Crypto Market

BTC and ETH Market Insight

The market started this week with the implied volatilities on $BTC and $ETH options dropping to the lowest levels over 3 years. Decreasing core CPI and $DXY below 100 were favorable for risk assets. Then, here comes the catalyst of the week: Ripple won a verdict that $XRP was not a security. $XRP and LSDfi led the rally and $BTC reached sub 32K level, but it failed to break the 30-31k tight range. The rally did not last long and most gains were wiped out on the next day. The market has reached a consensus that the worst part of the bear market was over, but it still needed time and narratives for building up a continuous upward trend. 

Options Market

Over the past week, both RVs and IVs were declining in tandem, with realised volatility standing at 30% - 1.6% daily movement. Implied volatility has decreased by about 5 points, settling around 40%. As a result, the Volatility Risk Premium increased to about 10 vols, making it attractive for gamma sellers. Although the market quickly erased the gain fueled by the news about Ripple winning the SEC case, vol continued to drift lower regardless. ETH/BTC volatility spreads remained steady at 2 vols (BTC leading) across the curve. Skew, on the other hand, unanimously manifested a bullish view on both BTC and ETH. Particularly for ETH, the short-term downside protection used to trading at a premium vs calls.

Altcoins and Blockchain News

• On July 13th, Ripple won a lawsuit that XRP is not a security, leading to a more than 60% increase in XRP's price.
• The development organization cLabs behind Celo has proposed to transition Celo from an independent EVM-compatible L1 blockchain to an Ethereum L2 based on the OP Stack.
• Aave has launched the decentralized stablecoin GHO on the Ethereum mainnet and has added a GHO/crvUSD liquidity pool on Curve.
• On July 11th and 15th, Ark Invest sold 135,000 and 478,000 shares of Coinbase stock, respectively, marking the first time since July 26th, 2022 that the firm has sold the stock.
• According to Bloomberg, the U.S. Securities and Exchange Commission has officially confirmed receiving Bitcoin ETF applications from BlackRock, VanEck, Invesco/Galaxy Digital, Fidelity, and WisdomTree.
• According to a statement from Worldcoin on July 13th, World ID has now registered over 2 million users.
• The U.S. Federal Trade Commission (FTC) has reached a settlement agreement with crypto lending company Celsius Network, which will be prohibited from dealing with consumers' assets, and the company and its affiliates have agreed to a $4.7 billion judgment.
  MetisDAO has launched its incubated project, ZKM, which will upgrade the existing OptimisticRollup to HybridRollup and enable timely withdrawals while ensuring security. ZKM will launch on the testnet before the end of the year.
• Binance Labs has invested $15 million in Xterio to develop its game development capabilities in AI and Web3.

Macro

Last week’s CPI prints signaled cooling inflation: June core inflation rate rose 0.2% MoM vs. estimated 0.3% and 4.8% YoY vs. estimated 5.0%. Stock rallied on this optimistic sign, the S&P 500 added 2.4%, the NASDAQ added 3.3%, the Dow added 2.3%. DXY fell below 100 for the first time since last April.