fdic

$1.12B in Bitcoin options expire this week, and bulls appear to be at a disadvantage

Commodities rallied as the United States Treasury struggled with the banking crisis, but Bitcoin bulls also overplayed their hand in this week’s options expiry.

Bitcoin’s (BTC) 43% rally between March 10 and March 20 surprised options traders and this is proven by the minimal14% of the $1.12 billion open interest set to expire on April 7 being placed at $28,000 and higher. 

The positive price movement can be partially attributed to an increase in commodity demand, as investors perceive risks in the central bank’s emergency funding programs, as injecting liquidity causes inflationary upward pressure.

According to Urban Angehrn, CEO of the Swiss Financial Market Supervisory Authority (FINMA), if Credit Suisse had not been rescued, “many other Swiss banks would probably have faced a run on deposits.” Angehrn added that “there was a high probability that the resolution of a global systemically important bank would have led to contagion effects and jeopardized financial stability in Switzerland and globally.”

Investors’ appetite for commodities vastly increased after the U.S. Treasury Department reportedly discussed the possibility of expanding the Federal Deposit Insurance Corporation insurance for bank deposits on March 21. Oil prices measured by the WTI have rallied 23.5% since March 20, and gold broke above $2,000 on April 5 — its highest daily close since Aug. 2020.

An unexpected shockwave on a $33 trillion asset class that was previously thought to be a safe haven for inflation could have benefited the commodity sector as well. Morgan Stanley Wealth Management has issued a warning about the commercial real estate market, predicting trouble with refinancing.

According to the bank’s report, the sector has been hard hit by increases in remote work and corporate layoffs, resulting in vacancy rates reaching a 20-year high. As a result, investment bank strategists predict a 40% drop in commercial real estate prices and state that “more than 50% of the $2.9 trillion in commercial mortgages will need to be renegotiated in the next 24 months when new lending rates are likely to be up by 350 to 450 basis points.”

Bitcoin bulls may have benefited from increased demand for inflation protection, but some may have squandered the opportunity by placing size bets of $30,000 or higher.

Bulls placed 85% more bets, which did not translate to victory

The weekly BTC options expiry has $1.2 billion in open interest, but the actual figure will be lower because bulls have concentrated their bets on Bitcoin price trading above $29,000.

Bitcoin options aggregate open interest for April 7. Source: CoinGlass

The 1.85 call-to-put ratio reflects the difference in open interest between the $720 million call (buy) options and the $390 million put (sell) options. However, the outcome will be much lower as bulls were overly optimistic.

For instance, if Bitcoin’s price remains near $28,100 on April 7 at 8:00 am UTC, there will be only $125 million in call options. This distinction arises since the right to buy Bitcoin at $29,000 or $30,000 is rendered void if BTC trades below that on the expiry.

Related: Will Bitcoin break above $30K? New JOLTS data, weaker dollar boost chances

Bulls and bears have similar incentives, so the outcome is unpredictable

Below are the four most likely scenarios based on the current price action. The number of options contracts available on April 7 for call (buy) and put (sell) instruments varies depending on the expiry price. The imbalance favoring each side constitutes the theoretical profit:

  • Between $26,000 and $27,000: 300 calls vs. 6,000 puts. The net result favors the put (sell) instruments by $150 million.
  • Between $27,000 and $28,000: 1,200 calls vs. 3,500 puts. The net result favors the put instruments by $60 million.
  • Between $28,000 and $29,000: 4,500 calls vs. 1,100 puts. Bulls flip the tables and profit $100 million.
  • Between $29,000 and $30,000: 8,500 calls vs. 100 puts. Bulls’ advantage increases to $240 million.

This rough estimate considers only put options in bearish bets and call options in neutral-to-bullish trades. Nonetheless, this oversimplification excludes more complex investment strategies. A trader, for example, could have sold a call option, effectively gaining negative exposure to Bitcoin above a specific price, but this effect is difficult to estimate.

