Andrew Melville
Research Analyst
Last Updated:
November 12, 2024
•
2 min read
Crypto Markets Daily Nov 12 2024
Four of the five worst performing large-cap tokens over the last 7 days are stablecoins: USDC, USDT, and Dai, First Digital USD. They haven’t depegged, they just haven’t rallied like everything else. AI and compute-related tokens populate much of the list of top performers – the category, like DeFi and other developer-reliant categories, stands to benefit from the incoming administration’s promised regulatory push. BTC Spot ETFs saw another inflows of $1.1B on Monday. All U.S. Spot ETFs have recorded net inflows of $8.3B since Oct 10, totalling 31% of their total inflows of $26.97B since launch.
Cash Isn’t King
Four of the five worst performing large-cap tokens over the last 7 days are stablecoins: USDC, USDT, and Dai, First Digital USD. They haven’t depegged, they just haven’t rallied like everything else. Monero is the only top 100 coin by market cap to post a negative return over the same period following a delisting by Kraken.
AI and compute-related tokens populate much of the list of top performers – the category, like DeFi and other developer-reliant categories, stands to benefit from the incoming administration’s promised regulatory push. However, memecoins stand on top as they continue to outperform: (DOGE 50%, BONK 27%, BRETT 22%) – many are likely following Dogecoin’s lead as prime candidates for capital rotation once traders take profits on its meteoric rally, echoing similar behaviour in 2021.
BTC Spot ETFs saw another inflows of $1.1B on Monday. All U.S. Spot ETFs have recorded net inflows of $8.3B since Oct 10, totalling 31% of their total inflows of $26.97B since launch. The ETH Spot ETFs saw their largest inflows since launch on Monday of $295.5M, almost recovering the net outflows since launch (-$28.7M).
The term structure of ATM implied volatility has returned to a strong inversion after the post-election drop. All tenors are lifted, but demand for optionality in the short-term trades with a significant premium to longer-dated tenors.
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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.
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Crypto Markets Daily Nov 19 2024
Derivatives markets retain the bullish trend of the past weeks. Spot yields are almost reaching the positive highs of the past week, skew levels and funding rates remain strongly positive. The term structure of implied volatility is still inverted – but not as extremely as during the pre-election frenzy. The level of inversion has followed spot upward frequently since the election. The BTC Spot ETFs recorded inflows of $254.8 million yesterday, as the SEC approved the listing of options settling to BTC Spot ETFs – first BlackRock’s IBIT on the Nasdaq exchange, and then others on the NYSE and CBOE respectively. This isn’t the first US offering of crypto options – CME currently offer options on BTC and ETH that settle to the futures on their same market. However, we expect that it will open the floodgates to a growing interest in structured products, and for those structured products to have an impact on the supply and demand of volatility in existing crypto options markets.
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Crypto Markets Daily Nov 18 2024
Derivatives markets reflect the start-of-week bullishness. Sentiment indicators have been growing more bullish alongside the growth in short-tenor vols. Market participants are seeking exposure to upward price movements through call options and futures yields have been on the rise just as perp funding rates are strongly positive, indicating leverage buildup for both tokens.