During the official YouTube livestream at 8 PM on Oct 15th, Daniel Yu, Head of Asset Management at Matrixport, conducted an in-depth analysis of last week’s (October 10th-14th) BTC and ETH market performance. He discussed the impact of the global political environment on the crypto market and the practical insights on using accumulator options. Daniel thoroughly analyzed the reasons behind the market recovery, particularly the introduction of BTC ETF options and the influence of global economic and political events, providing multiple strategies for investors to cope with market volatility. He also introduced accumulator options to help investors gradually accumulate positions at discounted prices during market fluctuations.
Key Takeaways from the Livestream
Between October 10th and 14th: BTC and ETH significantly rebounded driven by China’s economic stimulus policies and improvements in the global economic environment. BTC prices quickly surged from around $60,000 to $64,500, and further climbed past $66,000, with an increase of 7.5%-10%. Although the listing time is yet to be determined, the anticipated launch of BTC ETF options is expected to reduce market volatility and attract institutional funds. Amid global political uncertainties, especially the US elections, the demand for hedging in cryptocurrencies has increased, further highlighting BTC’s hedging properties. Additionally, ETH showcases long-term investment opportunities due to its potential in Layer 2 expansion and decentralized finance (DeFi) applications.
Analysis of Market Volatility Causes
Market Recovery
Recently, BTC and ETH have significantly rebounded, mainly due to China’s economic stimulus policies and improvements in the global economic environment. Over the past week, BTC prices quickly surged from around $60,000 to $64,500, and further climbed past $66,000, with an increase of 7.5%-10%. The price approaches historical highs.
Range-bound and Market Consensus
Since April this year, the market has been range-bound, with the price of BTC not breaking below the lower limit, indicating strong investor consensus. However, further market increases still require external funds, and the current fund volume is insufficient to maintain long-term single-sided growth.
Policy Boost
China’s new fiscal policies have played a crucial role in market recovery. Although the A-share market lacks rebound momentum, the crypto market has been driven by partial capital inflows, with US stock market gains further enhancing the demand for risk assets. BTC’s hedging properties as “digital gold” have been further strengthened, becoming a focal point for the market.
Global Political Impact
The US presidential election and various global political events have heightened market uncertainties, significantly raising the implied volatility of November options. The decentralization and 24/7 trading of the crypto market make it an important tool for investors to hedge global risks. Investors use BTC and other crypto assets to hedge political risks, especially during elections, further highlighting BTC’s hedging value.
Options Market and Institutional Behavior in the Current Environment
Impact of BTC ETF Options Launch
With the US SEC approving the listing and trading of BTC ETF options in September, the expected launch of BTC ETF options has been a key factor driving recent price increases, although the listing time is yet to be determined. It is expected that the increased liquidity of ETFs will attract more institutional investors to the market. The expansion of the options market provides investors with more hedging tools and risk management strategies, further boosting market confidence.
Reduced Market Volatility
On the other hand, the introduction of ETF options is expected to reduce BTC market volatility. Experience from the traditional financial market shows that options products usually stabilize market volatility. Institutional investors adopt high-selling and low-buying strategies instead of leveraged trading. With the launch of ETF options, market liquidity and stability will be further enhanced, attracting long-term funds into the market.
Enhanced Global Liquidity
Driven by the options market, global BTC trading liquidity has significantly increased, especially BTC, which is less connected to the traditional financial system, benefiting from global liquidity expansion. The inflow of funds into BTC and other cryptocurrencies indicates an increasing tendency for investors to use cryptocurrencies as hedging tools, enhancing market stability.
Investment Directions to Consider
Bullish Long-term Potential for the ETH Market
Despite short-term price fluctuations, ETH’s long-term outlook remains widely bullish. ETH, as a crucial infrastructure for decentralized applications (DeFi) and financial innovation, is highly regarded for its Layer 2 expansion technology and decentralized finance applications. Many investors buy in large quantities at market lows and use them for staking, showing confidence in its long-term potential.
Differentiated Investment Opportunities in BTC and ETH Pricing Logic
BTC and ETH have different pricing logic: BTC relies more on its scarcity and close ties to global monetary policy, similar to digital gold; while ETH’s value depends on its on-chain active user numbers and application ecosystem, similar to copper or oil. Therefore, although both are crypto assets, their market performance and investment logic differ. Investors should choose investment strategies based on the characteristics of different assets.
Accumulator Options and Discounted Accumulation Strategy
The accumulator option (AQ) is a powerful investment tool in the current market environment. It allows investors to periodically purchase BTC and other crypto assets at a discounted price. Especially during market fluctuations or price drops, investors are able to gradually build positions at lower prices by setting the strike price.
Typical operations of accumulator options include weekly or monthly regular purchases of 1-3 BTC. If the spot price is lower than the strike price (usually 76%-89% of the spot price), investors can buy more assets at a discounted price. If the market price exceeds the knock-out price, the product terminates early, and investors profit from accumulated low-price positions.
Through accumulator options, investors can flexibly respond to market fluctuations in BTC and ETH and seize opportunities for discounted accumulation, thereby achieving stable returns during market recovery.
Conclusion
The meeting thoroughly discussed the reasons for BTC and ETH market volatility, the impact of options market expansion on market stability, and investment opportunities in the current market environment. The meeting pointed out that China’s fiscal policies and global political events such as the US elections are the main reasons for recent market fluctuations. The launch of BTC ETF options further boosted market liquidity and reduced market volatility. ETH, as the core of decentralized applications, still has enormous long-term investment potential.
Accumulator options provide investors with opportunities to gradually build positions at discounted prices during market fluctuations, making them suitable for the current highly-uncertain market environment. Investors can flexibly use accumulator options based on the different characteristics of BTC and ETH to invest, thereby achieving stable returns during market rebounds.
Check out the recording of our YouTube livestream for more details: https://youtube.com/live/Czl0LGpNzZk?feature=share
About Matrixport Weekly Market Insight
[Matrixport Weekly Market Insight] is an interactive knowledge-sharing column newly launched by Matrixport, and will be livestreamed each week on the Matrixport official YouTube Channel. We will invite industry-leading product managers, top analysts, and KOLs to discuss investment strategies under different market situations and share their investment experiences.
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Disclaimer: The above content is for informational purposes and reference only. The content does not constitute investment advice. Digital asset transactions can be precarious and volatile. Investment decisions should be made after carefully considering individual circumstances and consulting financial professionals. Matrixport is not responsible for any investment decisions based on the information provided in this content.
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