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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It's Thursday! Here’s what you need to know today in crypto: |
- Bitcoin stabilized around $58,000 after the Fed ruled out an interest-rate hike.
- U.S. ETFs experienced their highest daily outflows, $563.7 million.
- BlackRock sees new ETF inflows from different types of investors.
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CoinDesk 20 Index: 2,078 +4.2%
Bitcoin (BTC): $58,282 +1.4%
Ether (ETC): $2,992 +3.8%
S&P 500: 5,018.39 −0.3%
Gold: $2,309 +0.4%
Nikkei 225: $2,309 +0.4% |
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Bitcoin stabilized around the $58,000 mark after the U.S. Federal Reserve kept the benchmark interest rate unchanged on Wednesday. Chair Powell said the economy is too strong to cut rates while ruling out increases despite disappointing inflation figures. Having lost the $60,000 support level late on Tuesday, BTC fell as low as $56,500 yesterday, with U.S. spot ETFs seeing outflows of $563.7 million, the highest daily figure since the funds listed in January. At the time of writing bitcoin was priced at $58,282, up 1.4% over 24 hours. The digital asset market at large is up around 4%, according to CoinDesk 20 Index (CD20), as altcoins such as SOL and AVAX led a recovery from Wednesday's rout. |
The 11 spot bitcoin ETFs saw combined net outflows of $563.7 million on Wednesday, according to Farside Investors and CoinGlass, extending a five-day losing streak. Fidelity’s FBTC spearheaded outflows on Wednesday, losing $191.1 million in withdrawals, while Grayscale's GBTC saw $167.4 million pulled. Bitcoin, like other risk assets, is sensitive to changes in liquidity conditions and witnessed a brief rally from $56,620 to $59,430 on Wednesday after the Fed said it would curtail its quantitative tightening measures in June and introduced a program to buy back billions of dollars of government debt to improve liquidity in the bond market. The bounce was, however, short-lived and did little to stem the ETF outflows. BlackRock's head of digital assets predicts that a new wave of inflows from a different type of investor is coming to bitcoin ETFs. Robert Mitchnick told CoinDesk in an interview that the coming months will see sovereign wealth funds, pension funds and endowments start to trade in the spot ETFs. BlackRock is seeing “a re-initiation of the discussion around bitcoin,” which turns on the topic of allocating to bitcoin and how to think about it from a portfolio construction perspective. He added that BlackRock has been talking about bitcoin to these sorts of institutions for several years, suggesting there could be a lot of pent-up demand for exposure via the ETFs. |
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Market Insight: Bitcoin 'Call Writing' Back in Vogue |
Writing or selling bitcoin (BTC) call options, one of the most favored yield-generating strategies in late 2022-early 2023, is back in vogue as the recent market swoon has dented the appeal of the cash and carry arbitrage. Selling a call option is a way of offering insurance to the buyer against bullish price moves in return for compensation, called a premium. The premium received is the maximum profit a call option seller stands to make. Traders are selling $80,000 BTC call options expiring at the end of May, according to algorithmic trading firm Wintermute. Should BTC end May below $80,000, they will walk away with the entire premium received. "One popular strategy among traders is to sell out-of-the-money call options at higher strike prices, like the $80,000 mark set for the end of May. These strikes are beyond the current high range and are less likely to be exercised, allowing traders to collect premiums while reducing their risk exposure," Wintermute said in a note shared with CoinDesk. |
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- The chart shows the spread between bitcoin's price on Bitfinex and the cryptocurrency's global average price.
- The spread has widened this week, with bitcoin trading at a premium of over $100 on Bitfinex.
- Perhaps traders from Bitfinex are buying the dip.
- Source: Trading View
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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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