The critical level for the weekly expiration is $28,000, but it is impossible to predict the outcome due to increased economic recession risks and market volatility. If bulls are able to secure a $100 million, those funds will most likely be used to further strengthen the support level.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Signature’s crypto clients told to close their accounts by April 5: Report

Any crypto deposits not transferred to another bank by April 5 will be liquidated and a check mailed to the client’s address.

Signature Bank’s cryptocurrency clients have been reportedly given until April 5 to take their funds out and find another bank, or have their accounts closed by the federal regulator.

According to Bloomberg, a United States Federal Deposit Insurance Corporation spokesperson said on March 28 that the agency was reaching out to depositors from Signature whose deposits were not included in NYCB’s bid, confirming that these deposits belonged to digital asset clients.

Depositors who have their accounts closed will receive a check to their registered address, so anyone with funds held with Signature but unable to transfer them out should at least ensure their registered address is up-to-date.

Cointelegraph has reached out to the FDIC for confirmation but did not hear back by the time of publication.

While New York Community Bancorp (NYCB) bought most of the deposits and loans held by Signature Bank on March 19, the deal with the FDIC did not include “approximately $4 billion of deposits related to the former Signature Bank’s digital banking business.”

Related: Crypto-friendly banks mismanaged traditional risks, FDIC head tells Senate hearing

Also excluded from the deal was Signature’s payments platform Signet, which is powered by blockchain technology to facilitate real-time payments with no transaction fees or limits. The fate of Signet is still currently uncertain.

New York-based Signature was closed by New York regulators on March 12 amid concern that it was experiencing a bank run and posed a “systemic risk” to the U.S. economy.

The FDIC was appointed as the receiver of the bank, meaning it was tasked with administering the funds and property connected to it.

Banks interested in acquiring the assets of Signature were asked to submit bids to the FDIC by March 17, with the agency reportedly only considering bids from those with an existing bank charter.

‘Operation Choke Point 2.0’ may have contributed to SVB collapse: Mulvaney

While the existence of “Operation Choke Point 2.0” has not been confirmed, Mick Mulvaney spoke of “rumors” of its existence and the potential side effects of such a policy.

If the United States government really is implementing “Operation Choke Point 2.0” it will hurt financial stability and may have contributed to the collapse of Silicon Valley Bank (SVB) according to Donald Trump’s former Acting White House Chief of Staff, Mick Mulvaney.

“I don’t want to think that the government would actually do that,” Mulvaney said in a March 22 Bloomberg interview in reference to the rumored operation. He did however recall attending hearings on the original Operation Choke Point — a government initiative that aimed to limit certain industries’ access to U.S. banking services.

“You have to wonder if there’s not certain policies that the administration is putting in place that have — perhaps the intended, perhaps the unintended — consequences of raising the risk, and of increasing instability, and did we just see that at SVB?” he added.

“Were people at SVB because they were really good at it, or was there some factor in there that said we’re at SVB because no one else will take us.”

Mulvaney elaborated that he believes crypto played no role in the downfall of SVB and suggested poor risk management was to blame. He implied, however, the pressure being put on U.S. banks to avoid crypto may have contributed to SVB’s collapse.

“Operation Choke Point 2.0” is a term coined by Coin Metrics co-founder Nic Carter and refers to apparently coordinated efforts to discourage banks from holding crypto deposits or providing banking services to crypto firms on the basis of “safety and soundness” for the banking system.

While is it unclear whether “Operation Choke Point 2.0” is an official strategy, Carter has claimed there is evidence supporting its existence.

Related: Yellen defends government intervention to avoid another SVB

In a Feb. 9 blog post, Carter outlined some supposed evidence, highlighting a Jan. 3 joint statement on crypto assets from the Federal Reserve, Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC), which warned that decentralized blockchain networks are “highly likely to be inconsistent with safe and sound banking practices.”

More recently, critics pointed to the FDIC’s different treatment of crypto assets during the takeover of Signature Bank as further proof of the existence of “Operation Choke Point 2.0.”

