Russell - the short interest in GBTC is a function of the arb. As a close end fund it trades at a discount so no one shorts it any more for the arb. The reason futures are seeing longs is also because of the arb as they trade cheap.
Yes - thats a valid reason. Thats why i added CME positioning. But as i said with my trader hat on - bitcoin should be soaring. That is not is troubling...
Futures trade cheap but not as cheap as BTC hence the long positions etc. a lot of people uses the implied premium as the way to figure out how long or short the market is as a clearer signal. Market is a decent discount overall, showing net bearish. That to me is potential kindling and price is the driver of those to cover and optimism to come back into the market
With every other commodity I have looked at , when forward futures trade above spot - i have found that to be bearish. Are you saying that doesn't work with bitcoin beacuse all the liquidity is elsewhere?
Correct. Currently, spot is the tail that wags the dog but in other markets it the futures. This is because actual crypto is needed for usage in Web 3. Physical ownership is vital.
You'll love the username. Looks like he is using perpetual futures from crypto exchanges and not CME. Loaded into a present-day chart and the traditional contango=overbought/backward=oversold pattern holds. It's currently in backwardation in this part of town.
Why would CME be different? A different sub population of traders hedging/arbing/speculating differently?
I will admit to not being a crypto expert. My notes were just pointing out, that if crypto was like other financial assets, it has a number of negative signals I have seen with other financial products....
As far as I can tell, CME would not allow anyone to get big enough exposure to be a risk to the exchange. That will be in bigger, more liquid products with a long price history.
"BP, Shell & Exxon are all abandoning their multi-decade Russian investments knowing they won't get 1 cent back. Russia can't access USD EUR CAN JPY or CHF. All that's left is crypto. Expect every major government to come for it next. As w real assets in Russia, it'll go to zero."
What probability do you assign to that event? Long physical BTC & puts against MSTR might be a good strategy as a hedge?
I reckon GBTC is definitely a smaller factor than before and there are some interesting gaps on the CME futures at lower levels.
Agree on stored energy and cost of energy has an impact.
I did take a position in digital assets but hedged it with SQQQ x3 leverage and oddly (up to now) I’m up in both trades. There has been a historic correlation with QQQx3 but that (if only short term) seems to have decoupled.
Option Open Prep Interest from Glassnode is a useful indicator when it’s frothy and when short sellers start fishing for stop losses. It’s back at mid Feb levels from yesterday.
My gut is market shock from FOMC mid March and then let’s see how it performs then.
GBTC Shares Outstanding unchanged at 692,370,100 since Feb 2021. See https://grayscale.com/products/grayscale-bitcoin-trust/ and https://www.coinglass.com/Grayscale#Holdings (slow decay is from coin entitlement per share decreasing to generate 2% pa fee)
Russell - the short interest in GBTC is a function of the arb. As a close end fund it trades at a discount so no one shorts it any more for the arb. The reason futures are seeing longs is also because of the arb as they trade cheap.
Yes - thats a valid reason. Thats why i added CME positioning. But as i said with my trader hat on - bitcoin should be soaring. That is not is troubling...
Futures trade cheap but not as cheap as BTC hence the long positions etc. a lot of people uses the implied premium as the way to figure out how long or short the market is as a clearer signal. Market is a decent discount overall, showing net bearish. That to me is potential kindling and price is the driver of those to cover and optimism to come back into the market
With every other commodity I have looked at , when forward futures trade above spot - i have found that to be bearish. Are you saying that doesn't work with bitcoin beacuse all the liquidity is elsewhere?
Correct. Currently, spot is the tail that wags the dog but in other markets it the futures. This is because actual crypto is needed for usage in Web 3. Physical ownership is vital.
Has CME bitcoin ever not been in contango? Can get current quote easy but can't find history.
Another perspective provided by:
https://www.tradingview.com/script/awzXSpKB-BTC-Contango-Index/
You'll love the username. Looks like he is using perpetual futures from crypto exchanges and not CME. Loaded into a present-day chart and the traditional contango=overbought/backward=oversold pattern holds. It's currently in backwardation in this part of town.
Why would CME be different? A different sub population of traders hedging/arbing/speculating differently?
I will admit to not being a crypto expert. My notes were just pointing out, that if crypto was like other financial assets, it has a number of negative signals I have seen with other financial products....
As far as I can tell, CME would not allow anyone to get big enough exposure to be a risk to the exchange. That will be in bigger, more liquid products with a long price history.
Tweet by Zeihan:
"BP, Shell & Exxon are all abandoning their multi-decade Russian investments knowing they won't get 1 cent back. Russia can't access USD EUR CAN JPY or CHF. All that's left is crypto. Expect every major government to come for it next. As w real assets in Russia, it'll go to zero."
What probability do you assign to that event? Long physical BTC & puts against MSTR might be a good strategy as a hedge?
Definitely possible. The puts on MSTR sounds good - but i imagine the premium is pretty chunky
Very illiquid, but April'22 'BK' puts ($100) are available for ~50c (max payout 200X). May around ~80c (125X).
I reckon GBTC is definitely a smaller factor than before and there are some interesting gaps on the CME futures at lower levels.
Agree on stored energy and cost of energy has an impact.
I did take a position in digital assets but hedged it with SQQQ x3 leverage and oddly (up to now) I’m up in both trades. There has been a historic correlation with QQQx3 but that (if only short term) seems to have decoupled.
Option Open Prep Interest from Glassnode is a useful indicator when it’s frothy and when short sellers start fishing for stop losses. It’s back at mid Feb levels from yesterday.
My gut is market shock from FOMC mid March and then let’s see how it performs then.