At 8 pm on September 24, in a live broadcast on Matrixport’s official YouTube channel, Daniel, head of Matrixport’s asset management, analyzed the dynamics of the cryptocurrency market last week (September 16-September 23), especially the volatility structure and institutional behavior analysis in the options market. He also interpreted the reasons behind the rebound in BTC and ETH prices, and shared how to achieve lower-cost financing and risk hedging in a bull market through collar lending strategies in the options market.
The live broadcast content is as follows:
As of September 24, the global cryptocurrency market remained strong amid uncertainty, with the price of Bitcoin stabilizing above $62,000. Although the market is still under various macroeconomic pressures, investor sentiment is gradually turning optimistic.
Analysis of the causes of market fluctuations
Market sentiment changes and rebounds
Market rebound caused by US interest rate cut : After the Fed cut interest rates by 50 basis points, the cryptocurrency market reacted strongly. Previously, the market was affected by the selling pressure of BTC and the negative sentiment of ETH, and the overall sentiment was relatively pessimistic. After the interest rate cut, the market sentiment quickly reversed and formed a rebound.
MicroStrategy increases its holdings : MicroStrategy announced an increase in its BTC holdings, which, together with the Federal Reserve’s interest rate cut, further boosted market sentiment, and BTC prices may rise to $60,000 to $63,600.
Small and medium-sized market capitalization tokens outperformed BTC : During the rebound, small and medium-sized market capitalization tokens (Altcoin) outperformed BTC, mainly due to the general rise in risk assets and increased market liquidity. Risk assets tend to perform better, especially small and medium-sized tokens.
Market sentiment shifts from pessimism to optimism : The overall market sentiment index gradually shifted from pessimism to optimism, reflecting an improvement in risk sentiment. Multiple market indicators show that funds are beginning to flow back to BTC, market volatility is small in the short term, and the long-term trend of BTC remains optimistic.
Global Macroeconomics and Liquidity Easing
China’s policy stimulus and market rebound : The People’s Bank of China, the China Banking Regulatory Commission and the China Securities Regulatory Commission jointly issued a number of policy stimulus measures, including lowering the reserve requirement ratio and adjusting mortgage interest rates. This boosted the Chinese stock market that day and led to a small rebound in the crypto market.
Global liquidity easing cycle : The liquidity easing in major economies such as the United States and China has a positive impact on risky assets such as cryptocurrencies. Gold continues to rise due to geopolitical factors, and BTC, as "digital gold", has a certain correlation with gold performance. BTC is expected to perform well in the future.
BTC's chip exchange and technical adjustment : Below $60,000, BTC long and short sides have fully exchanged chips, and the increased liquidity has provided support for the market. As time goes by, the market's callback is smaller, and the possibility of further rise increases.
ETF flow changes and capital repatriation : The slowdown in BTC ETF inflows shows that capital flows have fluctuated to a certain extent, but the overall market sentiment remains positive. The short-term selling pressure has been completed, and funds have repatriated to BTC, indicating that the long-term trend is still optimistic.
Options Market and Institutional Behavior in the Current Context
The current options market provides a wealth of investment opportunities for institutional investors and individuals against the backdrop of loose liquidity, global economic stimulus, and increasing macroeconomic uncertainty. Short-term volatility is low, but long-term volatility is expected to rise, making the options market an important hedging and yield optimization tool. This is because institutional investors prefer to express bullish or risk-hedging views through the options market, and the approval of the US BTC ETF options has enabled more investors to participate in volatility trading, further promoting the development of the options market.
According to the options market, the option expiration date on September 27 may bring greater volatility, and market bulls may use derivatives to push up prices. By November, as the US election approaches, market concerns about geopolitical and economic uncertainties have led to a significant increase in volatility expectations. This provides trading opportunities in the options market for risk-averse funds. Institutional investors may enter the market in advance and hedge through options.
Investment directions to watch
The difference between BTC and ETH valuation systems provides differentiated investment opportunities in the market
The difference in the valuation system between BTC and ETH provides different investment strategies and opportunities in the options market. BTC is regarded as "digital gold" and its valuation depends more on the macroeconomics and global liquidity environment. Therefore, BTC-related strategies in the options market are more based on the fluctuations of macro factors, and investors can use options for long-term risk hedging. ETH is closer to "digital crude oil" and its valuation depends on on-chain activities and supply and demand. Therefore, against the background of declining on-chain activity of ETH, investors can hedge the risk of its fundamental decline by selling ETH options or constructing put options. Different valuation systems make the options strategies of BTC and ETH have different focuses. The long-term trend of BTC remains optimistic and is suitable for call option strategies; while the short-term volatility of ETH is large, which is suitable for medium- and short-term volatility trading.
The options market provides an important tool for risk-averse funds
The options market provides an important hedging tool for funds that want to avoid risks from major events such as the election. As the US election approaches, volatility expectations in the options market are rising, especially in November, which is significantly higher than the average. This provides investors with an opportunity to manage risks in advance through options. Investors can lock in future gains by buying call options, or hedge against potential market fluctuations by buying put options. The use of this nonlinear tool has greatly increased the flexibility of funds.
Application of collar option strategy in long market
The collar option strategy provided by Matrixport provides investors with stable financing and risk hedging opportunities in the current bull market. For example, after investors pledge BTC or ETH, they sell call options and buy put options to form a "collar". This can protect against downside risks while offsetting part of the financing costs through the proceeds from selling call options.
This strategy is particularly suitable for miners and investors who hold BTC for a long time, helping them obtain financing without selling BTC. Unlike traditional pledge lending, the collar strategy does not require additional margin, and can achieve a higher loan-to-value ratio (LTV) of up to 80%, and the financing rate can be as low as 0%, effectively reducing financing costs and increasing funding flexibility.
The collar option strategy can ensure the hedging of downside risks and lock in profits when the upside space is limited by selling call options and buying put options. Matrixport has been committed to developing financial products and solutions that combine creativity and cost-effectiveness. The launch of innovative products such as the collar option strategy provides a more flexible and safer option for financing needs in the cryptocurrency market.
For more exciting content, please check out the YouTube content replay: https://youtube.com/live/jphaj5e7SEM?feature=share
About Matrixport Weekly Market Insights
【Matrixport Weekly Market Insights】is a new interactive knowledge sharing column launched by Matrixport, which is broadcast live on the official YouTube channel of Matrixport every week . This column will regularly invite industry product leaders, top analysts and KOLs to discuss investment logic under different market conditions, share investment experiences, and help users realize asset appreciation.
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Disclaimer: The above content does not constitute investment advice, an offer to sell, or a solicitation of an offer to buy to residents of the Hong Kong Special Administrative Region, the United States, Singapore, and other countries or regions where such offers or solicitations may be prohibited by law. Digital asset trading may be extremely risky and volatile. Investment decisions should be made after careful consideration of personal circumstances and consultation with financial professionals. Matrixport is not responsible for any investment decisions based on the information provided in this content.