Magazine: Best and worst countries for crypto taxes — plus crypto tax tips

‘Operation Choke Point 2.0’ may have contributed to SVB’s collapse: Mulvaney

While the existence of “Operation Choke Point 2.0” has not been confirmed, Mick Mulvaney spoke of “rumors” of its existence and the potential side effects of such a policy.

If the United States government really is implementing “Operation Choke Point 2.0,” it will hurt financial stability and may have contributed to the collapse of Silicon Valley Bank, according to Donald Trump’s former acting White House chief of staff, Mick Mulvaney.

“I don’t want to think that the government would actually do that,” Mulvaney said in a March 22 Bloomberg interview in reference to the rumored operation. He did however recall attending hearings on the original Operation Choke Point — a government initiative that aimed to limit certain industries’ access to U.S. banking services.

“You have to wonder if there’s not certain policies that the administration is putting in place that have — perhaps the intended, perhaps the unintended — consequences of raising the risk, and of increasing instability, and did we just see that at SVB?” he added.

“Were people at SVB because they were really good at it, or was there some factor in there that said we’re at SVB because no one else will take us.”

Mulvaney elaborated that he believes crypto played no role in the downfall of SVB and suggested poor risk management was to blame. He implied, however, that the pressure being put on U.S. banks to avoid crypto may have contributed to SVB’s collapse.

“Operation Choke Point 2.0” is a term coined by Coin Metrics co-founder Nic Carter to refer to an apparently coordinated effort to discourage banks from holding crypto deposits or providing banking services to crypto firms on the basis of “safety and soundness” for the banking system.

While is it unclear whether “Operation Choke Point 2.0” is an official strategy, Carter has claimed there is evidence supporting its existence.

Related: Yellen defends government intervention to avoid another SVB

In a Feb. 9 blog post, Carter outlined some supposed evidence, highlighting a Jan. 3 joint statement on crypto assets from the Federal Reserve, Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC), which warned that decentralized blockchain networks are “highly likely to be inconsistent with safe and sound banking practices.”

More recently, critics pointed to the FDIC’s different treatment of crypto assets during the takeover of Signature Bank as further proof of the existence of “Operation Choke Point 2.0.”

Related: Best and worst countries for crypto taxes — plus crypto tax tips

US exploring ways to guarantee the country’s 18T of bank deposits: Report

The current deposit insurance cap under the FDIC is $250,000, but recent banking collapses have seen calls to increase that amount.

U.S. officials are reportedly studying ways to expand the current scope of deposit insurance that would guarantee all U.S. bank deposits should the current banking crisis worsen.

The current deposit insurance cap under the Federal Deposit Insurance Corporation stands at $250,000, however, following the collapse of several banks in March, there have been calls to increase that amount.

Organizations such as the Mid-Size Bank Coalition of America called on March 18 for the cap to be lifted for the next two years, citing a need to protect depositors and to stop capital being pulled from smaller banks for supposedly safer-looking heavyweights.

According to a March 21 Bloomberg report citing “people with knowledge of the talks,” Treasury Department staff members are currently discussing the possibility of the FDIC being able to expand the current deposit insurance beyond the max cap to cover all deposits. According to the FDIC, domestic U.S. bank deposits totaled $17.7 trillion as of December 31.

The move would ultimately hinge on what level of emergency authority federal regulators have and if the insurance cap can be increased without formal consent from Congress.

Bloomberg’s sources indicated, however, that U.S. authorities don’t deem such a drastic move necessary at the moment, as recent steps taken by financial regulators are likely to be sufficient.

As such, they stated that a potential strategy is being whipped up just in case the current situation gets worse.

In response to Silvergate, Signature Bank and Silicon Valley Bank going bust in recent weeks, the Federal Reserve rolled out the $25 billion Bank Term Funding Program (BTFP) on March 13, as the government pushed to stem any further contagion.

