In the past two weeks, there have been dark clouds hovering over the price of BTC, not only due to the significant outflow of spot ETFs but also because of the impending Mt. Gox bombshell. Today, Mt. Gox trustees have officially begun the process of compensating creditors. According to Nobuaki Kobayashi, the trustee for Mt. Gox, the repayment will be made in BTC and will commence in early July. Combined with the 14,000 BTC that was transferred from the Mt. Gox address a month ago, the market immediately reacted to the news by seeking refuge, causing a sharp short-term decline in BTC, briefly falling below 61,000.
In terms of options, the actual increase in volatility and market concerns about the future have significantly raised the levels of front-end implied volatility. At the same time, the front-end Vol Skew remains positively correlated with the price, falling into negative territory. Looking at BTC trading, prior to the news, despite several consecutive days of price decline, the market was primarily focused on Long Risky positions at the end of June. Perhaps the low prices attracted investors to buy call options or it was a sign of trust in the key support levels at 61,000/60,000.
As for ETH, the president of The ETF Store has once again stated that an Ethereum spot ETF may be launched next week, giving the community some hope. Market expectations have also tilted the smile curve towards bullish options from July onwards, contrasting with the front-end. However, there seems to be some disagreement in the market. In the case of high IV and high Vol Skew, over 3,000 contracts of the July-end 4,000-C were sold, becoming a trading hotspot yesterday.
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