RESEARCH
BEQUANT Crypto&Coffee
The market followed a choppy price action yesterday, with Bitcoin failing to gather enough momentum to make a break through the $50,000 level. Still, despite the subsequent retreat into the low $47,000 level, Bitcoin and the rest of the market staged a healthy recovery, which also continued overnight during the Asia session. The dampened price action by oil, driven by the lacklustre data out of China where the Caixin Services PMI printed its lowest reading since April last year, while the latest private sector inventory report showed a substantial surprise build in crude stockpiles. Oil super cycle has been talked about for some time and thus inflationary fears, although it is also now expected that the OPEC will look to try to cool down the oil market by raising production. Said otherwise, macro will likely remain the driving force behind the price action going forward and thus the pull back in risk assets offers an opportunity to re-establish longs at lower levels, with a view that policy makers will try to calm market fears of inflation spiralling out of control. With that in mind, it is worth recapping the price action in the options market where, as so tactfully covered by CoinDesk citing data from Laevitas, that block traders took bull call spreads at $75,000 and $100,000 strike call options expiring on May 28 via over-the-counter (OTC) trading and settlement desk Paradigm, said otherwise these could be institutions betting that bitcoin will hit at least $75,000 by summer. Bitcoin's skew has shifted a touch lower recently, while Ethereum's shorter-term positioning is yet to witness similar bullish positioning. In terms of news flow, CoinDesk reported that PayPal is said to be in the process of buying Curv, a technology firm that powers the secure storage of cryptocurrency, according to three sources familiar with the situation. Israeli news outlet Calcalist reported Tuesday that Curv was being sold for between $200 million and $300 million, without naming the buyer. Several people in the cryptocurrency space have said PayPal, which made an entrance there last year, turned its attention to Curv after talks to buy crypto custody and trading firm BitGo fell through last year. PayPal offered $750 million in cash for BitGo, according to two sources familiar with the deal. It's the assessment of Glassnode data points out that there are roughly 4 million Bitcoin is circulating freely right now and the number has been getting a little smaller with each passing month over the last year. Furthermore, analysts go on to suggest that the pattern suggests that the ever-decreasing supply of bitcoin available to buy and sell might lead to a price surge as more institutional investors embrace the largest cryptocurrency as an investment.
