Latest Developments in the Crypto Market
Bitcoin’s Recent Surge
Bitcoin recently experienced a significant rise, surpassing the $61,000 mark early on Tuesday. This surge can be attributed to the impressive inflow of funds into U.S.-based spot Exchange Traded Funds (ETFs), which recorded their second-highest inflow of the month, amounting to over $61 million. This is particularly noteworthy as it follows a substantial inflow of $192 million noted on August 8. According to data from SoSoValue, BlackRock’s IBIT led the charge with $92 million in net inflows, highlighting strong institutional interest in Bitcoin. In contrast, Bitwise’s BITB witnessed $25 million in outflows, indicating a mixed sentiment among investors.
Additionally, Japan’s Metaplanet made headlines by completing a Bitcoin purchase worth $3.4 million, further increasing its holdings to a total of 360.368 BTC. As of the latest updates, Bitcoin is valued at just below $60,800, representing a 4.6% increase within the last 24 hours. This performance has allowed Bitcoin to outperform the broader crypto market, which rose by approximately 4%, as measured by the CoinDesk 20 Index.
Impact of U.S. Elections on Bitcoin Options
Amidst this bullish market sentiment, traders have been particularly active in the Bitcoin options market, speculating on how the upcoming U.S. elections might influence the digital assets industry. This speculation has led to millions being locked up in Bitcoin options tied to the election events. The election expiry options have been trading on Deribit for about a month, and current data indicates that the notional open interest—essentially the dollar value of active options contracts—stands at an impressive $345.83 million, according to Amberdata.
Of this amount, call options, which provide an unlimited upside potential at the risk of limited loss, constitute 67% of the total open interest. In contrast, put options, which offer a limited payoff potential, account for the remaining shares, resulting in a put-call ratio of less than 0.50. This suggests that traders are significantly more bullish, with twice as many calls open compared to puts, reflecting optimistic expectations regarding the election outcomes and their potential impact on Bitcoin’s price.
State Street’s Strategic Move Towards Crypto Custody
In another significant development, State Street, one of the world’s largest financial institutions with $44.3 trillion in assets under management, has announced a partnership with digital asset custodian Taurus. This collaboration aims to enhance their tokenization efforts and indicates a strategic move towards expanding their services to include crypto custody in the future. State Street’s leadership has been vocal about the necessity to reform the existing accounting standards under SAB 121. These regulations currently mandate that banks wishing to hold cryptocurrencies must maintain a burdensome amount of capital to mitigate associated risks, which can be prohibitive for many financial institutions.
Donna Milrod, the chief product officer and head of Digital Asset Solutions at State Street, emphasized the institution’s commitment to tokenization as a starting point. However, she also indicated that this is just the beginning. “While we’re starting with tokenization, that’s not where we’re ending. As soon as the U.S. regulations help us out, we will be providing digital custody services as well,” she stated in a recent interview. This move not only showcases State Street’s ambition to be at the forefront of digital asset management but also reflects a broader trend among traditional financial institutions to adapt to the evolving landscape of cryptocurrencies.
Chart of the Day
– Omkar Godbole