Friday December 4, 2020
Just as the Koreans were celebrating the delay in virtual asset capital gains tax implementation, Americans were caught off guard with Coinbase dishing out 1099-Ks (reports typically issued by card payment companies on gross transactions for voluntary tax compliance) leading many to erroneously think that they had tax bills due to Uncle Sam. Coinbase subsequently issued a statement clarifying that was not the case and has since stopped issuing them allowing $BTC to bounce off the -15% dip fuelled by panicked American investors. We subsequently tested $20K ATHs and this move, tinkering on the border of unchartered territory, has triggered a bonanza for interest and indicators of more to come.
Volatility has exploded, taking Implied Volatility (IV) back up into the 70s with the premium collectors moving their wall up to $40K. Just last week, 20.1K $BTC were loaded only whiskers above $20K. Consensus is inching closer by the day in thinking that $20K too, will be merely a pitstop for this freight train building steam.
Paul Tudor Jones has come through publicizing his deepening conviction regarding this asset class and the disproportionately small size of the industry compounding the tremendous upside to come.
Guggenheim was the latest to announce the deployment of capital into Bitcoin for the Guggenheim Macro Opportunities Fund up to 10% of NAV into GBTC and right behind the coattails of SGX’s push to own the crypto indices, S&P Dow Jones Indices wants in too.
And with the bulls forming a stampede, the perpetual funding rates popped into the stratosphere.
Bitmex $BTC perpetual funding rate:
Per annum, it popped 9x to 97% and then some. This forced the cash-carry trades to be liquidated i.e. sell spot cover future short — subsequently leaning into the price as per Jake Choi, vice president of Investment & Hedging solutions at TDX Strategies.
As any OG in the space will attest, this time around- as cliche as it sounds- it genuinely feels different vis-a-vis the tulip craze of a market that took us up to $20K back at the end…
