BTC

ETH

S&P Futures 500

$70,864.02

$3,808.08

$5,365.75

(+0.01%)

 (-1.32%)

(-0.04%)

Note: All percentages shown above are referenced to the previous business work day's 09:00 (GMT+8)


GM Treehouser 🌳

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Our Daily View

What We Are Covering Today

  • The US governance initiates investigations into Microsoft and Nvidia over antitrust regulations; GameStop shares surged again following "Roaring Kitty’s" return to live streaming (More in Macro & TradFi)
  • Leading metaverse player Sandbox raises $20M at $1B valuation cap; Robinhood buys Bitstamp for $200M cash (More in DeFi & CeFi)
  • Solana launched almost half a million new tokens in May; Bitcoin whales buying appetite increases (More in On-Chain)
  • Bitcoin's IV declines due to lack of catalysts; Skew drops amid regulatory concerns (More in Crypto Derivatives)
  • BTC and ETH declined after a brief bullish surge (More in Crypto Technical Analysis (More in Crypto Technical Analysis)

Macro & TradFi

The US is initiating antitrust investigations into Microsoft Corp. and Nvidia Corp. regarding their dominance in the emerging field of artificial intelligence. Microsoft has invested over $13 billion in a partnership with OpenAI, while Nvidia, the most valuable chipmaker, has been accused of selectively allocating its chips to customers. The Federal Trade Commission will investigate Microsoft's ties with OpenAI, while the Justice Department will probe Nvidia's dominance in AI chips. The FTC is also looking into Microsoft's deal with Inflection AI. The investigation aims to address concerns over market dominance and unfair practices in the rapidly evolving AI industry. Both Microsoft and Nvidia have declined to comment on the matter. The agreement to divide responsibility between the FTC and the Justice Department was reached after more than six months of negotiations. The FTC and the Justice Department jointly enforce antitrust laws in the US and work together to coordinate investigations.

Moving on, GameStop shares surged again on Thursday as meme stock leader Keith Gill, known as "Roaring Kitty," announced a live stream on YouTube, his first in nearly four years. Scheduled for noon on Friday, traders speculated that the stream would discuss his significant GameStop stake, sparking bullish sentiment. GameStop's stock price rose over 47%, closing at $46.55, with trading briefly halted due to volatility. The stock has more than doubled in value so far this week. Gill, also known as DeepF------Value on Reddit, recently resurfaced online, posting screenshots of his E-trade portfolio holding five million GameStop shares and 120,000 call options, worth at least $200 million. His call options, if exercised, could increase his stake to 17 million shares, potentially surpassing $1 billion in value if the stock reaches previous highs. Gill had paused updates after reports that E-Trade was considering removing him over concerns of market manipulation. Gill's involvement in the GameStop frenzy in 2021 led to congressional hearings on retail trading practices. However, media sources have not independently verified Gill's holdings. 

Lastly, on Thursday, U.S. stocks saw minimal movement as investors awaited Friday's May jobs report, with the Dow Jones Industrial Average ticking up 0.2%, while the S&P 500 slipped 0.1% and the Nasdaq Composite shed 0.2%. Nvidia faced a decline amidst regulatory concerns, as federal regulators plan to investigate its dominance in the AI space, causing its shares to fall by 1.1%. In European markets, bond yields rose after the European Central Bank cut interest rates, mirroring a similar move by the Bank of Canada. Notable performances included Salesforce leading the Dow with a 2.7% rise, while Uber climbed 4.7% following an optimistic forecast by Lyft. Illumina added 7.4% after approving the spin-off of Grail, and Lululemon athletica gained 4.8% after reporting strong earnings. However, high-flying utilities stocks like Vistra and NRG Energy slumped, alongside semiconductor stocks such as Micron and Marvell Technology.

DeFi & CeFi

  • Sandbox secured $20M in funding at $1B valuation cap
  • Robinhood acquires Bitstamp for $200M cash
  • Medical device maker Semler Scientific buys $17 Million more BTC
  • Franklin Templeton in exploring a new altcoin-focused fund
  • Binance reinstates crypto direct purchases via Mastercard
  • FTX creditors object to bankruptcy reorganization plan

The Sandbox, a leading user-generated content metaverse platform, secured $20 million in funding at a $1 billion valuation cap. The investment, led by Kingsway Capital and Animoca Brands, with participation from LG Tech Ventures and True Global Ventures, underscores the platform's potential in the open metaverse. With over 1,000 user-generated experiences and 5.7 million members, The Sandbox aims to expand its creator economy and enhance its decentralized virtual world. The funding will support improvements to its Game Maker and VoxEdit 3D editor tools, introduce new social interactions for avatars, and launch a multiplayer rules system and a mobile version of the metaverse. Over the past year, The Sandbox has attracted over 330,000 unique creators and sold over 60,000 avatar NFTs. With strategic partnerships with global brands and a growing ecosystem, The Sandbox aim to shape the future of the metaverse as a collaborative, fair, and open platform for all.