Related: UBS Group agrees to $3.25B ‘emergency rescue’ of Credit Suisse

Meanwhile, in a March 20 press briefing, White House Press Secretary Karine Jean-Pierre was specifically asked if the federal government was supportive of a push from small- and mid-size banks to expand FDIC insurance beyond $250,000.

But Jean-Pierrre was tight-lipped on the Biden Administration’s view, saying on that “our goal is to ensure the financial system is stable” and emphasizing that creating a fair playing field was the “focus of Treasury and the bank regulators.”

“And as you saw, due to our actions this week at the direction of the President, Americans should be confident of their deposits. We’ll be there when they — when they need them.”

“And — and so, again, that’s what our focus is going to be. We don’t have any new announcements at this time. But clearly, we want to make sure that our financial system is stable,” she added.

US midsize banks seek FDIC Insurance on ‘all deposits’ for 2 years: Report

The banking coalition reportedly argued that it would bring stability to the banking industry and reduce the chances of “more bank failures,” in a letter to federal regulators.

The Mid-Size Bank Coalition of America (MBCA) has reportedly asked United States federal regulators to extend insurance on all deposits for the next two years.

According to a March 18 Bloomberg report, the MBCA – a coalition of mid-size U.S. banks – sent a letter to the U.S. Federal Deposit Insurance Corporation (FDIC), asserting that extending insurance on “all deposits” would “immediately halt the exodus” of deposits from smaller banks.

The MBCA also reportedly noted that this action would “stabilize” the banking industry and significantly decrease the chances of “more bank failures.”

It was added that the MBCA proposed the insurance program be funded by the banks themselves, by raising the deposit-insurance assessment on lenders who opt to participate in the increased coverage.

Related: Marathon Digital: Deposits held at Signature Bank are secure and available

John Deaton, founder of legal news outlet Crypto Law Lawyer, predicted in a March 19 tweet to his 250,000 followers that up to 300 banks could go under if the FDIC fails to provide a guarantee.

This comes after a recent analysis by economists, published on March 13, revealed a large number of banks are at risk from uninsured deposit withdrawals.

The report revealed that “even if only half of uninsured depositors” decided to withdraw, “almost 190 banks are at a potential risk” of impairment to insured depositors, with “potentially $300 billion of insured depositors at risk.”

Meanwhile, Tom Emmer, the majority whip of the United States House of Representatives, questioned reports that the FDIC is “weaponizing recent instability” in the banking sector to “purge legal crypto activity” from the U.S., in a March 15 letter to FDIC chair Martin Gruenberg, 

Emmer warned that these actions are “deeply inappropriate” and could lead to “broader financial instability.”

Furthermore, the U.S. Federal Reserve announced on March 13 that the Vice Chair for Supervision, Michael Barr, is “leading a review of the supervision and regulation” of Silicon Valley Bank, in “light of its failure,” with a review set for public release by May 1.

US midsize banks seek FDIC Insurance on ‘all deposits’ for 2 years: Report

The banking coalition reportedly argued in a letter to federal regulators that it would bring stability to the banking industry and reduce the chances of “more bank failures.”

The Mid-Size Bank Coalition of America (MBCA) has reportedly asked United States federal regulators to extend insurance on all deposits for the next two years.

According to a March 18 Bloomberg report, the MBCA — a coalition of mid-size U.S. banks — sent a letter to the U.S. Federal Deposit Insurance Corporation (FDIC), asserting that extending insurance on “all deposits” would “immediately halt the exodus” of deposits from smaller banks.

The MBCA also reportedly noted that this action would “stabilize” the banking industry and significantly decrease the chances of “more bank failures.”

The MBCA proposed that the banks themselves fund the insurance program by raising the deposit-insurance assessment on lenders who opt to participate in the increased coverage.

Related: Marathon Digital: Deposits held at Signature Bank are secure and available

John Deaton, the founder of legal news outlet Crypto Law Lawyer, predicted in a March 19 tweet to his 250,000 followers that up to 300 banks could go under if the FDIC fails to provide “some guarantee.“

This comes after a recent analysis by economists, published on March 13, revealed a large number of banks are at risk from uninsured deposit withdrawals.

