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TL;DR: 2024 Wrap Up

BTC ATM IV

• 1W: 51.59%

• 1M: 56.73%

• 3M: 60.29%

• 6M: 61.87%

• Index Price: $103,976

• DVOL: 59.58

ETH ATM IV

• 1W: 69.57%

• 1M: 71.18%

• 3M: 72.13%

• 6M: 73.49%

• Index Price: $3,903

• DVOL: 74.42

Marty's Thoughts

2024 has been good to us overall, prices are up, institutions are here and the spotlight is on us. I’ve had some reply guys say I am bearish all year, that’s not the case. I am cautious as the market goes up 50% just as fast as it goes down 50%, overall Bitcoin is up on the year, but does anyone remember summer? We chopped between 70k to 50k all summer. When I put out a warning that funding is 1000%, or that vix is up 50%, this is not bearish overall in my long term view, this is just to notify others that maybe you need to rebalance your book in the short term. That being said, Bitcoin goes up forever against fiat, we spent all of 2023 writing about selling vol (bottomless 2023) and awaiting the comeback for 2024 with all its catalysts… Well, that worked out perfectly. 2024 catalysts popped off with vol coming back alongside the ETF wave. We are always in spot, and we make money when you cross the spread, so keep it up. I initially wanted to end with Marty’s Thoughts, but I realized that the people want the alpha first, so here it goes.

Saylor is on a one man boat. Sure there is some guppy miners swimming along side him, but no large institution has followed, even Microsoft declined the action to buy Bitcoin and put it on their balance sheet. We have yet to see SaylorMoon convert any large players, at least so far… I’m sure that changes in the future, but today isn’t that day. Saylor is up around $14 billion so far, but let’s put that into perspective… Microsoft makes around $60 billion a quarter.

Story time. I used to be a Bitcoin maxi in the sense that we are going to use BTC as the world’s reserve currency, that banks will transfer value with it, etc. I’ve since stepped back from that view and am just a “BTC is another asset class” maxi. We’ll have ups and downs in the short term, but once you zoom out, it goes up only against fiat forever. You don’t need to maintain it, you don’t have tenants, it doesn’t generate cash flow, but it will go up forever as there is a finite supply and people will continue to trade it and hold it. As for the USD being the world’s reserve currency forever in our lifetime… I am not so sure… But I will save that for another article.

As for 2025—what shall we look forward to? Galaxy research put out a post that BTC expected to break 150k first half of 2025, and MIGHT reach 185k in the 4th quarter… ETH to pass 5500… I’m not sure, I would probably say we chop more than anything. Take their price targets with a grain of salt as they have clients to make happy and products to sell. There was some Block Trade activity this week for a June far out expiry, mostly sold, but for every seller there is a buyer. We will cover it in the next section.

As for alts I am not sure, the rotations are getting faster and faster, and as we see in the monthly returns charts below… I am not sure anyone who claims they made money on alts this month is telling the truth. Besides some one off ones, they all got rinsed really bad. If you are a new reader, we only trade Bitcoin ETH and Market Make options. We rarely have a directional view, but we do hold spot and always happy to see it go up, as well as more market participants joining the space.

Looking forward I would assume more ETF products to come, more structured products, and staking for ETH ETFs. I’m probably the most bullish on more product offerings as a whole across the space, with a focus on Structured Products. Structured products are just a fancy way of saying exotic options… There are lots of variations, but simple ones include Principal Protected Notes and Barrier Notes. They may be a more complex product to some, but in TradFi, structured products are a large majority of options volume/OI, and they can give traders a better payoff while reducing overall risk. I recently saw Cega (structured products on Arbitrum, I have no affiliation nor tokens) get acquired and shutting down, but if any teams are working on this, I am more than happy to have a chat!

TL;DR: we probably make new highs, chop city, more product offerings coming to the space.

• To Join Greekslive Block Marketplace: t.me/GreeksLive

• Find Greekslive On Twitter: https://twitter.com/GreeksLive

Notable selling this week. March 150k, June 200 & 250k strikes sold in size. The others are multilegs playing on some small upside into the first weeks of the year, I would assume they were put on for a credit. The sold calls play against Galaxy’s price targets for 2025, let the battles begin.

BTC & ETH ATM Implied Volatility

I just wanted to highlight the years data of 1 Week and 6 Month ATM IV quickly. 6 month been very stable compared, front-end always spikes up and gets hammered down. The classic playbook of event comes, vols build, event passes, vols get crushed. You never time the pico top or pico bottom of le vols, this is something you can scale into and add to your strategies. Be sure to run some backtests.

BTC & ETH Implied Volatility Term Structures

ETH vols still trading significantly higher than BTC, around 10v higher. This is something to watch in 2025 if it flips. Also with the addition of options and more and more product offerings coming, these are all vol dampening situations.

Crypto 1 Month Returns

From top to bottom we have large, mid, and smol market caps 2 week returns. Last newsletter we mentioned “reset season”. Well there we have it, majors are fairly stable while everything else got rinsed besides some handful of alts in the green. The rotations are happening faster and faster, you are playing musical chairs but with money, do not get stuck holding the bag.

Total BTC & ETH ETF Flows and Returns

• BTC ETF Flows: $35.72b

• ETH ETF Flows: $2.69b

I’m surprised ETH ETF flows didn’t increase more into the end of the year to play a little catch up. It looks like basis got hammered from 20%ish to 10%. I would assume ETH total volume plays a little catch up in 2025 with at least 15% of the total BTC volumes.

CME Data Basis got crushed into end of year, lets see how the roll into the next set of contracts looks in the next few newsletters. When basis is 20%+ TradFi eats this up, flowing billions into a basis trade. Long spot with ETF shares, Short Dated Futures on CME, this is about the most risk free trade you can take and stay profitable. 20% is much more than the 5% they are getting in treasuries, this is very attractive.

• Charts from Velo Data: https://velodata.app/

• Twitter: https://twitter.com/VeloData?s=20

Wrap up

To wrap it up, just remember not every trade is 1020934% return in 12 minutes. I think we all have an overall unrealistic expectation of returns in crypto. 2025 it’s time to turn that around, manage your book, keep steady gains, and not blow up.

Weka and I at Premia (soon KYAN) will be redoing the academy to reflect the changes in V4, teaching users and readers how to use the platform and some simple plays like going delta neutral, using margin correctly, or putting on a funding play. With that, there will be more long form articles coming as well. I’ll include a SaylorMoon trade and how it works, Basis trading, funding arbitrage, and more.

Thank you to all the readers who make this newsletter possible, we are sitting about 4000+ email sign ups, and thousands of readers every 2 weeks. As for the Options Talk Show if you or someone you know wants to be a guest feel free to DM me, we are booking out March 2025 already.

Recap:

• Reset Season continuing

• SaylorMoon is a one man boat currently

• More product offerings in 2025

• Basis hammered

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