QCP Asia/London Colour – 21 May 24
- Overnight news (see above) took a complacent market by surprise (at least those that didn’t read the QCP broadcast yesterday)
- If approved, this move is far from over with ETH at 4k as a natural short term target and at 5k for later in the year
- ⁠If not approved, we could expect an ugly move back to 3k
- ⁠This uncertainty has resulted in higher volatility, but the better trade might be spot-futures basis which is now yielding above 10% again

Trade Idea:
1. Sell Spot-Forward BasisThe market has given us another chance to lock in double digit annualized yields from June onwards.

BTC:

| index | AnnRate(%) | |:\-\-\-\-\-\-\-:|\-\-\-\-\-\-\-\-\-\-\-\-\-:| | 27SEP24 | 11.98 | | 27DEC24 | 12.12 | | 28MAR25 | 11.61 |

ETH:

| index | AnnRate(%) | |:\-\-\-\-\-\-\-\-|\-\-\-\-\-\-\-\-\-\-\-\-\-:| | 28JUN24 | 10.32 |

QCP Market Alert - 21 May 24

- Unconfirmed rumours of SEC doing a flip, has seen Bloomberg commentators increasing the odds of approval this week to 75%.
- ⁠Exchanges are being asked to update 19b-4 filings on an accelerated basis suggesting approval is imminent.
- ETH spot has rallied over 10% to 3440 with new leveraged longs.
- ⁠Our view is that it is unlikely that spot can settle here, with approval taking us closer to 4k and denial back to 3k.

QCP Spot ETH ETF Deadline Week - 20 May 24

- First round of the Spot ETH ETF deadlines are approaching this week
23-May: VanEck
24-May: Ark Invest/21Shares
- ETHBTC reaching Feb 2021 levels last Friday coupled with the lacklustre interest in the options market, hints that the market is anticipating a rejection and a non-event.
- ETH has successfully defended the 2900 levels multiple times this year and has formed a strong support
- Given ETH's duality of a store of value and a layer 1 Blockchain network. An approval would likely result in ETH outperforming the price action of BTC upon it's approval.
- Given the resounding lack of interest in the market, the risk is to the topside with a surprise approval catching everyone off guard, triggering a short squeeze taking us easily back to recent highs

Trade Idea
Spot Ref: 3,100 ETHUSD

ETH Accumulator (32 weeks, 27-Dec 24)
Buy ETH at 21% discount (2,450) every Friday if spot is below 3,500

ETH ETF Surprise Approval Ticket
Payout: 14.28x
Expiry: 31-May 2024
At expiry, If ETH is above 4k, you get 14.28x the prems paid

QCP Asia and Europe Colour - 14 May 24

- Spot came off for BTC and is now hovering at 61.8k, right in the middle of the range from yesterday's highs (63.5k) and last Friday's lows (60.1k).
- We expect Powell's speech tonight to be carefully worded as always, resulting in a muted market reaction.
- On the other hand, CPI numbers tomorrow may be the catalyst to finally help the market pick a direction.
- While the general market continues to drift off into the summer, GME has emerged after a long slumber, pumping 80+% yesterday off the back of Roaring Kitty's tweet. 🙀
-Could this be the start of a memecoin frenzy?

Trade Idea:
Utilize our ZCC to receive upfront yields on your dollars for punting memecoins.

**BTC ZCC (USD deployment)

Receive upfront payment of 25% p.a. upon deployment**
At expiry, as long as BTC spot is above 47k, 100% of the principal is returned.
If BTC spot is below 47k at expiry, you will buy BTC at 57k level.

Maturity: 9AUG24 (12 weeks)
Strike: 57,000
Protection Level: 47,000
Upfront Payment: 25% p.a.