The report revealed that “even if only half of uninsured depositors” decided to withdraw, “almost 190 banks are at a potential risk” of impairment to insured depositors, with “potentially $300 billion of insured depositors at risk.”

Meanwhile, Representative Tom Emmer, the majority whip in the United States House of Representatives, questioned reports that the FDIC is “weaponizing recent instability” in the banking sector to “purge legal crypto activity” from the U.S. in a March 15 letter to FDIC chair Martin Gruenberg,

Emmer warned that these actions are “deeply inappropriate” and could lead to “broader financial instability.”

Furthermore, the U.S. Federal Reserve announced on March 13 that the vice chair for Supervision, Michael Barr, is “leading a review of the supervision and regulation” of Silicon Valley Bank in “light of its failure,” with the review set for public release by May 1.

Crypto market cap reclaims $1T, and derivatives point to further upside

Bitcoin’s performance has outpaced Warren Buffett’s Berkshire Hathaway over the past six months, with crypto markets appearing to have turned a corner.

The total crypto market capitalization increased by 26% in seven days, reaching $1.16 trillion on March 17. Bitcoin (BTC) was the biggest winner among the top 20 coins, up 31.5%, though some altcoins gained 50% or more during the period.

Total crypto market cap in USD, 12-hour. Source: TradingView

The surge in cryptocurrency prices occurred as the United States Federal Reserve was forced to lend banks $300 billion in emergency funds. According to PBS NewsHour, nearly half of the money went to failed financial institutions Silicon Valley Bank and Signature Bank and was used to pay uninsured depositors. The remaining $153 billion was obtained through a long-standing program known as the “discount window,” which allows banks to borrow funds for up to 90 days.

While appearing to protect the banking sector, additional funding for the Federal Deposit Insurance Corporation and credit facilitation using Fed resources ultimately creates a “false sense of confidence,” according to activist billionaire investor Bill Ackman.

The $30 billion plan devised by U.S. regulators to avoid a major liquidity crisis in First Republic Bank “raised more questions than it answers,” said Ackman, who manages the hedge fund Pershing Square. Furthermore, Ackman stated that “half measures don’t work when there is a crisis of confidence.”

Billionaire Warren Buffett is on the losing side of the bet

As the banking crisis worsened, Warren Buffett, the co-founder and largest shareholder of Berkshire Hathaway — a $650 billion financial conglomerate — saw his holdings rapidly deteriorate. Berkshire Hathaway, for example, is the largest holder of Bank of America stock, which has fallen 15.5% year-to-date. This position alone has cost Buffett’s investment vehicle $5.2 billion.

Buffett, a well-known cryptocurrency critic, has stated that he has no interest in Bitcoin, even if the entire float is offered at $1,300. The 91-year-old, with a net worth of around $102 billion, claimed that Bitcoin doesn’t produce anything whereas farmland and residential real estate do.

However, Bitcoin’s price increased by 31.5% in the six months preceding March 17, while Berkshire’s stock increased by 5.8%. So, for the time being, the so-called “rat poison” — as Buffett once described Bitcoin — is outpacing his own financial management firm.

$1 trillion market capitalization support quickly restored

Let’s look at the performance of the top 80 cryptocurrencies by market capitalization to see if the surge above the $1 trillion mark has boosted the confidence of altcoin investors.

Weekly winners and losers among the top 80 coins. Source: Messari

Conflux’s CFX gained 97.6% after KuCoin Ventures announced a $10 million investment in stablecoin issuer and blockchain-based payment service provider CNHC, which is available on the Ethereum and Conflux networks.

Stacks’ STX (STX) rallied 75.7%, as the network is scheduled to undergo an upgrade on March 20 introducing Stacks 2.1, with new features and improvements.

Immutable X’s IMX rose 71.7% following a much-anticipated announcement of an upcoming partnership reveal scheduled for March 20.

