1.3%. SOL has fallen below the $200 mark and trades 7% lower while BNB is down 4.6% after reaching a new all-time high yesterday. 
• As BTC continues to consolidate under $120K, yesterday marked the third consecutive day of Spot BTC ETF outflows. Net flows on Wednesday amounted to -$85.8M, driven primarily by a 227.2M outflow in Fidelity’s Spot BTC ETF product. 
• Ethereum Spot ETFs on the other hand had another strong day of inflows – yesterday the Spot funds collectively purchased $332.2M worth of ether, nearly 10x the average inflow of $34.5M since their launch back in July 2024. 
• Since mid-May, ETFs and corporate treasuries have acquired an estimated 2.83M ETH — worth around $10B.

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• Derivatives markets are currently showing mixed sentiment amidst the slowdown in spot prices. In perpetual futures markets, eight-hourly funding rates for both BTC and ETH have abated from their respective highs of 0.03% and 0.02% and now trade close to neutral. Short-tenor volatility smiles for BTC maintain their negative skew towards OTM puts, though futures prices continue to trade with a premium to spot price for all tenors. 
• ETH futures spot yields are also between 5-8%, however unlike BTC, volatility smiles across the term structure for ETH maintain a positive skew towards OTM calls. That skew has however pulled back from its highs of 11% earlier in the week.

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• While momentum in crypto markets may have hit the brakes, animal spirits have been revived in the US stock market, bolstered by reports that the US and President Trump may sign more trade deals, following on from a major deal made with Japan yesterday. That trade deal will see Japanese goods get charged with a 15% tariff, 10% lower than the rate touted by Trump set for August 1 and a $550B investment pledge by Japan into the US. Trump also announced a trade deal with the Philippines earlier in the week.
• The S&P 500 closed 0.78% higher yesterday for another new all-time high, while the Nasdaq-100 rose by a smaller 0.43%. Japan’s Nikkei-225 index rose for another day, bringing its 5-day performance to 5.91%.
• Futures for European stocks rose more than 1% earlier today on reports that the US was closing in on an agreement with the EU that would set a 15% tariff for most products. 
• Gold prices held steady after falling 1.3% in Tuesday’s trading session as tariff announcements slightly dwindled the demand for haven assets. US treasuries also fell after five consecutive days of gains, as the 10-year treasury yield increased 5bps to 4.4%. 

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• BNY Mellon and Goldman Sachs announced on Wednesday evening that they are partnering to tokenize ownership records of select money market funds, using blockchain infrastructure developed by Goldman. 
• The initiative allows institutional investors to subscribe to fund shares through BNY’s LiquidityDirect and Digital Assets platforms, with mirrored records created on Goldman’s GS DAP blockchain. BlackRock, Fidelity, Federated Hermes, Goldman Sachs Asset Management, and BNY’s Dreyfus unit are participating in the initial rollout. 
• While BNY Mellon will maintain the official books and settlements, the tokenized records aim to streamline fund share movement and unlock new use cases like collateralization.

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• Joe McCann, the founder, CEO, and CIO of Asymmetric Financial, is launching a $1.51B Solana treasury fund, “Accelerate,” aiming to purchase 7.32M SOL via a complex raise involving PIPEs, a SPAC merger, convertible debt, and warrants. 
• Backed by Gores X Holdings, the fund plans to inject fresh liquidity into Solana’s ecosystem and boost protocol development.

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• Vertical farming technology company, Nature’s Miracle Holding Inc. (OTCQB:NMHI), has announced plans on July 23 to establish an up to $20M Corporate XRP Treasury. The initiative includes acquiring XRP tokens, which the company intends to stake for yield and utilise within the broader Ripple ecosystem.
• Initial funding will come from equity financing provided by GHS Investments, already approved by the SEC Form S-1 Registration Statement. The company may also pursue additional funding through strategic placements, structured financing instruments, and further equity issuances.

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• Quantum Solutions Co., Ltd. (2338.T), a Tokyo Stock Exchange-listed IT services company, announced today the official launch of its Bitcoin treasury initiative. 
• Over the next 12 months, the company plans to gradually build a reserve position of up to 3,000 BTC as part of a long-term strategy to diversify its corporate treasury assets.
• The initiative will be managed by its wholly owned Hong Kong subsidiary, GPT Pals Studio Limited, and starts with an initial $10M investment from international firm Integrated Asset Management (Asia) Limited. 

This Week’s Calendar:

Charts of the Day:

Figure 1. BTC at-the-money implied volatility across selected tenors. Source: Deribit, Block Scholes

Figure 2. ETH at-the-money implied volatility across selected tenors. Source: Deribit, Block Scholes

Figure 3. BTC 25-delta put-call skew ratio across selected tenors. Source: Deribit, Block Scholes

Figure 4. ETH 25-delta put-call skew ratio across selected tenors. Source: Deribit, Block Scholes