Key Takeaways‍

• All crypto was down, BTC stood out, possibly seen as the ‘safe haven’ crypto

• ETH underperformed BTC again and is struggling for direction

• APAC were better buyers, with even flows across EMEA and the Americas

• Fund managers led with outsized buying, while banks had a slight sell bias

• Tradfi markets are bouncing, which may be a signal for crypto

Looking back‍

While crypto was down across the board, the big theme of the past week has been the stark contraction in price action across coins. BTC has been a notable standout; despite trading lower on the week, it’s been comparably strong when looking at the market as a whole. ETH has been sharply underperforming BTC, down about double what BTC is over the same time frame, and despite it clawing back some gains following a bounce off the 1,700 level, there’s no clear indication yet that it will regain its footing. ETH’s lacklustre performance has been replicated in the Alts, with little strength and support to be found. Feels as though the market is treating BTC as a sort of “safe haven” crypto, which is keeping its price relatively buoyed.

Breaking down recent flows shows that our clients have been much better buyers of BTC (56.5%) when compared to other high volume coins. A standout for flows has been BNB, with heavy buy flows over the past week. Otherwise on a coin by coin basis flows have been fairly balanced, with better buying in XLM, and XTZ, and better selling in DOT, AVX, and BCH. APAC has seen very strong buying, especially when compared to the even flows in EMEA and the Americas. Finally, we see funds leading the way with outsized buying, and a slight sell bias from banks.

‍

The choppy market hasn't been reflected much at all in the term future basis, with 1 month and 3 month futures staying fairly stable. The BTC 1 month term future is just about unchanged on the week, with the basis on major exchanges coming in at around 1.4% - 2.3%. BTC 3 month basis is down slightly, about 0.5%; the 3 month basis on major exchanges is currently trading 2.6% to 3%. ETH has been similarly stable, despite its wilder price action, with 3 month ETH basis at 2.6% to 3.2%, and the 1 month basis around 1.5% to 2.5%

The difference in weakness between BTC and ETH has definitely been reflected in the options market this past week, with front end BTC marching downwards while ETH comes up. 1 week and 1 month BTC vols are both down around 4 vols, to 66 and 69 vols respectively, while ETH 1 week and 1 month vols are up around 9 points respectively. Given ETH’s recent price action, short term skew has emphasised bids for puts, moving from 11 vols for puts to 17 on 1 month 25 delta riskies. On the other hand, BTC 1 month 25 delta riskies are nearly flat, up to 20 vols for puts from 19, indicating that the market has become much more cautious of ETH due to its recent performance and in a way it hasn’t for BTC.

‍

Looking ahead‍

Going forward the correlation between the different parts of the crypto market, and tradfi asset classes, will be the signal. Equities are undergoing a bit of a relief rally, and crypto could potentially follow suit.

‍

‍

‍

About B2C2

More than just a liquidity provider, B2C2 is a digital asset pioneer building the ecosystem of the future.

The firm has unlocked institutional access to crypto by providing reliable liquidity across market conditions. B2C2’s success is built on crypto native technology and continuous product innovation, making it the partner of choice for diverse institutions globally.

Founded in 2015 and majority owned by Japanese financial group, SBI, B2C2 Ltd is headquartered in the UK, with offices in the US and Japan.

B2C2 Ltd is registered in England and Wales under company number 07995888 with its registered office at 86-90 Paul Street, London, EC2A 4NE.  B2C2 Ltd is the parent company of the B2C2 group of companies. Products may be provided by different members of the B2C2 group of companies, depending on the jurisdiction of the client and the regulatory status of the product and/or B2C2 group member. B2C2 is a registered trademark.