Options traders are extremely confident about market conditions

Traders can gauge the market’s sentiment by measuring whether more activity is going through call (buy) options or put (sell) options. Generally speaking, call options are used for bullish strategies, whereas put options are for bearish ones.

A put-to-call ratio of 0.70 indicates that put option open interest lags behind the greater number of call options. In contrast, a 1.40 indicator favors put options, which is a bearish sign.

Related: Crypto Biz — SVB collapses, USDC depegs, Bitcoin still up

BTC options volume put-to-call ratio. Source: Laevitas

Since March 12, the demand for neutral-to-bullish call options has increased, indicating the growing risk appetite of derivatives traders. The movement peaked on March 17, when the volume of call options exceeded the volume of protective put options by a 3:1 ratio.

The gap favoring call options has stabilized at 2:1, indicating that professional investors are unconcerned following the March 17 rejection of the $1.16 trillion market capitalization level. In the end, data indicates a strong conviction for Bitcoin’s support at $26,000, so bulls are in a stronger position to continue their rally.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Bill Ackman warns US gov’t: Fix mistake in ‘48 hours’ or face ‘destruction’

Billionaire Bill Ackman said that SVB’s senior management made a “basic mistake” and should be fired.

Billionaire Bill Ackman has urged the United States government to “guarantee” all deposits held by Silicon Valley Bank (SVB) within the next “48 hours,” or it risks the “destruction” of many financial institutions.

In a March 11 tweet, Bill Ackman, CEO of hedge fund management firm Pershing Square Capital Management, said a “giant sucking sound” will be heard from the ”withdrawal of substantially all uninsured deposits” from all banks, not just the “systemically important banks (SIBs),” should the government fail to “guarantee all” of SVB’s deposits before the “open on Monday.”

Ackman suggested that this would be the result of “the world” realizing what an uninsured deposit is — “an unsecured illiquid claim on a failed bank.”

He warned that these withdrawals would “drain liquidity” from the community, regional and other banks and “begin the destruction” of these crucial institutions if the United States government fails to protect “all depositors.”

Ackman said the only other way to prevent this was in the “unlikely” event that major financial institutions, such as JPMorgan Chase, Citibank or Bank of America, acquire SVB before Monday.

He argued that this could have been “avoided” if the U.S. government had “stepped in on Friday” to guarantee SVB’s deposits, adding that the long-standing bank’s “franchise value” could have been safeguarded and “transferred” to a new owner in return for an “equity injection.”

Ackman suggested that SVB’s senior management “made a basic mistake” and should be fired. He noted:

“They invested short-term deposits in longer-term, fixed-rate assets. Thereafter short-term rates went up and a bank run ensued. Senior management screwed up and they should lose their jobs.”

After conducting a “back-of-the-envelope review” of SVB’s balance sheet, Ackman believes that even “in a liquidation,” depositors “should eventually” get back approximately “98% of their deposits”.

However, he argued that “eventually” is “too long” when you have “payroll to meet next week.”

Ackman tweeted shortly after, reiterating that the Federal Deposit Insurance Corporation (FDIC) should guarantee all SVB bank deposits by Sunday night, along with a proposed plan.

Related: Silicon Valley Bank failure could trigger run on U.S. regional banks

This comes after Bob Elliot, CEO of investment firm Unlimited, said that the Federal Reserve and FDIC decisions regarding the future of SVB may affect regional banks across the United States, putting trillions of dollars at risk of a bank run.

Elliot stated that nearly a third of deposits in the United States are held in small banks, adding that approximately 50% of those deposits are uninsured.

$920B is the number to watch now that crypto’s trillion dollar total market cap is gone

The crypto market is taking a walloping, and there are three important reasons why BTC’s $380 billion valuation is a key support for the entire market.

Big round numbers always pique the interest of investors and the $1 trillion total crypto market capitalization is no exception. It’s a level that held for 48 days before collapsing on March 9. After a 16-hour negative 8.6% price movement, the indicator fell to $914 billion, its lowest level since Jan.13.

