SignalPlus Volatility Column (20240425): Zero Inflow for IBTC on the First Day, IV Hits a New Low Recently
Affected by the latest round of geopolitical news in the Middle East, Bitcoin fell more than 4% intraday, hitting a low of 63606 and forming a support level near 64000.
Source: TradingView
Due to the decline in Bitcoin's price, the world's largest Bitcoin spot ETF — BlackRock's IBIT ended its 71-day streak of continuous inflows, while Grayscale's GBTC saw another massive sell-off of up to $130M, significantly exceeding the total inflows of other ETFs.
Since the approval of ETFs, their daily net inflows have been regarded by many investors as a sentiment indicator for BTC. The fact that IBIT lost its market appeal in the past day might be seen as a short-term bearish signal. However, it's worth noting that the net inflows since the launch of ETFs have far exceeded market expectations, with total assets under management surpassing $20B in such a short time. A temporary slowdown in flows is understandable.
In other news, according to a report by U.Today, AdvisorHub recently cited two anonymous executives stating that banking giant Morgan Stanley might allow 15,000 brokers to offer Bitcoin ETFs to their clients. So far, the bank has only made these products available passively, meaning they haven't actively recommended Bitcoin ETF investments to clients. But as hinted in the report, this policy change (if not just a rumor) could significantly increase demand for BTC ETFs.
Source: Farside Investors
In the options market, IV levels plummeted again. BTC and ETH weekly options continued yesterday's selling pressure, with IV dropping around 8%. For ETH, trades concentrated around the 26 APR 24 3000–3200 strike prices accounted for nearly all of ETH's trading volume in the past day, while BTC saw selling in both ATM and Wing options.
Additionally, there was some bargain hunting for BTC May-end 70000–80000 call options. The selling of deeper OTM calls mainly came from customized strategies on block trading platforms, where selling May 110000 Calls was paired with buying equal amounts of June 110000 vs 160000 Call Spreads.
Source: Deribit (as of 25 APR 16:00 UTC+8)
Source: SignalPlus
Data Source: Deribit, ETH trading distribution and 26 APR 24 trades
Data Source: Deribit, BTC trading distribution and 26 APR 24 trades
Source: Deribit Block Trade
Source: Deribit Block Trade
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