Sell Spot, Buy Calls — Ditching Bitcoin for Bigger Profits
[Xangle Digest]
※This article contains content originally published by a third party on July 27, 2023. Please refer to the bottom of the article for the copyright notice regarding this content.
※ This is a summary of the weekly research published by Matrixport on July 27th.
Executive Summary
While positive news catalysts could have lifted crypto prices much higher — notably, the strong performance of the US stock market, the positive outcome of the Ripple Labs lawsuit, or the filing of the US-listed Blackrock Bitcoin ETF – prices have instead been range-bound recently.
As predicted, the crypto trading volumes and volatility have dropped markedly due to very quiet summer weeks. The Grayscale Bitcoin Trust (GBTC) net asset value lowered its discount from -45% to just -27% this year. As the discount has started to widen again, it could indicate the Blackrock Bitcoin ETF news is losing momentum. The result could be a drop in Bitcoin prices. Bitcoin miners continue to sell inventory as prices have exceeded the average breakeven price for Bitcoin mined, which could continue to cap any upside rally.
Exhibit 1: Bitcoin 30-day realised volatility has declined to multi-year lows
Source: Matrixport Technologies
Investors might be well advised to replace their Bitcoin spot with Bitcoin options, notably upside calls, as lower volatility has made option prices cheaper. This allows locking in the year-to-date gains for Bitcoin, while the call option exposure allows participating in any upside rally.
In addition, the freed-up capital could be deposited into interest-yielding products, such as Short-Term Treasury Bill Token (STBT)*, tokenized U.S. Treasury bills where accredited investors can get exposure to the risk-free rate of the U.S. Treasury bills with their stablecoin holdings. STBT currently yields +4.7% — a similar yield as Ethereum staking protocols are offering (5.2%).
*STBT is one of the Top 3 RWA tokens by total value locked (TVL), listed on the DeFiLama RWA token rankings. STBT is a tokenized RWA of US T-Bills. Each STBT is initially traded at 1 USD, backed by short-term US Treasury securities with 6-month maturities, and reverse repurchase agreements (Reverse Repo). Matrixdock is the issuer of STBT, a digital assets platform that provides institutional and accredited investors with access to tokenized real-world assets (RWA). It is a brand owned by Matrixport.
**all charts are provided by Matrixport Technologies based on various external data sources, which can include, Coingecko, Investing, Coinalyze, Stelareum, Token Terminal, YahooFinance, amongst others.
-> 'Click' here to read the full report.
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