Volatility Weekly
Volatility Update, 6/8/23
BitOoda Crypto Market Report 6/8/23
Michael Tauckus
For the past two months, the crypto market has found itself trading sideways, exhibiting a sense of apathy and a lack of liquidity. Implied Volatility has seen a drop of over 20% across most expirations. The options market has been in dire need of a catalyst to generate direction and volatility again. This arrived Monday in the form of regulatory action by the SEC against Binance. The allegations led to an extreme selloff in the span of less than an hour, where we witnessed long liquidations totaling almost $300 million – a 2023 daily record as Bitcoin dropped over 5% and Ethereum ~4%. Surprisingly, this failed to rattle the major options market participants, as there was little panic. Weekly options saw a small jump in implied volatility with a demand for immediate gamma, but there was little reaction in the monthly expirations.
Additional regulatory charges were brought the following morning against Coinbase. Interestingly, BTC & ETH prices remained relatively unchanged as the story broke. In a show of significant resilience, both products rallied impressively later in the day, erasing the Binance losses completely.
Despite this week’s price action, implied vols remain near or at the bottom of historical levels. This low volatility regime may stick around until the market can make a sustained push through one end of the narrowing range. That said, owning gamma is certainly attractive at these levels and low daily break-evens. Call calendars represent good selling opportunities with longer dated expiries trading 5- 7% above the front months. ETH in particular presents great value, trading at a discount of 2-3 vols to BTC. A conscientious trader can take advantage of the current low liquidity and complacency in the market to profit via several low risk/high reward scenarios.
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For the past two months, the crypto market has found itself trading sideways, exhibiting a sense of apathy and a lack of liquidity. Implied Volatility has seen a drop of over 20% across most expirations. The options market has been in dire need of a catalyst to generate direction and volatility again. This arrived Monday in the form of regulatory action by the SEC against Binance. The allegations led to an extreme selloff in the span of less than an hour, where we witnessed long liquidations totaling almost $300 million – a 2023 daily record as Bitcoin dropped over 5% and Ethereum ~4%. Surprisingly, this failed to rattle the major options market participants, as there was little panic. Weekly options saw a small jump in implied volatility with a demand for immediate gamma, but there was little reaction in the monthly expirations.
Additional regulatory charges were brought the following morning against Coinbase. Interestingly, BTC & ETH prices remained relatively unchanged as the story broke. In a show of significant resilience, both products rallied impressively later in the day, erasing the Binance losses completely.
Despite this week’s price action, implied vols remain near or at the bottom of historical levels. This low volatility regime may stick around until the market can make a sustained push through one end of the narrowing range. That said, owning gamma is certainly attractive at these levels and low daily break-evens. Call calendars represent good selling opportunities with longer dated expiries trading 5- 7% above the front months. ETH in particular presents great value, trading at a discount of 2-3 vols to BTC. A conscientious trader can take advantage of the current low liquidity and complacency in the market to profit via several low risk/high reward scenarios.
SEC’s Regulatory Net Now Covers $120 Billion of Crypto After Coinbase, Binance Actions (Link)
Analysis: US SEC crackdown on Coinbase, Binance puts crypto exchanges on notice (Link)
Bitcoin Traders Shrug Off U.S. SEC's Action Against Binance, Coinbase (Link)
Gensler: Crypto firms know exactly how to register, they just don’t want to (Link)
UK Regulator’s New Crypto Rules Include ‘Cooling-off Period’ for Investors (Link)
CFTC Approves Cboe Clear Digital, LLC to Clear Margined Digital Asset Futures (Link)
Soros Fund Management CEO says crypto is ripe for TradFi takeover (Link)
Redemptions surge for Coinbase's staked ether following SEC lawsuit (Link)
Bitcoin price commands premium on Binance.US after SEC lawsuit (Link)
Coinbase CEO Says He’ll Challenge the SEC for ‘Clarity’ on Crypto (Link)
US Bitcoin supply fell over 10% in the past year — Glassnode (Link)
Purpose
This research is only for the clients of BitOoda. This research is not intended to constitute an offer, solicitation, or invitation for any securities and may not be distributed into jurisdictions where it is unlawful to do so. For additional disclosures and information, please contact a BitOoda representative at info@bitooda.io.