Total crypto market cap in USD, 1-day. Source: TradingView

Concerns about the stability of the U.S. banking industry, specifically the downfall and subsequent closure of Silvergate Bank (SI) on March 8 and the shut down of Silicon Valley Bank (SVB) on March 10 by The California Department of Financial Protection and Innovation, are among the reasons for breaking below the $1 trillion capitalization support. Silvergate was a critical fiat gateway network for the most important cryptocurrency exchanges and intermediaries.

The California Department of Financial Protection and Innovation did not provide an explanation for SVB Bank’s closure. Nonetheless, it stated that the financial institution will be the first FDIC-insured institution to fail in 2023.

Silicon Valley Bank possessed more than $200 billion in assets and provided financial services to a number of crypto-focused venture firms, including Andreessen Horowitz and Sequoia Capital.

Don’t forget, however, the ongoing efforts of the U.S. Federal Reserve to curb inflation, which include increasing interest rates above 2% in August 2022 and reducing its balance sheet through asset sales. In addition to this, U.S. labor market data released on March 10 revealed the creation of 311,000 jobs in February 2023, supporting the notion that the Fed’s anti-stimulus measures require additional firepower.

The unexpected result of the central bank’s cautious stance is a greater likelihood of a longer and more severe economic downturn. Investors demanded a higher return for two-year treasury notes versus longer-term dated bonds, causing the inverted bond curve to reach its highest level in 40 years.

What is the significance of the $920 billion market capitalization?

A notable bounce occurred as total crypto capitalization reached $920 billion, indicating large buyers around that level, which may appear insignificant at first but is critical for Bitcoin (BTC), the leading cryptocurrency. To begin, one must understand that Bitcoin accounts for roughly half of total crypto capitalization when stablecoins are excluded.

As a result, Bitcoin’s $380 billion market capitalization serves as the foundation for the $920 billion total. Three reasons explain why such a level is critical from a valuation standpoint.

Bitcoin is still a top-20 global tradable asset, valued at over $380 billion, ahead of the giant retailer Walmart (WMT), international payment processor Mastercard (MA), and the highly profitable consumer discretionary Procter & Gamble (PG). It becomes more difficult to attribute failure after such a remarkable accomplishment.

Despite Bitcoin’s 50% decline in 12 months to $19,650, its performance is comparable to that of billion-dollar companies such as Credit Suisse Group (CS) down by 63%, First Republic Bank (FRC) 51%, Warner Bros. (WBD) 43%, and Intel Corporation (INTC) 43%.

Lastly, by maintaining its $380 billion capitalization, it remains the seventh largest global base money when compared to fiat currencies. For example, the Australian Dollar (AUD) has a monetary supply of $378 billion, while the Canadian Dollar (CAD) has a monetary supply of $220 billion. The Indian Rupee, with a monetary base of $500 billion, is the next potential target.

At the moment, the options put/call ratio is stable

Traders can gauge the market’s overall sentiment by measuring whether more activity is going through call (buy) options or put (sell) options. Generally speaking, call options are used for bullish strategies, whereas put options are for bearish ones.

A put-to-call ratio of 0.70 indicates that put option open interest lags behind the more call options and is therefore bullish. In contrast, a 1.40 indicator favors put options, which is a bearish sign.

Related: South Dakota gov vetoes bill excluding crypto from definition of ‘money‘

BTC options volume put-to-call ratio. Source: laevitas.ch

Since March 8th, protective puts have been in greater demand, indicating derivatives traders’ risk aversion. Aside from a brief overshoot on March 9 when the put-to-call ratio jumped above 1.50, nothing was out of the ordinary as the movement coincided with the Bitcoin price falling below $22,000.

The gap favoring the put options risk metric had been narrowing, indicating that even professional traders were finding themselves shorthanded as the crypto market continued to fall to new lows.

More importantly, the Bitcoin options market shows no signs of stress, which is encouraging given the immense pressure from the banking sector and the prospects of a dwindling economy.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.