Image 1: Chart of generic front month Bitcoin and Ether futures, top lagged by four months and bottom with no lag

Image 1: Chart of generic front month Bitcoin and Ether futures, top lagged by four months and bottom with no lag
Image 1: Chart of generic front month Bitcoin and Ether futures, top lagged by four months and bottom with no lag
Source: Bloomberg

This year has been a very exciting year for cryptocurrency investors. First, with the approval of the well-rumored Bitcoin ETFs in January, the mainstream era of Bitcoin investing finally came to be. January was the catalyst for this followed by another halving event in April. Thus, bitcoin has had two big catalysts go in its favor. This has led to a move from $40K to the current $58K, a good year by all estimations. However, bitcoin is also well-off its highs for the year, as it touched close to $75K back in March before the halving. Thus, for those that went long for the halving catalyst, an event that had never seen the price go lower over a three-, six- or 12- month basis, are underwater. In fact, there have been some estimations that the average price accounts are long Bitcoin ETFs from is about $60K, suggesting the money that has flowed into the ETFs might also be underwater. Have these catalysts been what was expected? Were they so well-rumored that it was a buy-the-rumor and sell-the-news event? Now, traders and investors are beginning to speculate if ether will get the same bump in price as ETF listings are approved for Ether products. Some see a bump in price the same way bitcoin moved. The top chart shows the overlay of generic front month futures in both bitcoin and ether, with bitcoin leading by four months, trying to anticipate what a move in ether could look like. However, the bottom chart shows the two products with no lead/lag and we can see that both have moved in lockstep even though the catalysts this year have been almost entirely in bitcoin and not in ether. 


Image 2: Spread of generic front month Bitcoin futures vs. generic front month Ether futures, bottom chart using a 15x multiplier

Image 2: Spread of generic front month Bitcoin futures vs. generic front month Ether futures, bottom chart using a 15x multiplier
Image 2: Spread of generic front month Bitcoin futures vs. generic front month Ether futures, bottom chart using a 15x multiplier
Source: Bloomberg

Image 3: Graph of relative price of Bitcoin and Ether generic front month futures


Image 4: Daily ichimoku cloud chart for generic front month futures of Bitcoin (top) and Ether (bottom)


Image 5: Year-to-date chart of ethereum gas prices


Image 6: Bitcoin and ethereum implied volatility term structure


Image 7: Open interest and volumes for Bitcoin and Ether options


Image 8: Implied volatility surface by delta for both Bitcoin and Ether options


Image 9: Expected return and Greeks for an August bitcoin 55,000 put and an August ether 2900 put