Monday Alpha #45

Please note that Premia does not provide investment advice, and nothing herein should be construed as such. Anyone considering trading or holding derivatives or crypto assets should be aware that the risk of loss can be very high, and it is upon each individual to seek advice from an appropriate professional advisor.

TL;DR: Institutionalization

BTC ATM IV

• 1W: 37.55%

• 1M: 41.81%

• 3M: 45.17%

• 6M: 47.39%

• Index Price: $104,550

• DVOL: 42.65

ETH ATM IV

• 1W: 66.55%

• 1M: 65.25%

• 3M: 65.98%

• 6M: 66.28%

• Index Price: $2,558

• DVOL: 69.64

Note: ETH front-end is still way lifted

Marty's Thoughts / Recap

One thing is for certain. BTC vols are dead, and continue dying further. Price up, vol down, as it should be.

BTC has gone full institutional right in front of our eyes. ETF inflows, basis dead, and vols hammered. We warned people of this all throughout last year, and the prophecy has been fulfilled. This isn’t anything new, but to say price up vol up is just a meme. Sure, it can have its spikes where options sellers get pinched, but the regime is price up vol down.

Now, lets make another prediction. ETH vols continue to swim down. We had some irregular movements the past few weeks, ETH front-end is even still elevated… let’s change that. We are playing the expectation that front-end continues to dip and eventually fall in line. As for ETH price we are still waiting… and waiting some more for the SEC to approve staking on the ETFs. I feel like news drops like this will provide short term price relief, not sure any longer on the future of ETH. Just because it’s a tradable product, doesn’t mean price continues to go up forever. Too much politics, competitors, small institutional appetite so far… Time will tell.

If you listened to any of my streams the last 1-2 weeks I’ve sounded like a broken record. Even with the latest pumps, only BTC/HYPE/MONERO are above their yearly open. Go look, go do some chart hunting, maybe there are a few others… but mostly everything is under their yearly open, even with the latest rips in the markets. This isnt great, overall, there isnt any strength or continuation into summer. So, where does that leave us?

Even though we saw some pumping in the beginning of May, maybe it is as it’s always been, the portfolio managers are headed to the Hamptons and it was time to sell in May and go away, just the end of May this time. Seasonality in markets is a thing, and I wouldn’t be surprised to see a chop summer, the it’s so over candle, followed by continuation into Q4 with the famous Santa Rally.

I don’t want to be that guy, but sit down… let’s talk about it. It is a bull run, but just for BTC. BTC is up YTD unlike others, BTC ran $35,000, a solid 50% in 45 days… but let’s look at the other side of it. Degens are getting liquidated on 1 Billion dollar notional positions, Meme coin launchpad sites revenue is slumping, and people you know are asking about crypto and how to get in…

Word for word this is what I wrote a buddy after he was asking questions on how to venture deep into crypto outside of his IBIT position…

“Crypto is all a scam and a cash grab. Besides Bitcoin… just know that going into it… it’s a casino. And you’re playing against the house. Most of them will go to 0 and BTC will survive.”

Just let that sink in…

Majority of folks portfolios are at All Time Lows, memes and alts are WAY under yearly open — we are talking 20-50% down YTD…

Here is some hopium. Mostly when I write a bearish blog, it’s the local bottom.

Disclaimer: I bot some PS, none of this is financial advice, I’m just hedging a good run. Toast to all the pimps that performed well this year, make sure to take some money off the table and enjoy some summer with your family or friends, it’s winter here in Brasil… but you know what I mean. It’s Hell De Janeiro, there is no season change, it’s always 25c+… For all the burgers that means warm, get the flippy floppies and hit the beach.

Chart Dump

6 months view of ATM IV. First chart shows all 1w, 1m, 3m, 6m… but the 2nd chart that is only 6m shows the prophecy. Vol is meant to be ____. I’m thinking of a 4 letter world… you can probably figure it out if you have been a long term reader. With only short term spikes, the trend is down, and will continue to be down. As it should be.

Crypto 2-week Returns

This newsletter is WAY different than the one 2 weeks ago. 2 weeks ago we have ALL GREEN, winner winner chicken dinner. This week we have 80% red.. and red… by a lot. 10-20% dips. Is every dip a gift? In BTC, yes, but others not so much. Careful where you put your cash, not everything goes up forever.

Crypto 1-month Sector Performance

Biggest winner DEFI, biggest loser is L2 basket. These charts and time frames are changeable and interactive on Velo site. You can even see which coins are made up into each basket.

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

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

Wrap-up

Last newsletter we covered basis, as it was on the rise. But, this market moves quick… Today basis is in free fall, hammered. BTC 3mo annualized is 6.5%, not nearly as good as it was at 10%+… Basis down, vols down. summer upon us… You should probably hold a spot bag, have some cash ready, and go enjoy your summer.

If there is any Alpha this Monday, it’s that.

As we look into 2025, Premia V4 aka Kyan will be launching. With portfolio margin and perps, it will be a great place to check out, trade, and compete in future competitions for rewards. Majority of my 2nd quarter will be working with Mr. Weka writing educational content including more long form, advanced topics, and how-to tutorials. We may even do some videos as well for all to learn easily. If there is something you want to see us write about and put in there, please reach out. For now, if you are interested in learning the basics of derivatives, please check out current edition of the academy here academy.premia.blue.

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Recap:

• Basis Flopped

• BTC Vols are dead and dying

• Marty Picked up some PS, NFA

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