QCP Asia and Europe Colour - 13 May 24

- Spot has recovered most of Friday's losses, with the 5% drop in BTC to 60k on Friday triggered by hawkish Fed comments.
- We think price action could chop around here as the market digests fundamentals from the several macro events lined up this week:
Tue: US PPI, Powell to speak
Wed: CPI, Retail Sales
Thu: Unemployment Claims
- Given the strong bounce from last week's lows, 60k still seems like a strong support level barring any hawkish surprises (BTC risk reversals are at neutral levels).
- Overall, the desk still remains structurally bullish BTC even as spot continues to consolidate here while the market gets more clarity from the Fed.
- Options flows today saw buyers of BTC Jun topside (65k) and BTC Dec topside (90k-100k strikes).

Trade Idea:
With Spot-Forward Basis yields still in the single digits, you can still generate decent >20% yields from UFCCs (Unconditional Fixed Coupon Convertible). Indicative example below:

BTC UFCC (USD deployment)
(spot ref: 63,000)

Earn a weekly coupon of 22%pa.
At expiry, as long as BTC spot is above 50k, 100% of the principal is returned.
If BTC spot is below 50k at expiry, you will buy BTC at 55k level.

Maturity: 12JUL24 (8 weeks)
Strike: 55,000
Protection Level: 50,000
Coupon Rate: 22% p.a.

QCP London / New York Colour – 10 May 24

- Vols continue to drag as prices fail to break out of the narrow range (BTC May into the 40s and ETH May in the mid 50s).
- We are leaning on two possible bullish factors from here into year-end:
1. US elections will conclude in Nov this year and historically markets tend to be bullish into elections. Specific to this election, Trump has been making crypto-friendly overtures which could illicit a a similar tone from Biden as both try to win the crypto vote. Could this result in crypto-positive rhetoric as the respective campaigns get underway?
2. Unless the Fed clearly rules out rate cuts or hints at rate hikes, it seems like the markets will continue to price in cuts especially on the back of any signs of the US economy slowing down and with other Central Banks cutting as well. These expectations are likely to keep a bullish tone in the market for awhile.
Trade Idea:
Updating levels from yesterday's suggested strategy which we think offers good downside protection for high convexity on the topside for zero cost!
(spot ref: 63k)

BTC ZCC + ERKO Call (2x) Cost: ZERO
Max payout: $100,000 per BTC notional
Expiry: 27-Dec
Put Strike: 60,000
Protection Level: 50,000
Call Strike: 70,000
Call Knockout: 120,000
Collateral requirement: $60k per BTC notional

What does it mean?
At expiry:
1. If spot is just under 120k, your profit is $100k (120k-70k) x2
2. As long as spot if above 70k, there is profit from the 70k call
3. If spot is anywhere between 50k and 70k or above 120k, there is no loss or profit as the structure expires out-of-the-money
4. If spot is below 50k, you will buy BTC at 60k

QCP NY Colour - 6 May 24

- We are seeing some bullish follow-through in vol and rates following the reversal bounce from Friday and into the weekend:
1. BTC risk reversals have gone positive (calls more expensive than puts)
2. Renewed demand for BTC Sep 75k & 100k calls
3. BTC forward yields back above 10%
- ETH is not seeing the same kind of positivity with risk reversals still at -4% likely due to concerns about the SEC not approving the ETH spot ETF deadlines for VanEck and Ark21 on 23 and 24 May.
- However, this does mean the market would be caught offside on ETH if there was a surprise approval. Worth a topside bet perhaps?

Trade idea:
We still prefer a structurally bullish BTC trade with significant downside protection and exponential return on the topside.
(spot ref: 63k)

Sell ERKI + Buy ERKO (27 Dec)
Cost: ZERO
Max payout: $48,000 per BTC notional
- Sell 50k Put with 40k Knock-In
- Buy 75k Call with 123k Knock-Out

What does all this mean?
At expiry,
1. If spot is just under 123k, your profit is $48k (123k-75k)
2. As long as spot if above 75k, there is profit.
3. If spot is anywhere between 40k and 75k, nothing happens (no loss, no profit)
4. Even if spot is below the 50k Put, there will be no loss as the Put is only live if spot expires below 40k protection level.
5. If spot is below 40k, you will buy BTC at 50k.

