4 Mar, 24

Weekly Crypto Market Wrap, 4th March 2024

Zerocap

Zerocap

Download the PDF

Zerocap provides digital asset liquidity and digital asset custodial services to forward-thinking investors and institutions globally. For frictionless access to digital assets with industry-leading security, contact our team at [email protected] or visit our website www.zerocap.com

This is not financial advice. As always, do your own research.

Week in review

Technicals

BTCUSD

What a week. As I write we have just broken 64,000 – and the price is looking like it’ll break all-time highs (in USD terms) tonight. We’ve already seen it break highs in other currencies over the past week, but the steadfast USD quote currency is what the market will be watching. We were hoping for a retest of 49,000 last week on the back of PCE numbers (the Fed’s preferred inflation measure) and the GDP figures. Both came in broadly within expectations, which fired up risk assets for another run. Combine this with the net inflows into the ETF, and right now the major cryptoassets could be poised for more upside.

Technically there is not much wood to chop before the 69,000 all-time-high level. We also have a potential gamma squeeze happening in Bitcoin, with optionality at 65,000 and 70,000 and the 25-delta skew looking more and more weighted to OTM calls. Option market makers will need to delta-hedge their positions into these levels, which could be a large reason we are heading sky-high right now.

Key levels

49,000 / 50,000 / 57,500 / 69,000 / 70,000


Spot desk 

Stables

This week we saw off-ramp activity picking up given AUDUSD was trading lower as the week went by. This might also be due to a pickup in activity in Asia as more traders start getting back into the groove after the Chinese New Year festive break. 

There was also an observable continuation in profit-taking on BTC and ETH after an incredible rally. With all-time highs being the next logical resistance level in close proximity now, it’s no surprise many investors are increasingly taking profits at these levels. Given options market gamma expectations, we could see this run to 70,000 before any discernible dip.

Altcoin Season 

Interestingly, we have noticed hedge funds and some private clients rotating from the majors into altcoins, as well as real money bids on alts. Opportunistic rotation into some of the laggards is interesting, particularly on the back of the AI narrative, and the fact that venture capital liquidity is beginning to flood back into the market.

Altcoins like TIA, SEI and RUNE were popular, as well as some lower liquidity alts that are under an NDA investment mandate. Thematically, they are mostly protocol layers and Bitcoin smart contract plays. If you don’t have any idea where to start looking for hidden gems, tracking VC activity is a good start, or giving our desk a call for insight on flows. The desk is well equipped to source liquidity and facilitate the execution of mainstream as well as exotic tokens.  


Derivatives desk
WHOLESALE INVESTORS ONLY

Basis Rate gets even more interesting

We have been watching the Basis rate move all over the place since the Spot ETFs were launched. As seen below the 30d Basis rate reached a high of 28% (p.a.) over the weekend. We are seeing demand to capture the yield premium from this flow via the basis trade. 

Simply sell the future and buy spot to earn the rate in USD. You’ll need rails into the CME, or crypto native exchanges with high fee tiers to make the most of this trade. Our Structured Product team can package this up as an OTC-wrapped product with the yield embedded, or we can issue a Zerocap ISIN and clear the note via Clearstream Luxembourg (underwritten by Marex – S&P BBB rated balance sheet). It’s a great trade for way above benchmark USD yields.


Get in touch with the derivatives team at [email protected] for more information.

What to Watch

  • Bank of Japan governor Ueda speaks at FIN/SUM 2024, on Monday.
  • Australia’s quarter GDP report, on Tuesday.
  • Jerome Powell testifies on Semi-Annual Monetary Policy Report, Jolts Job Openings and Bank of Canada Press Conference, on Wednesday.
  • ECB press conference, monetary policy statement and refinancing rate, on Thursday.
  • US and Canada employment data, on Friday.

* Index used:

  Bitcoin    EthereumGoldEquities        High Yield Corporate Bonds      CommoditiesTreasury Yields
BTCETHPAXG        S&P 500, ASX 200, VT      HYG  SPGSCIU.S. 10Y
DISCLAIMER

Zerocap Pty Ltd carries out regulated and unregulated activities.

Spot crypto-asset services and products offered by Zerocap are not regulated by ASIC. Zerocap Pty Ltd is registered with AUSTRAC as a DCE (digital currency exchange) service provider (DCE100635539-001).

Regulated services and products include structured products (derivatives) and funds (managed investment schemes) are available to Wholesale Clients only as per Sections 761GA and 708(10) of the Corporations Act 2001 (Cth) (Sophisticated/Wholesale Client). To serve these products, Zerocap Pty Ltd is a Corporate Authorised Representative (CAR: 001289130) of AFSL 340799

This material is intended solely for the information of the particular person to whom it was provided by Zerocap and should not be relied upon by any other person. The information contained in this material is general in nature and does not constitute advice, take into account financial objectives or situation of an investor; nor a recommendation to deal. . Any recipients of this material acknowledge and agree that they must conduct and have conducted their own due diligence investigation and have not relied upon any representations of Zerocap, its officers, employees, representatives or associates. Zerocap has not independently verified the information contained in this material. Zerocap assumes no responsibility for updating any information, views or opinions contained in this material or for correcting any error or omission which may become apparent after the material has been issued. Zerocap does not give any warranty as to the accuracy, reliability or completeness of advice or information which is contained in this material. Except insofar as liability under any statute cannot be excluded, Zerocap and its officers, employees, representatives or associates do not accept any liability (whether arising in contract, in tort or negligence or otherwise) for any error or omission in this material or for any resulting loss or damage (whether direct, indirect, consequential or otherwise) suffered by the recipient of this material or any other person. This is a private communication and was not intended for public circulation or publication or for the use of any third party. This material must not be distributed or released in the United States. It may only be provided to persons who are outside the United States and are not acting for the account or benefit of, “US Persons” in connection with transactions that would be “offshore transactions” (as such terms are defined in Regulation S under the U.S. Securities Act of 1933, as amended (the “Securities Act”)). This material does not, and is not intended to, constitute an offer or invitation in the United States, or in any other place or jurisdiction in which, or to any person to whom, it would not be lawful to make such an offer or invitation. If you are not the intended recipient of this material, please notify Zerocap immediately and destroy all copies of this material, whether held in electronic or printed form or otherwise.

Disclosure of Interest: Zerocap, its officers, employees, representatives and associates within the meaning of Chapter 7 of the Corporations Act may receive commissions and management fees from transactions involving securities referred to in this material (which its representatives may directly share) and may from time to time hold interests in the assets referred to in this material.  Investors should consider this material as only a single factor in making their investment decision.

Past performance is not indicative of future performance.

Like this article? Share
Latest Insights

4 Mar, 24

Ethereum Smart Contracts: How They Changed Crypto

Ethereum, launched in 2015, revolutionized the digital world by introducing “smart contracts,” self-executing contracts with the terms of the agreement directly written into code. This

4 Mar, 24

Main Crypto Events in the World

The world of cryptocurrencies is dynamic and ever-evolving, with numerous conferences and events held globally to foster innovation, collaboration, and networking among crypto enthusiasts. Here’s

4 Mar, 24

What is Ethena Finance?

Ethena Finance (ENA/USDe) is emerging as a notable player in the cryptocurrency and decentralized finance (DeFi) sectors. Powered by its proprietary stablecoin, USDe, Ethena aims

Receive Our Insights

Subscribe to receive our publications in newsletter format — the best way to stay informed about crypto asset market trends and topics.

Want to see how bitcoin and other digital assets fit into your portfolio?

Contact Us
Ready to sign up?
Create an Account