In other news, Robinhood has announced its acquisition of U.K.-based crypto exchange Bitstamp for $200 million in cash. Founded in 2011, Bitstamp is one of the largest crypto exchanges in Europe, offering spot trading of over 85 cryptocurrencies and other crypto products. The acquisition, expected to close in the first half of 2025, aims to expand Robinhood's global crypto presence and attract institutional clients. Bitstamp's platform, expertise, and regulatory compliance, with over 50 licenses and registrations globally, will enhance Robinhood's trading experience. The deal signals Robinhood's commitment to international expansion and could intensify competition in the crypto exchange market, challenging platforms like Coinbase.

On-Chain

Based on an analysis by The Block, Solana experienced a significant surge in token creation, with 455,000 new tokens launched on its blockchain in May, a record high compared to other platforms. This influx was primarily driven by the ease of creating tokens on Solana, facilitated by platforms like Pump.fun, which allow users to create tokens within seconds. As of now, Solana has launched a total of 1.1 million tokens in 2024, leveraging its high throughput and low transaction fees to attract creators and investors seeking to capitalize on the rapid creation and potential viral appeal of new tokens.

Another analysis from CryptoQuant shows a notable resurgence in Bitcoin buying activity among whales, signaling a significant increase in their holdings, which have now reached new historical highs. This uptick is marked by the largest 30-day percentage increase in whale Bitcoin balance observed in the past two months, illustrated by the stark rise in the chart’s blue area and the upward trend in the purple 30-day change-EMA line. Such aggressive accumulation by whales suggests they perceive the current market prices as favorable for purchase, potentially indicating the market’s approach towards a new peak. 

Derivatives

  • Funding rates remained positive for BTC and ETH.
  • Deribit Implied Volatility Index (DVOL) for BTC and ETH fell to 51.82% and 62.71%.
  • The 30-day 25-delta skew (C-P) for BTC and ETH increased to 2.41% and 4.43%, respectively.
  • The futures market witnessed $104.80M in liquidations, with shorts representing 82.84%.

Top 3 USDT Perpetual Funding Rate Arbitrage Opportunities

Net Annualized APR

Perp (USDT pair)

Long on

Short On

48.77%

BNB

Binance

OKX

44.45%

BNB

Bybit

OKX

40.55%

SOL

Bybit

dYdX

Notes:

1) Pairs observed include BTC, ETH, SOL, BNB, XRP, LTC, and DOGE vs. USDT perps. 

2) CEXs observed include Binance, Bybit, OKX & dYdX.

3) Lookback period is 24 hours.


Bitcoin's 7-day ATM IV decreased to 44.51%, and the 30-day ATM IV dropped to 50.44%, likely due to a lack of anticipated catalysts in the next 30 days. Historically, IV tends to decline when no significant events are expected. This trend suggests that market participants anticipate lower price fluctuations in the near term, reflecting a period of reduced uncertainty and trading activity.

BTC's term structure remains in contango, with a notable decrease in IV across the curve, indicating that option investors anticipate lower volatility in BTC in the near term.

Additionally, BTC's 25-delta skews have decreased over the past day, with the 7-day skews falling to 1.63% and the 30-day skews to 2.41%. This reduction in bullish sentiment may be attributed to a new U.S. law granting the president extensive powers to block access to digital assets. The market's reaction suggests increased apprehension about regulatory actions, which could dampen investor optimism and impact future price movements.

Lastly, @Paradigm’s option flows from yesterday emphasized strategies consisting of call and put spreads. Key BTC trades encompassed the procurement of 150x 30-Aug-24 95k Calls, 100x 27-Sep-24 60k Puts, and a singular transaction that involved the purchase of 100x 27-Dec-24 150k Calls. In the ETH space, significant trades included the acquisition of 1000x 27-Dec-24 4200 Straddles and 1000x 7-Jun-24 4100 Calls, alongside a notable sale of 1000x 8-Jun-24 3825 Puts.

Crypto Technical Analysis

Moving on to technical analysis, BTC is currently set to test the resistance level of $71.1K, retracing to $70.7K after touching $71.2K yesterday. A decisive break above the $71K resistance level could trigger a significant bullish breakout, potentially leading to a sustained price advance with the next resistance level at $72.5K, a 2.5% increase. The RSI reflects this price movement as it declined to 57.44 after approaching overbought levels. Considering the overhead resistance at $71K, a potential price retracement could find support near $67.1K.

ETH bears took control after a brief bullish surge. This is reflected by a price drop to $3.8K following a solitary green candle on the price chart. The single green candle suggests a temporary spike in buying pressure that was ultimately overpowered by selling dominance. A further decline of ETH could see it tested at the support level of $3.7K, a 2.6% decline. Should bulls take over the ETH market, the resistance level presents itself at $3.9K, a 2.6% increase at current price levels.

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