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

A large portion of the BTC ETF flows, roughly $4bn, has been running the basis trade (delta neutral) indicating that net directionally long ETF exposure from a strategic portfolio allocation perspective was lower than expected. Funding also grinded considerably lower, which could have led to some position unwinding as the term structure becomes less appealing to those running that trade. 

Altcoin unlocks have been brutal. To get a sense of the supply, the table below includes the top 160 and individual unlocks >$10M. Around $25Bn in the last 12m, and that does not account for meme coins, or new project launches, runes/ordinals/nfts so the absolute #s could be higher. VCs are cornered as LP funding is drying up especially to firms who have not proven DPI, resulting in an abundance of supply coming online, and VCs dumping vaporware in an environment with thin liquidity.

Overview

Geopolitical tensions have not yet made the rounds on twitter, potential wider escalation in Lebanon, and a more aggressive stance from Iran is something to watch out for. Macro expectation is positive seasonals in July (first 2 weeks), lower PCE (good for risk), and liquidity could start to pick up. Fed on the lookout for strong numbers. Historically BTC has seen a median return of 9.6% in July. Implied Vols are rending around mid 40s of BTC, and high 50s for ETH, market range bound. 

Tldr;

• BTC ETF inflows running basis (delta neutral)

• Heavy VC supply pressure - VC unlocks, MT Gox, Germany  

• Advisors cannot yet push ETF trades on clients

• Bearish sentiment towards alts 

• Geopolitical Tensions Overlooked 

• Strong Seasonality in July for Macro and BTC

Trade Idea

Buy into wicks - Short Puts on USDT/USDC, and Buy Accumulators on favorite tokens. These could be nice structures to build strong exposure on your favorite picks while earning a juicy premium in a choppy market. Short puts allow you to place a limit order and get paid out (a premium) if you trade above the limit order. If you trade below the limit order then you take delivery at the limit order price, but you still earn the payout. Those trades are interesting for range bound markets, especially as one is trying to position to accumulate for a post summer rally...   

Flow

Some trades on TON accumulators, some of the larger VC funds have been pitching TON very hard recently. We saw structures that allow clients to purchase TON at a 15% discount to the current spot price (fully liquid and unlocked). These are interesting since discounted TON locked token OTC deals have been making their way in the market for some time. To be frank TON accumulators are interesting considering TON discounted OTC deals are illiquid, locked tokens, and have a higher fee structure. Consideration is “Do I want to buy TON at a greater discount, get locked up, and pay a higher fee?, or “Do I want to buy TON at a lesser discount, and be able to offload it unlocked?”

Goodluck out there,

ARP Digital 

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