Tuesday, 30 November 2021

Market Summary

Market Summary 30 November 2021

Bitcoin Price: $57,776.25 (+0.88%)
Ethereum Price: $4,444.53 (+3.49%)


ETH & BNB Hold Strong, Options Weakness, & Liquidity Concerns

  • The strength on BNB and ETH suggests these are the coins buyers are most interested in. So if and when the tide turns in favor of the bulls, these coins are likely to outperform other megacaps in the top 10. AVAX and SOL also have favorable setups as the former has proven the last several weeks.
  • Uncertainty seems to be plaguing global markets on the back of growing coronavirus-related fears that whipsawed markets on Friday. Interestingly enough, the DVOL index, which measures implied volatility (IV) on a 30-day forward basis, has actually gone down in recent days. Implied volatility, more than anything else, is a measure of market uncertainty; when things get dicey, it tends to rise, and when things look unidirectional, implied vol usually falls.
  • The outlook for crypto going into the end of the year seems to be deteriorating a bit, but that doesn’t mean a three-year bear market is underway. Looking at the quarterly and EOY expiry on Dec. 31, the skew is a lot more balanced than short-term weekly expiries. We aren’t likely to see large out-of-the-money call purchases on any of these expiries, but that’s a function of how close we are to expiry rather than sentiment.
  • Mar. 2022 and Sep. 2022 skews, while not pictured, look more positive than these near-term expiries.
  • Throughout November, we’ve seen Binance’s total spot volume stagnate while spreads for a $5M BTC trade got wider. The reason for the daily high on this spread spiking on certain days is almost certainly a consequence of lower trading activity. When orderbooks are not as lively, large orders cannot be filled as easily and incur more slippage, which causes the bid-ask spread to increase.
  • All in all, the market doesn’t look too hot here, but taking the long view, we believe any near-term downside volatility will wind up being rather short-lived. This will be especially true if the macro environment shifts in favor of a more prolonged accommodative policy.


Kelly ETFs files for Ether futures ETF

  • Kelly ETFs, an issuer of exchange-traded funds (ETFs), has filed for a U.S. Ether futures ETF. 
  • The firm filed a Form N-1A dated today with the Securities and Exchange Commission (SEC). The N1-A is used by investment companies seeking to form open-end mutual funds, and registers a product under both the Securities Act of 1933 and the Investment Company Act of 1940.
  • SEC Chair Gary Gensler previously said he was interested in taking a closer look at proposed crypto products under the ’40 Act, especially those holding futures traded on the Chicago Mercantile Exchange. Since those comments, the SEC has approved multiple bitcoin futures ETFs, though an Ether-based product has yet to get the green light. 
  • The Kelly Ethereum Ether Strategy ETF would hold Ether futures contracts that trade on federally regulated exchanges. For now, that means only CME Ether futures. The fund won’t enable direct exposure to ETH price, and is structured similarly to the approved bitcoin futures ETFs. Currently, it’s the only Ether futures ETF before the SEC.


DeFi TVL hits new highs while Metaverse tokens show signs of exhaustion

  • Sentiment in the cryptocurrency market is back on the rise on Nov. 29 as the recent dip down into the “extreme fear” zone on the Crypto Fear and Greed Index improved slightly after Bitcoin (BTC) recovered above the $57,000 support, lifting the index higher into the “fear” zone.
  • The rapid gains seen in projects has led to some concern that the metaverse and gaming sectors could see a significant pullback in the short term if traders take profits and await more sustainable price levels, leading many to speculate as to which sector of the market will be the next to see bullish momentum and price gains.
  • Another sign that activity in DeFi is on the rise has been the uptick in the trading volume on decentralized exchanges (DEXs) such as Uniswap and SushiSwap, which have been seeing a slow increase in activity since the market bottomed in mid-July
  • As seen in the chart above, the volume traded on the top DEXs is now consistently back at levels similar to what was seen during the bull market in the first half of 2021.


MicroStrategy purchases $414.4 million worth of Bitcoin, with total BTC balance eclipsing $3.5 billion

  • Michael Saylor, CEO of enterprise data analytics company MicroStrategy, announced Monday via a Twitter post and company filing that the firm purchased an additional 7,002 Bitcoin (BTC), worth approximately $414.4 million, at an average price of $59,187 per coin. MicroStrategy sold 571,001 shares of company stock between Oct. 1 and Nov. 29 at $732.16 apiece, raising a total of $414.4 million in cash.
  • As of Monday, the company now owns 121,044 BTC, worth up to $3.57 billion. It was acquired at an average price of $29,534 per coin and included capital appreciation from previous coins.


Former Wall Street banker launches $1.5 billion crypto venture fund

  • Former Citigroup executive Matt Zhang has launched a $1.5 billion crypto venture fund called Hivemind Capital Partners, according to an announcement on Monday.
  • Hivemind, a new crypto investment outfit based out of New York will focus on four strategies — yield staking, trading, venture capital investments, and play-to-earn (P2E) gaming. Following its interest in the latter area, the company has also hired former Goldman Sachs analyst Sam Peurifoy.


Popular Ethereum mixer Tornado Cash is ready to integrate with Arbitrum

  • Tornado Cash, a popular Ethereum transaction mixing protocol, is ready to integrate the Layer 2 network Arbitrum.
  • “The protocol’s smart contracts are all set and ready to spin on Arbitrum. They just need help from the community to get deployed & fly with their own wings,” said Tornado Cash in a blog post on Monday.
  • Tornado Cash’s launch on Arbitrum means its users will be able to process Ethereum transactions faster and cheaper. Arbitrum uses optimistic rollups for its scaling technology. Rollups allow for the execution of Ethereum transactions off-chain and store only transaction data on-chain. This reduces the network’s congestion, increases its speed, and reduces transaction fees.

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