ARP's Desk View

ARP's Desk View

ARP Digital's Desk will be sharing weekly insights on relevant flows, and trade ideas to help its trusted partners capitalize on market catalysts.

Worth a highlight:

Nvidia’s valuation of $3.3tn surpassed Apple and Microsoft, making it the most valuable company in the world.

Crypto Investment Vehicle Flow Patterns - Comparative Analysis: Over the past four weeks, ETH ETPs have seen net inflows of 86,472 ETH ($300 million). This mirrors the inflows seen in BTC ETPs in November 2023, where BTC ETPs had net monthly inflows of $1.25 billion. This suggests potential U.S. spot ETH ETF inflows could be about 25% the size of U.S. BTC flows.

Overview

TL;DR:

• Market Momentum: Lacks direction, with diminished volume and volatility.

• Derivatives: Open interest hovers around all-time high.

• Volatility Levels: 7-day and 30-day BTC volatility at yearly lows.

• FOMC Impact: Provided intraday volatility, but no lasting effect.

• CPI Data vs. Fed: Favorable CPI data balanced by Fed signaling only one rate cut this year.

• Influencing Factors: Delayed interest rate cut expectations and political uncertainty in Europe pushed DXY higher, weakening crypto markets.

Over the past 100 trading days bitcoin has traded in a relatively narrow price range of $60,000 - $75,000, only exiting this range for three days. Volatility trended lower as the market projects a sleepy summer ahead. The VIX (volatility of the S&P 500 Index) along with other volatility indices, are signaling market anticipation of a non-volatile summer across financial markets. Bitcoin has been relatively quiet with a structural volatility downtrend until a sustained range break is achieved. Nevertheless, implied volatility on crypto remains overpriced relative to its trailing 30d historical volatility, signaling that expected probability is on the investor side when capturing vol premiums. This comparative set included a basket of BTC miners, MST, ADOBE, and Telsa.

Trade Idea

Synthetic LP (Yield Product): This strategy is suitable for investors who already own BTC or ETH and are looking to earn a yield on it. It features a typical call overwriting strategy with added advantages from the auto callability feature. It offers a short tenor, maximum flexibility, and yields that could exceed 40% p.a. for ETH with selected moneyness.

Flow

Desk saw a variety of flow this week mainly situated around a slower summer. Investors with the view that BTC was going to stay range bound sold condors (benefits from range bound view). Clients that had previously accumulated ETH are starting to run synthetic LP on their assets to take advantage of the sideways market, and accumulate additional returns during the summer lull.

Goodluck out there,

ARP Digital 

ARP Digital is regulated by the Central Bank of Bahrain as a Category 3 Crypto Asset Service Provider.  All communications and services are directed at Professional Clients only, persons other than Professional Clients, such as Retail Clients, are NOT the intended recipients of our communications or services.  ARP Digital does not provide investment advice, and nothing herein shall be considered, construed as, or deemed to be, investment advice.  Furthermore, nothing herein is intended to be, or shall constitute, an offer or invitation to buy securities or any form of financial instrument or investment product by ARP Digital or any of its related parties or persons.