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Bitfinex Alpha | U.S. economy confuses policymakers, price volatility intensifies in crypto options market
The U.S. is currently in an exceptional economic environment, with recession indicators continuing to be in the red and interest rates at 16-year highs, suggesting inflation remains persistent, but the services sector and job market continue to show surprising resilience. The S&P Global Composite PMI posted its biggest gain since April 2022 as consumer spending continued unabated.
U.S. first-quarter gross domestic product was also revised up sharply, and the latest weekly job market report showed many jobless claims fell short of expectations as strong demand for workers persisted.
Despite lingering inflationary pressures, U.S. consumers have surprisingly continued to support the economy and fight to stave off recession. The latest personal consumption expenditures (PCE) report, the Fed's preferred inflation gauge, points to a challenging economic and policy environment as consumers continue to spend on travel, leisure and other services.
Reading the minutes of the FOMC meeting in May, it is clear that members were divided on how to deal with inflation. Some policymakers made it clear that rates should be on hold; others were less certain and emphasized the need to thoroughly assess all economic data, acknowledging that uncertainty will linger until they meet again.
Against this macro backdrop, an interesting development emerges in the crypto options market, illustrating how crypto traders — especially trading institutions — should position themselves.
While $2.3 billion worth of bitcoin options expired in May, accounting for 26% of all open interest on Deribit, the options underlying market was largely undisturbed, with volatility seen as moderate in the short term. However, this situation is not expected to last, and events such as the Bitcoin halving next year or the 2024 US presidential election are expected to inject new volatility into the market.
Traders are closely watching options expiring in June, anticipating potential market volatility. As we approach expiration, the options market appears to have influenced sentiment, as evidenced by changes in the put/call ratio and skew. The net put/call ratio for Bitcoin options has increased to nearly 0.5, indicating that more options traders are turning bearish.
The same interesting dynamics have also occurred in Ethereum. The introduction of proto-danksharding technology has the potential to change the rules of the game in Ethereum - this technology can reduce Layer 2 transaction costs tenfold. This breakthrough aims to increase the adoption of L2, breathing new life into the currently depressed Ethereum market.
Check out cryptocurrency news. As usual, there is some good news and some not so good news.
On a positive note, Hong Kong has positioned itself as a new digital asset hub by reopening trading to retail investors, in stark contrast to the rest of mainland China.
FTX hopes to rebuild the business with the launch of FTX 2.0, and CEO John Ray has been working on a restart plan as he meets with creditors and debtors.
Hotbit exchange announced that it will cease operations due to its cash flow problems. Following the Ledger Recover controversy, hardware wallet provider Ledger has delayed the release of its Ledger Recover feature after facing potential criticism from the community. Ledger has committed to open-sourcing the ability to share seed phrases and codes before releasing the feature.
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72% of ETH liquidity is concentrated in Binance, Bitfinex, OKX, Coinbase and Kraken
Before the FTX crash, FTX and FTX.US accounted for nearly 40% of market liquidity. The market depth share of available exchanges in the U.S. is currently about 40%, down from an all-time high of 54% before Terra’s crash last May.
https://research.kaiko.com/insights/72-of-eth-liquidity-is-concentrated-on-5-exchanges
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Bitfinex will list the native token WBT of WhiteBIT Exchange
Bitfinex announced that it will list the native token WBT of WhiteBIT exchange.
Founded in 2018, WhiteBIT is from Ukraine and is one of the top 20 exchanges in the world, offering a range of staking and trading services. WhiteBIT token benefits for holders include, 100% discount on trading fees, free daily AML checks, free ETH and ERC 20 token withdrawals, and higher referral rebates. The WBT token is currently ranked 71st on the Coingecko Hot List with a market cap of over $688 million.
Bitfinex plans to open WhiteBIT Token (WBT) deposits around 12:00 UTC on May 30th. WBT trading will open around 10:00 UTC on June 1, offering USD and USDT trading pairs.
Bitfinex launched a new API function that allows users to add up to 20 IP addresses to the whitelist
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