Author: Faith Yakubu

This Friday, Deribit, a leading derivatives exchange, braces for a substantial expiration of cryptocurrency options, totaling over $9.4 billion, with bitcoin options comprising the majority at $6.35 billion.

The upcoming expiry has sparked notable activity in the options market, particularly for Bitcoin, where the put-call ratio stands at 0.68, signaling an increased interest in put options compared to calls. In contrast, ether options, valued at $3.08 billion, exhibit a lower put-call ratio of 0.49, suggesting a more bullish sentiment among traders.

Amidst this activity, attention is drawn to the largest open interest in year-end expiry calls, notably at a $100,000 strike price for Bitcoin. This optimistic outlook reflects a belief among derivatives players in Bitcoin’s potential to surpass this milestone by December.

QCP Capital analysts interpret this surge in options activity as investors positioning themselves for a post-halving resurgence in bitcoin’s value, anticipating a breakout from its two-month consolidation period.

Standard Chartered’s recent analyst note aligns with this sentiment, projecting a year-end target price of $150,000 for bitcoin and $8,000 for ether.

Options, as derivative contracts, offer traders the right, but not the obligation, to buy or sell the underlying asset at a predetermined price within a specified timeframe. The distribution of put and call options is often used to gauge market sentiment, with put options typically indicating bearishness and call options suggesting bullishness.

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S&P Global Ratings has indicated that the proposed regulations in the United States may lead to a shift in the stablecoin landscape, potentially undermining the dominance of Tether’s USDT.

The regulatory framework, if approved, could grant banks a competitive advantage by capping stablecoin issuance for non-banking institutions at $10 billion, according to S&P’s report released on Wednesday.

The prospect of regulatory clarity is expected to incentivize traditional financial institutions to enter the stablecoin market, a development that could erode Tether’s market share, S&P stated.

The proposed stablecoin bill, introduced by U.S. Senators Cynthia Lummis and Kirsten Gillibrand, aims to establish guidelines for stablecoin operations within the country. Stablecoins, a form of cryptocurrency tied to fiat currencies such as the U.S. dollar, hold significant importance within crypto markets.

While the U.S. dollar remains the preferred peg for stablecoins, the absence of specific U.S. regulations for most stablecoin issuers may change with the introduction of the Lummis-Gillibrand Payment Stablecoin Act.

Analyst Andrew O’Neill highlighted that the passage of the bill could expedite institutional blockchain innovation, particularly in areas like tokenization and digital bond issuances involving on-chain payments. This could create opportunities for banks as stablecoin issuers and potentially reduce Tether’s dominance in the global stablecoin market.

S&P emphasized that Tether’s USDT, with a market capitalization of $110 billion, faces potential challenges under the proposed legislation, as it is issued by a non-U.S. entity and would not qualify as a permitted payment stablecoin. Consequently, U.S. entities may face restrictions on holding or transacting in USDT, potentially dampening its demand.

Additionally, the removal of the SEC’s requirement for custodians to report digital assets on their balance sheet could spur the emergence of new digital asset custody providers, fostering greater competition in the market.

Despite Tether’s substantial market presence, S&P has previously criticized USDT for its perceived shortcomings in fulfilling its primary function of maintaining a stable value.

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Block, the parent company of Square and Cash App, unveiled a new initiative today enabling merchants utilizing Square’s services to convert a portion of their daily sales into Bitcoin.

Rolling out initially in the U.S., the feature allows Square sellers to transfer 1-10% of their daily sales to their personal Cash App accounts, where the amount will automatically convert into Bitcoin by the day’s end. Merchants will receive confirmation of the conversion once the transaction is finalized.

This bitcoin conversion feature will gradually become available to all sole proprietors or single-member LLCs in the coming months. Block will levy a 1% fee on every conversion made by the seller. Furthermore, merchants have the flexibility to send Bitcoin to other wallets or sell them at their convenience directly from their Cash App accounts.

In a statement, Block emphasized its belief that Bitcoin serves as a tool for economic empowerment, offering individuals, including business owners, access to a global monetary system. The company highlighted that many Square sellers have expressed interest in bitcoin, viewing it as a means for long-term savings and diversification of their business assets.

When questioned about sellers’ conversion habits and average returns, Block stated that it had recently piloted the Bitcoin conversion feature with a select group of merchants and lacked definitive data on this aspect.

Block has prioritized simplifying the process of purchasing Bitcoin across its platforms. For instance, the company integrated its self-custodial wallet Bitkey with Cash App and Coinbase, facilitating seamless Bitcoin trading for users.

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Following a brief period of net outflows preceding Bitcoin’s block-reward halving, spot bitcoin exchange-traded funds (ETFs) in the United States have returned to net inflows, with Fidelity’s Wise Origin Bitcoin Fund (FBTC) leading the way.

On Monday, spot Bitcoin ETFs collectively experienced net inflows exceeding $62 million, with FBTC securing the largest single-day net inflow of $34.83 million. The ARK 21Shares Bitcoin ETF and The iShares Bitcoin Trust also saw substantial net inflows of over $22.5 million and $19.65 million, respectively.

In contrast, the Grayscale Bitcoin Trust witnessed the largest single-day net outflow, with nearly $35 million exiting the product. However, since their inception, U.S.-traded spot bitcoin ETFs have amassed a cumulative total net inflow of $12.38 billion, indicating continued investor interest.

BlackRock’s IBIT ETF, known for its consistent inflows, extended its streak for the 70th consecutive day on Monday, solidifying its position among the top 10 ETFs with the longest streaks of daily inflows. IBIT currently commands a market share of nearly 54% among spot bitcoin ETFs.

Despite recent fluctuations, the price of Bitcoin remains resilient, hovering above $66,200 as reported by The Block’s Bitcoin Price Page. This stability in bitcoin’s price underscores ongoing investor confidence in the digital asset and its associated investment vehicles.

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Bitcoin’s recent halving, completed on April 19, may not immediately impact market dynamics, with analysts suggesting a potential two-month wait for significant effects. Despite an 8% increase in bitcoin’s spot price since the halving, experts anticipate a delay in supply and demand adjustments.

Analysts at QCP Capital suggest that historical patterns indicate a delay of around two to three months before the halving’s supply constraints translate into notable price movements. This suggests that bitcoin bulls may have additional time to build larger long positions.

Bitfinex analysts highlight the post-halving reduction in bitcoin supply issuance, which could stabilize prices and potentially lead to further appreciation. However, they caution that geopolitical turmoil, particularly in the Middle East, could impact Bitcoin’s long-term valuation.

Additionally, the Bitfinex Alpha report notes potential stabilization in demand from spot bitcoin ETFs, which have been a significant driver of market activity. However, recent outflows from ETFs suggest a possible slowdown in demand.

Meanwhile, QCP Capital analysts anticipate a short squeeze in the altcoin and memecoin market in the short term. Persistent negative funding in these markets, coupled with potential fluctuations in demand, could lead to increased volatility.

While the overall memecoin market has seen a slight uptick in market cap, top memecoins like dogecoin, shiba inu, and dogwifhat have experienced minor declines in the past 24 hours, reflecting ongoing market fluctuations.

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