Mid-Week Musing 5.18.22
Market update, Huge ETH trades happening and El Salvadors BTC conference.
Table of Contents
📊 Market Update
💵Huge ETH trades
👍El Salvador holding a BTC conference for Politicians
🧠Three Interesting Stories
3 min read
Mid-Week Musing
Markets have been quiet after last week’s UST debacle. Still in shock, I’m assuming. I wouldn’t be surprised to see another spike in volatility on the back of another push down over the coming months. Luna has brought rent-seeking regulatooors out of their caves, crawlspaces, and dens looking for another industry to stifle and suck dry. If this were to happen, I would be looking to buy quality on the way down. In fact, I’ve already started.
Both $BTC and $ETH seemed to have stabilized for now. SPX has done a 2% bounce in 3 days coming off a 52-week low. The last time we saw that was ‘08 and 2020. Make of that what you will. (Written 5-17-22)
BTC
ETH
SPX
Options
Watching block flows this week has been interesting and impressive. To start, we saw massive Jun Put Fly’s being bought as insurance. It’s worth noting that since this trade was placed ETH has dropped 8%.
Trade: ETH 3 Jun 22 1400/1600/1800 Put Butterfly 3,500x (14,000 ETH) @ 0.0095 ETH, Vols 137.8% 116.7% 100.8%, Ref 1990.64, Blocked on DBT (via Paradigm)
Trade: ETH 3 Jun 22 1500/1600/1700 Put Butterfly 4,000x (16,000 ETH) @ 0.003 ETH, Vols 129.0% 118.5% 110.5%
Trade explained here. 👇
We also saw massive long-dated Call Spreads being bought on the wings. Apparently, someone thought gamma was cheap enough to punt on. Or they have a crazy strong conviction that the ETH merge is going to happen while simultaneously Powell capitulates on his hawkish agenda.
40k Mar 5500/6000 call spreads bot
20k Dec 4000/4500 call spreads bot
This flow led to Paradigm being 66% of Deribits ETH volume yesterday.
ETH 24hr volume (till 17May2022 15:00 UTC):
Deribit: 309386.0x, $637.4m
Blocked: 203606.0x, $419.8m (65.8%)
Missed: 25395.0x, $52.1m (8.2%)
El Salvador
Right now El Salvador is holding their own Bitcoin conference of sorts, except, to attend this one you have to be a Central Bank or foreign dignitary.
It’s kind of cool to see these smaller countries coming together to talk about Bitcoin and its use cases. However, the certified cynic in me wonders what the end game is here and whether the OG Bitcoin vision is really the goal?
3 Interesting Articles
The MacGuffin Part 1 by Ben Hunt (This piece explains in-depth what I hinted at above.)
Digital Asset Funds Flow Weekly
Coinvexity 8 is an interesting look into the derivates space with a focus on analyzing liquidity.