Chart of the Week: A Tale of Two Put-Call Ratios

The open interest put-call ratios of BTC and ETH options are telling diverging stories:
After forming yearly lows in early January, put-call ratios for both BTC and ETH trended up until February when their paths started to diverge, with BTC’s dropping and ETH’s continuing to rise. The ETH put-call ratio has stayed above BTC’s for the past one month, the longest period it has done so during the past year.

ETH has outperformed BTC by 11.7% over the last three months (ETH +17.1% vs BTC +5.4%), on the back of the alt-coin run up and anticipated ETH 2.0 upgrade catalyst. With further delays having been announced to the upgrade, the divergence in the put-call ratios trend could be indicating sentiment shift as investors look to increasingly hedge their ETH exposure.

Fund Flow Tracker

BTC and ETH balances held at exchanges continue their free fall as flows remain net negative (i.e. net outflow).
The past week saw 18.8K and 504.4K of net outflows for BTC and ETH respectively. While this could be interpreted as a bullish indicator, potentially implying strong investor inclination to hold, regulatory risk for exchanges may also be having an impact.

However, BTC balance held on OTC desks, after largely following the downtrend on the exchanges, saw a rebound after reaching a yearly low in mid-April.

Derivatives Pulse

BTC options ATM implied volatilities remain muted and near yearly lows.
Front-end implied volatility (one-month) currently stands at 55.5%, compared to 55.4% last week.

Implied volatilities for ETH are also muted and near yearly lows. Front-end implied volatility (one-month) for ETH currently stands at 60.5% compared to 59.3% last week.

BTC perpetual futures funding rates have flashed red (i.e. negative) during the past two weeks, although the overall regime remains in positive territory over the longer term.

Negative funding rates printed at a higher frequency during the past two weeks for ETH perpetual futures than for BTC, although the overall longer-term remains in positive territory as well.

Price Movements

Source: Crypto.com

Source: Crypto.com

News Highlights

• The Australian Prudential Regulation Authority (“APRA”), prudential regulator of the Australian financial services industry, outlined a policy roadmap for implementation of regulation for financial entities engaging in crypto-assets activities. It expects the framework to be effective in 2025.

• Australia is set to launch its first spot Bitcoin and Ethereum exchange traded funds. The products will be the first in Australia to invest directly in the underlying assets.

• The Sandbox seeks to raise US$400M, which would value the company at more than US$4B, according to Bloomberg citing people familiar with the matter.

• Commerzbank, one of the largest banking institutions in Germany, has applied for a cryptocurrency custody licence, the first time such a move has been made by a major bank in the country.

• Financial services provider Stripe will add support for payments in USDC stablecoin on the Polygon protocol for select Twitter creators.

• SkyBridge Capital reported to have raised US$7M for a new vehicle to invest in Bitcoin mining company Genesis Digital Assets.

Catalyst Calendar

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