QCP Weekend Macro - 4 May 24

- Friday's US data releases provided a big bullish boost to markets. A quick follow-on to the dovish FOMC and QRA which lifted prices off the lows just the day before.
- Employment data was weaker than expected across the board which dampens the fear of rising inflation (Non-Farm Payrolls at 175k v 240k, Unemployment Rate at 3.9% v 3.8%, Average Hourly Earnings MoM was 0.2% v 0.3%).
- The stars are aligning with both the Fed and Treasury leaning dovish plus weaker data, which reopens the path for rates cuts this year.
- US 2-Year Yields collapsed from over 5% to almost 4.7%! Does this mark the end of the rampaging USD dollar rally?
- The crypto markets loved this, especially the BTC spot ETFs which saw net inflows across the board totaling $378.3m. Even GBTC was posting a positive inflow number for the first time!

Trade Ideas:
Don't fight the Fed. The Bullish ERKO Seagull strategy suggested on Thursday is already in-the-money.
If you think the bull market has resumed and would still like to buy BTC or ETH below the recent lows of 56.5k and 2814, you can still do so with Accumulators.

BTC Accumulators
(spot ref: 63.5k)
1. 35 weeks (27-Dec expiry)
Buy BTC at 52k every Friday as long as BTC spot price is under 73k.
2. 20 weeks (13-Sep expiry)
Buy BTC at 55k every Friday as long as BTC spot price is under 70k.

ETH Accumulators
(spot ref: 3,100)
1. 35 weeks (27-Dec expiry)
Buy ETH at 2500 every Friday as long as ETH spot price is under 3660.
2. 20 weeks (13-Sep expiry)
Buy ETH at 2700 every Friday as long as ETH spot price is under 3660.

*Please check in your trading chat for details and strategy customisations.

QCP London & New York Colour - 2 May 24

- Both FOMC and QRA were more dovish than expected.
- At FOMC, Powell said that the Fed is not looking to hike rates and announced the slowing of Quantitative Tightening (QT) from $60bn monthly to $25bn.
- For QRA, the Treasury will keep issuances for longer maturities unchanged, reducing fears of a spike in longer-term yields.
- This should help to push down the USD rally which is positive for risk assets.
- BTC has bounced off the 56.5k low and has decisively broke above 58k. ETH has rallied close to 3k again.
- Will we now see a resumption of the bull market?

Trade Ideas:
Zero-cost strategy for max upside on a big bounce in spot price!
(spot ref: BTC 58.5k)

Bullish ERKO Seagull
Expiry: 31-May
Strikes: Sell 56k Put + Buy 60k Call (75k Knock-out)
Cost: ZERO
Max payout: $15,000 per BTC or 337% pa if BTC spot price is just under 75k at expiry.
[Downside]: At expiry, if BTC spot price is under 56k level, USD deployed is converted to BTC at 56k price.

QCP London & New York Colour - 30 Apr 24

- The Hong Kong BTC and ETH spot ETFs kicked off today with terribly disappointing volumes. BTC saw $8.5m and ETH saw $2.5m in volume.
- This might be an indication that institutional crypto interest is concentrated in the US while Asian interest is more private wealth focused and natively dominated.
- The market is trading heavy on the back of this with BTC touching 61k and ETH close to 3k.
- With Amazon earnings and CZ's sentencing coming out this evening we might be looking at a volatile session into New York hours.

Trade Ideas:
Short term downside hedges that are relatively low-cost
(spot ref: BTC 61.2k. ETH 3010)

BTC 31-May (58k Put / KO 50k)
Max payout: 8.25x
Cost per BTC: $850

ETH 31-May (2700 Put / KO 2200)
Max payout: 10.63x
Cost per ETH: $47