Andrew Melville
Research Analyst
Last Updated:
December 4, 2024
•
2 min read
Crypto Markets Daily Nov 21 2024
Bitcoin tries for $100K. Longer-dated volatility has finally followed the front-end of the term structure higher after two weeks of inversion -- as we highlighted in yesterday's comment. Short-dated ETH skews remain pinned while longer-dated stuff expresses increasing bullish sentiment, despite a pickup in onchain activity. Trump mulls a "crypto-czar" role for his incoming administration.
Volatility for the Long-Term
BTC looks primed to cross the large psychological barrier at $100K, rallying above $97.7K on Thursday morning. BTC Spot ETFs continue their surge in inflows, pulling in $773.4M. We’ve seen volatility as BTC spot price has approached round numbers on the way up – bouncing off of $93K to trade at $87K 7 days ago. We expect volatility around this point too as traders likely take profits at the first 6-figure spot price.
The inversion of the term structure has continued – however, as we highlighted in yesterday’s daily comment, longer-dated volatility has followed up further, rising by a significant 6 vol points over the last 2 days for the first time. Options markets are finally pricing in higher vol expectations over a longer period.
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While BTC skew remains bullish across the term structure, ETH has seen a shift in sentiment. Longer-tenor volatility smiles reflect increasing bullish positioning similar to BTC, but shorter tenors remain unchanged (but still bullish).
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This does reflect some of the poor relative performance of ETH vs BTC over the last week – giving up any of the immediate post-election outperformance and continuing its trend down. However, onchain metrics for Ethereum do show some positive signs – dApp volume has surged 38% MTD.
President-elect Trump has reportedly held discussions regarding a position in the White House purely focused on overseeing cryptocurrency policy and regulation – this would be the first such post in any U.S. administration. Polymarket implied-odds of Trump creating a Bitcoin Strategic Reserve by April 2025 increased from 35% to 45% too. This follows news earlier this week of Trump’s nomination of Howard Lutnick as Commerce Secretary, another pro-crypto candidate.
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Crypto Markets Daily Jan 24 2025
President Trump makes good on his promise to make the U.S. the 'crypto capital of the world' with the announcement of two major crypto policies. Spot price is whipsawing, and derivatives sentiment for options is still skewed towards calls for short and long-tenors. The jury is still out on whether a Strategic Reserve means piling up on bitcoins only, or will include altcoins too, in the chance one will be created at all.