Analyst Certification
Michael Tauckus, the author of this report hereby certifies that all of the views expressed in this report accurately reflect his personal views, which have not been influenced by considerations of the firm’s business or client relationships.
Conflicts of Interest
This research contains the views, opinions, and recommendations of BitOoda. This report is intended for research and educational purposes only. We are not compensated in any way based upon any specific view or recommendation.
General Disclosures
Any information (“Information”)provided by BitOoda Holdings, Inc., BitOoda Advisory LLC, BitOoda Digital, LLC, BitOoda Technologies, LLC or Ooda Commodities, LLC and its affiliated or related companies (collectively, “BitOoda”), either in this publication or document, in any other communication, or on or throughhttp://www.bitooda.io/,including any information regarding proposed transactions or trading strategies, is for informational purposes only and is provided without charge. BitOoda is not and does not act as a fiduciary or adviser, or in any similar capacity, in providing the Information, and the Information may not be relied upon as investment, financial, legal, tax, regulatory, or any other type of advice. The Information is being distributed as part of BitOoda’s sales and marketing efforts as an introducing broker and is incidental to its business as such. BitOoda seeks to earn execution fees when its clients execute transactions using its brokerage services. BitOoda makes no representations or warranties(express or implied) regarding, nor shall it have any responsibility or liability for the accuracy, adequacy, timeliness or completeness of, the Information, and no representation is made or is to be implied that the Information will remain unchanged. BitOoda undertakes no duty to amend, correct, update, or otherwise supplement the Information.
The Information has not been prepared or tailored to address, and may not be suitable or appropriate for the particular financial needs, circumstances or requirements of any person, and it should not be the basis for making any investment or transaction decision. The Information is not a recommendation to engage in any transaction. The digital asset industry is subject to a range of inherent risks, including but not limited to: price volatility, limited liquidity, limited and incomplete information regarding certain instruments, products, or digital assets, and a still emerging and evolving regulatory environment. The past performance of any instruments, products or digital assets addressed in the Information is not a guide to future performance, nor is it a reliable indicator of future results or performance.
Ooda Commodities, LLC is a member of NFA and is subject to NFA’s regulatory oversight and examinations. However, you should be aware that NFA does not have regulatory oversight authority over underlying or spot virtual currency products or transactions or virtual currency exchanges, custodians or markets.
BitOoda Technologies, LLC is a member of FINRA.
“BitOoda”, “BitOoda Difficulty”,“BitOoda Hash”, “BitOoda Compute”, and the BitOoda logo are trademarks of BitOoda Holdings, Inc.
Copyright 2023 BitOoda Holdings,Inc. All rights reserved. No part of this material may be reprinted, redistributed, or sold without prior written consent of BitOoda.
For the past two months, the crypto market has found itself trading sideways, exhibiting a sense of apathy and a lack of liquidity. Implied Volatility has seen a drop of over 20% across most expirations. The options market has been in dire need of a catalyst to generate direction and volatility again. This arrived Monday in the form of regulatory action by the SEC against Binance. The allegations led to an extreme selloff in the span of less than an hour, where we witnessed long liquidations totaling almost $300 million – a 2023 daily record as Bitcoin dropped over 5% and Ethereum ~4%. Surprisingly, this failed to rattle the major options market participants, as there was little panic. Weekly options saw a small jump in implied volatility with a demand for immediate gamma, but there was little reaction in the monthly expirations.
Additional regulatory charges were brought the following morning against Coinbase. Interestingly, BTC & ETH prices remained relatively unchanged as the story broke. In a show of significant resilience, both products rallied impressively later in the day, erasing the Binance losses completely.
Despite this week’s price action, implied vols remain near or at the bottom of historical levels. This low volatility regime may stick around until the market can make a sustained push through one end of the narrowing range. That said, owning gamma is certainly attractive at these levels and low daily break-evens. Call calendars represent good selling opportunities with longer dated expiries trading 5- 7% above the front months. ETH in particular presents great value, trading at a discount of 2-3 vols to BTC. A conscientious trader can take advantage of the current low liquidity and complacency in the market to profit via several low risk/high reward scenarios.
