The latest moves in crypto markets, in context By Jamie Crawley, CoinDesk news reporter Was this newsletter forwarded to you? Sign up here. |
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Welcome to a new week! Here’s what you need to know today in crypto: |
- Crypto majors were trading flat Monday morning.
- Traders are looking to Nvidia earnings due Wednesday.
- Genesis will return 77% of customer assets, worth $3 billion, to creditors.
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CoinDesk 20 Index: 2,333 +0.3%
Bitcoin (BTC): $67,185 +0.1%
Ether (ETC): $3,106 +0.5%
S&P 500: 5,303.27 +0.1%
Gold: $2,440 +1.1%
Nikkei 225: $2,440 +1.1% |
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Bitcoin (BTC) and ether (ETH) were little changed, suggesting a consolidation after last week's rally. BTC traded at around $67,000 while ETH held steady about $3,100. The wider digital asset market as measured by the CoinDesk 20 Index (CD20) has added 0.3% in the last 24 hours. This week, attention will turn to the SEC's decision on the approval of ether exchange-traded funds (ETFs), with the deadline for a response to VanEck's and Ark/21 Shares' applications due on May 23 and May 24, respectively. Traders may be keeping their powder dry until then. |
Traders are also going to be eyeing Nvidia's earnings, scheduled for Wednesday. Bitcoin trades strongly in correlation with Nvidia, as do artificial intelligence-themed tokens, which surged in February as the chip designer reported better-than-expected earnings. NVDA has risen over 90% year-to-date, with analysts expecting the company to report a big increase in revenue for the quarter ending in April. The direct correlation between Nvidia and ether market movement isn't as strong as it once was during the mining boom. Still, the rising tide of bitcoin and AI tokens – should Nvidia's earnings remain strong – will likely lift all boats. Genesis will return 77% of customer assets, worth $3 billion in cash and crypto, to its creditors. Parent company DCG will not be among them. The lender's holding company filed for bankruptcy in January 2023 following the fallout from events in the crypto market the year before. In the immediate aftermath of the filing, the market was skeptical that customers would be made whole and the bankruptcy proceedings would be completed in an expedient manner. Bankruptcy claims marketplace Xclaim initially listed Genesis claims at 35% of their value in January 2023. As of today, Genesis claims for bitcoin or ether are trading at 97%-110% for claims over $10 million, while claims under $1 million are trading at 74%-94%. |
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Market Insight: 10X Favors Bitcoin 'Covered Strangle' Strategy |
Bitcoin investors looking to generate extra income in addition to their spot market holdings should consider setting a "covered strangle" options strategy, according to research firm 10x. The strategy involves holding the underlying asset in the spot market and simultaneously selling an out-of-the-money call option at levels above the asset's going market rate and selling an OTM put at strikes below the spot market price. "Our favorite strategy is to buy bitcoin Spot, Sell 100,000 strike call, and Sell 50,000 strike put for the December 2024 expiry. Selling the call could yield 11%, and selling the put could yield 6%," Markus Thielen, founder of 10x Research, said in Monday's client note. The strategy is preferred when the market outlook is bullish, but the uptrend is expected to unfold slowly, keeping implied volatility or investors' expectations for price turbulence low. In such conditions, options, particularly OTM call and put options, bleed value faster as expiry nears, making money for sellers. |
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- The chart shows the ratio between Wall Street's tech-heavy index, Nasdaq, and the broader S&P 500 index.
- The ratio has moved past a five-month-long descending trendline, signaling Nasdaq outperformance ahead.
- Since 2016, the inflow of money into the crypto market has been at least partly contingent on optimism toward technology stocks relative to the broader market.
- Source: TradingView
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Disclaimer: The information presented in this message is intended as a news item that provides a brief summary of various events and developments that affect, or that might in the future affect, the value of one or more of the cryptocurrencies described above. The information contained in this message, and any information liked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments. |
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