Weekly Crypto Market Wrap, 8th April 2024

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

• Tether acquires 8,888 BTC, making it the seventh largest Bitcoin holder in the world.
• Asset manager Monochrome applies for a spot Bitcoin ETF in Australia.
• Ripple to release US dollar stablecoin, seeks to compete with USDT and USDC.
• Bankrupt lender Genesis buys $2.2 billion worth of Bitcoin following redemption of GBTC shares in effort to repay customers.
• Ethereum earnings tripled in Q1 2024, reaching $370 million.
• Crypto staking rewards are now 450% higher than S&P 500 dividends.
• Crypto-related job openings in global companies grow steadily by 30% m/m.
• US job openings rise slightly, labour market steadily easing.
• FED chair Jerome Powell pumps brakes on rate cuts, wants to let incoming data guide the Reserve’s decisions.

Technicals

BTCUSD

The biggest risk to a more sustained downside move last week was the US employment figures (NFPs) that were following on from the gnarly ISM inflation data. Risks were centred around stagflation indicators. Instead, data saw wage inflation at bay, with better-than-expected employment figures. Perhaps we are beginning to see data normalise despite ‘high’ interest rates? Time will tell but for now, the robust data has led to a BTC bounce at the 65,000 level despite the Fed reiterating probabilities of only two rate cuts this year (down from three expected last month).

Technically, we did expect a break lower from 65,000 – at least to take out some stops – but notable real money buyers are sitting at these levels to pick up the slack. The BTC ETF flows have turned positive again this week, which positions spot BTC to be supported in the short term.

Key event risk this week is centred around US CPI numbers (MoM) and the FOMC minutes. It looks like the market is looking for an excuse to bid anything dovish could light the fire to get us above all-time highs again, if we don’t get there before the data.

Key levels

65,000 / 70,000 / 73,130 (ATH!)

---

Spot desk 

Crypto/fiat flow balances

Surprisingly, we’ve seen heavier than usual off-ramp activity after the easter break even though AUD has strengthened throughout the week In the majors. We’re seeing decent buy-the-dip activity on desk, in line with the action on BTC and ETH prices this week. 

SOL frenzy – Follow up

Following the Solana mania from the previous week, the frenzy seems to have somewhat tapered down, with meme coins like SLERF, WIF and BONK being hit heavily over the week. Interestingly, we’ve yet to see clients taking profits on their tokens. Perhaps these tokens are truly becoming a collectors’ item, or maybe it’s a “hold on for dear life” manoeuvre. 

Bitcoin Halving 

With the Bitcoin halving just 12 days away, we are expecting a pickup in volatility over the coming weeks. Combine this with 2-weeks of consolidation and Open Interest in derivatives rising, we could see some action both ways.

---

Derivatives desk
WHOLESALE INVESTORS ONLY

We’ve seen realised volatility drop off significantly since the highs of March, while implied volatility has sustained its levels. As seen below, 15-day implied volatility is trading roughly 27 vol points above 15-day realised volatility. One could trade this negative carry by selling ATM options to harvest the implied premium, and delta-hedging your spot exposure. This is a more complex trade for those without options experience – hit the team up if you’d like it packaged into a Structured Product.

Contact the derivatives team at [email protected] for more information.

What to Watch

• USD CPI, FOMC meeting minutes and Bank of Canada’s monetary policy report, on Wednesday.
• ECB press conference and EU’s monetary policy statement, on Thursday.
• UK’s month-on-month GDP, on Friday.

* Index used:

Bitcoin	Ethereum	Gold	Equities	High Yield Corporate Bonds	Commodities	Treasury Yields
BTC	ETH	PAXG	S&P 500, ASX 200, VT	HYG	SPGSCI	U.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.