July 14, 2023

Desk Commentary - Reprx

Walking into the midweek session, crypto markets seemed set for further muted, if supported, meandering price action provided inflation figures continued to underwhelm; PPI printed at half of expectations. Meanwhile, despite ostensibly solid support at $30,000, bitcoin found itself pinned by presumptive government selling of another block of Silk Road tokens.

Yet Thursday’s most enthralling catalyst was neither macroeconomic data nor fears of heavy supply. Instead, a long-awaited judicial ruling on the status of Ripple jolted markets sharply higher just ahead of midday as players leaped into action and bid for a range of digital assets long plagued by the pall of potential ‘security’ branding.

Major exchange re-listings saw XRP lurch upwards by nearly 100% in a lurid fashion from ~$0.50 to ~$1.00. Meanwhile, ETH pushed once more above $2,000 as robust demand for optionality materialized via clips of meaty September and December options, suggesting that the incessant dealer derivation of longer vega on higher spot has come to an end, at least for now. Clips of $1800/$2200 and $1900/$2100 strangles for Q3 ’23 and Q4 ’23 quarterly expiries were paid aggressively, implying a rush to flatten short vega risk. At the same time, on the OTC side, our franchise saw fresh appetite for upside in beleaguered alts such as SOL, which witnessed gains of over 20% in a gappy, disjointed tape.

Other notable flows included BTC call strike roll downs by sharp directional players and buyers of ETH gamma ahead of the 40% level from cross-over names. Both were definitively validated by 5+% moves in majors over the afternoon before profit-taking saw BTC revisit ~$31,000, ETH sag towards $1,975, and XRP plumb $0.80.

More cyclically, the trend of persistently decreasing block volume in ETH compared to BTC could be stabilizing, particularly as ETH/BTC again bounced in a double bottom ahead of 0.0600. The saga of underperforming ETH volatility may also be facing a reset, particularly if the week's retest of $2,000 turns out to be something more than a representative example of another failed breakout. With skews remaining firmly in favor of calls, it is not unreasonable to expect at the money vols to perform if prices successfully pierce year-to-date highs. As the overall narrative impetus builds on the back of ETF filings, new venue launches, favorable regulatory resolution, and a potential macro tailwind of taming inflation, an apathetic summer for implied volatility could face more scorching conditions ahead.

Written By

Gordan Grant

Managing Director, Trading and Sales


Genesis Global Trading, Inc. and its global affiliates (collectively, “Genesis”) do not provide legal, compliance, tax or accounting advice. Genesis is a principal trading firm; it is not and does not act as a fiduciary or adviser, or in any similar capacity, in providing this material, which cannot be relied upon as investment, financial, legal, tax, regulatory, or any other type of advice. The information contained herein has not been prepared or tailored to address, and may not be suitable or appropriate for the particular financial needs, circumstances, or requirements of any person, and it should not be the basis for making any investment or transaction decision. THE INFORMATION IS NEITHER A RECOMMENDATION TO ENGAGE IN ANY TRANSACTION NOR RESEARCH MATERIAL.

This material contained herein is confidential and may not be distributed in whole or in part to anyone other than the intended recipients. Unauthorized reproduction or distribution of all or any of this material or the information contained herein is strictly prohibited. These materials are incomplete without reference to, and should be viewed solely in conjunction with, the terms and disclosures set forth on the Genesis website, which are deemed incorporated herein.

The information provided in this communication does not constitute investment advice, financial advice, trading advice, or other advice. If any person elects to enter into transactions with Genesis, whether as a result of this material or otherwise, Genesis will enter into such transactions as principal only and will act solely in its own best interests, which may be adverse to your interests. Therefore, you are advised to make your own assessment of whether a Genesis service that you are considering is suitable for you and ensure that you have the necessary experience and knowledge to understand the risks involved in relation to those particular services, transactions or investments. Prior to entering into any transaction, you should determine, without reliance upon us or our affiliates, the economic risks and merits (and independently determine that you are able to assume these risks) as well as the legal, tax and accounting characterizations and consequences. In this regard, by accepting this material, you acknowledge that (a) we are not in the business of providing (and you are not relying on us for) legal, tax or accounting advice, (b) there may be legal, tax or accounting risks associated with any transaction, (c) you should receive (and rely on) separate and qualified legal, tax and accounting advice and (d) you should apprise senior management in your organization as to such legal, tax and accounting advice and our disclaimer as to these matters. By accepting receipt of this material, the recipient will be deemed to represent that they possess, either individually or through their advisers, sufficient investment expertise to understand the risks involved in any transactions or services discussed herein and that they have not relied in whole or in part on any of the information provided by Genesis in making such determination.

The trading of digital currency as herein described is an inherently risky activity. Digital currency does not benefit from the protections afforded by the Securities Investor Protection Corporation. A counterparty’s ability to enter into derivatives with Genesis depends on satisfying a number of regulatory requirements imposed on derivatives under the Dodd–Frank Wall Street Reform and Consumer Protection Act and applicable law.

Any prices or levels contained herein are preliminary and indicative only and do not represent bids or offers. These indications are provided solely for your information and consideration, are subject to change at any time without notice and are not intended as an offer to sell or a solicitation to purchase any financial instrument. Nothing contained herein shall constitute any representation or warranty as to future performance of any financial instrument, credit, currency rate or other market or economic measure. In preparing this material, we have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources or which was otherwise reviewed by us. Genesis does not make any representations or warranties, express or implied, as to the accuracy or completeness of the information provided herein. Any estimates included herein constitute our judgment as of the date hereof, are subject to change, may or may not be realized, and are not a complete analysis of every material fact. We and/or our affiliates may make a market in these instruments for our customers and for our own account. Accordingly, Genesis may have a position in any such instrument at any time.

Genesis and Genesis Trading are marketing names for certain businesses of Genesis Global Trading, Inc. and its global affiliates and if and as used herein may include as applicable employees or officers of any or all of such entities irrespective of the marketing name used. Products and services may not be available to all counterparties or in all jurisdictions. Securities and digital assets are not deposits or other obligations of any commercial bank, are not guaranteed by any commercial bank and are not insured by the Federal Deposit Insurance Corporation. GGC International Limited is incorporated in the British Virgin Islands (“BVI”). Genesis Global Trading, Inc, a Delaware corporation, has been granted a Virtual Currency License by the New York State Department of Financial Services and is registered with the U.S. Securities and Exchange Commission as a broker dealer. Genesis Asia Pacific Pte. Ltd. Is a private limited company organized under the laws of Singapore. Genesis Global Capital, LLC is a limited liability company organized under the laws of Delaware. Genesis Custody Limited is registered as a cryptoasset business with the UK Financial Conduct Authority.

Market Insights

Sign up for crypto market analysis from the Genesis team.

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Market reviews subscription sculpture