QCP Market Update – 8 Feb 24

Since our last market update on 24 Jan, the market has ticked higher from the lows (BTC 38,500 and ETH 2,165). Two key reasons for this:

1. Reduction of GBTC flows / net positive BTC spot ETF inflows

Daily GBTC outflows have reduced from $500-600m daily to just $100-200m now. Total inflows across all BTC ETFs are now positive (Chart 1)!   

Chart 1

[On a side note, we have observed some price idiosyncrasies around the spot ETF fixings. Between 3-4pm EST, prices tend to tick higher. This is possibly because IBIT (BlackRock ETF) uses a 1hr observation window from 3-4pm EST for use in calculating the Net Asset Value (NAV) of the ETF and participants involved in the creation of ETF units hedge their exposure in this window. Conversely, we generally see downward pressure on price after 4pm EST as GBTC uses a point fix at 4pm EST which means that market makers have to sell around and after that time.]

1. Strong price action in US equities

In spite of the hawkish-leaning Fed (with Powell pushing back on any cuts in March) and higher US yields on the back of a strong Feb NFP (353k actual v 180k expected), US equities continue to outperform, with the likes of NVDA and META rallying on strong earnings and positive headlines.

It is likely that any dip in equities will continue to be bought as underallocated investors chase returns. On the back of this bullish sentiment, BTC and ETH are likely to follow, coupled with the BTC halving and ETH spot ETF narratives.

We’ve seen strong interest in Accumulators which allows investors to buy BTC or ETH at a significant discount to current spot price. This is a great way to build a long position if one is bullish into the end of the year.

BTC and ETH forwards are also elevated again, providing attractive opportunities to put on cash and carry trades and lock in yield (8-9% ann. yield) for the longer term.