SignalPlus Volatility Column (20240513): Strong Start!

2024-05-14 10:25:03

Collection

In terms of digital currency, as the week begins, BTC started strong, briefly breaking above the 63,000 mark, with the front-end implied volatility significantly flattening and rising.

Last Friday, the U.S. macro data performed poorly, with the one-year inflation expectation for May rising from 3.2% to 3.5%. The University of Michigan Consumer Confidence Index showed weakness, dropping to 67.4, offsetting the positive impact of recent soft employment data on market risk sentiment. The yield on the U.S. ten-year Treasury bond briefly returned above 4.5%, while the two-year yield, which is more sensitive to interest rate policy, rose to 4.853%. Risk assets performed relatively steadily, with the three major U.S. stock indices showing mixed results; the Dow and S&P rose slightly by 0.32% and 0.16%, respectively, while the Nasdaq fell by 0.03%. This week, the market's focus will be on the CPI data released on Wednesday, which may become a key driver of mid-term price trends.

Source: Investing

In the cryptocurrency space, as the week began, BTC started strong, briefly breaking above the 63000 mark. The implied volatility on the front end significantly flattened and increased, with the 17 MAY forming a local IV peak under the uncertainty of the CPI. Investors are closely watching for signs of cooling in consumer prices, which would greatly support market bets on cryptocurrencies and other risk assets. On the other hand, a poor inflation report could trigger traders' concerns about economic overload and potentially lead to a decline in cryptocurrency prices.

Source: TradingView

Additionally, there are two noteworthy points. According to a report by Cryptonews, Japan's investment consulting firm Metaplanet has explicitly stated in its announcement that the company has a "Bitcoin-first, Bitcoin-only" strategy and offers financial solutions such as long-term yen lending and regular stock issuance. They added that this is to continuously accumulate more Bitcoin rather than hold onto the increasingly weak yen.

The other matter concerns the U.S. elections. Recently, a series of measures by the Biden administration to strengthen cryptocurrency regulation have sparked dissatisfaction among investors. Billionaire Mark Cuban, a supporter of President Biden, has recently changed his stance, arguing that under Biden's leadership, SEC Chairman Gary Gensler has failed to protect investors, making it "almost impossible for legitimate cryptocurrency companies to operate." He warned that if the opposition to Bitcoin and cryptocurrencies continues, Republican presidential candidate Donald Trump is likely to win the 2024 presidential election. In fact, Trump's recent attitude towards Bitcoin has also undergone a 180-degree shift; in 2019, he publicly stated that he did not like Bitcoin, but recently at a Mar-a-Lago event, he generously told attendees, "If you support cryptocurrency, you better vote for Trump," which caused a stir in the community. This statement was described by U.S. media Politico as "a new weapon against Biden," and the development of cryptocurrency policy will play an increasingly important role in the upcoming election.