SEC’s Regulatory Net Now Covers $120 Billion of Crypto After Coinbase, Binance Actions (Link)
Analysis: US SEC crackdown on Coinbase, Binance puts crypto exchanges on notice (Link)
Bitcoin Traders Shrug Off U.S. SEC's Action Against Binance, Coinbase (Link)
Gensler: Crypto firms know exactly how to register, they just don’t want to (Link)
UK Regulator’s New Crypto Rules Include ‘Cooling-off Period’ for Investors (Link)
CFTC Approves Cboe Clear Digital, LLC to Clear Margined Digital Asset Futures (Link)
Soros Fund Management CEO says crypto is ripe for TradFi takeover (Link)
Redemptions surge for Coinbase's staked ether following SEC lawsuit (Link)
Bitcoin price commands premium on Binance.US after SEC lawsuit (Link)
Coinbase CEO Says He’ll Challenge the SEC for ‘Clarity’ on Crypto (Link)
US Bitcoin supply fell over 10% in the past year — Glassnode (Link)
Purpose
This research is only for the clients of BitOoda. This research is not intended to constitute an offer, solicitation, or invitation for any securities and may not be distributed into jurisdictions where it is unlawful to do so. For additional disclosures and information, please contact a BitOoda representative at info@bitooda.io.
Analyst Certification
Michael Tauckus, the author of this report hereby certifies that all of the views expressed in this report accurately reflect his personal views, which have not been influenced by considerations of the firm’s business or client relationships.
Conflicts of Interest
This research contains the views, opinions, and recommendations of BitOoda. This report is intended for research and educational purposes only. We are not compensated in any way based upon any specific view or recommendation.
General Disclosures
Any information (“Information”)provided by BitOoda Holdings, Inc., BitOoda Advisory LLC, BitOoda Digital, LLC, BitOoda Technologies, LLC or Ooda Commodities, LLC and its affiliated or related companies (collectively, “BitOoda”), either in this publication or document, in any other communication, or on or throughhttp://www.bitooda.io/,including any information regarding proposed transactions or trading strategies, is for informational purposes only and is provided without charge. BitOoda is not and does not act as a fiduciary or adviser, or in any similar capacity, in providing the Information, and the Information may not be relied upon as investment, financial, legal, tax, regulatory, or any other type of advice. The Information is being distributed as part of BitOoda’s sales and marketing efforts as an introducing broker and is incidental to its business as such. BitOoda seeks to earn execution fees when its clients execute transactions using its brokerage services. BitOoda makes no representations or warranties(express or implied) regarding, nor shall it have any responsibility or liability for the accuracy, adequacy, timeliness or completeness of, the Information, and no representation is made or is to be implied that the Information will remain unchanged. BitOoda undertakes no duty to amend, correct, update, or otherwise supplement the Information.
The Information has not been prepared or tailored to address, and may not be suitable or appropriate for the particular financial needs, circumstances or requirements of any person, and it should not be the basis for making any investment or transaction decision. The Information is not a recommendation to engage in any transaction. The digital asset industry is subject to a range of inherent risks, including but not limited to: price volatility, limited liquidity, limited and incomplete information regarding certain instruments, products, or digital assets, and a still emerging and evolving regulatory environment. The past performance of any instruments, products or digital assets addressed in the Information is not a guide to future performance, nor is it a reliable indicator of future results or performance.
Ooda Commodities, LLC is a member of NFA and is subject to NFA’s regulatory oversight and examinations. However, you should be aware that NFA does not have regulatory oversight authority over underlying or spot virtual currency products or transactions or virtual currency exchanges, custodians or markets.
BitOoda Technologies, LLC is a member of FINRA.
“BitOoda”, “BitOoda Difficulty”,“BitOoda Hash”, “BitOoda Compute”, and the BitOoda logo are trademarks of BitOoda Holdings, Inc.
Copyright 2023 BitOoda Holdings,Inc. All rights reserved. No part of this material may be reprinted, redistributed, or sold without prior written consent of BitOoda.
Markets are higher again today with Bitcoin leading the charge, up 2.7% to $45,385 while ETH is lagging a bit, up 1.1% to $2,453. We’re seeing the oft-mentioned ETH call overwriter covering some short calls overnight into this morning, with ~25k Feb calls bought. This is a small part of the book, and we expect more buying from this entity as the market pushes up to avoid auto-liquidation