Bitcoin holds $30K as bulls flaunt their advantage in Friday’s $715M BTC options expiry

June 22, 2023 Coin Telegraph

Bitcoin holds K as bulls flaunt their advantage in Friday’s 5M BTC options expiry

ARK

News of regulatory enforcement against the crypto sector fell to the wayside as Bitcoin price rallied above $30,000, and options data suggests the trend will continue.

Bitcoin's (BTC) 15% rally toward $30,300 between June 19 and June 21 caught most traders by surprise, triggering $125 million in liquidations of leveraged short futures contracts. Narrowing down the trigger for the rally is complicated, but some analysts point to the potential inflow of institutional investors if Blackrock’s exchange-traded fund (ETF) application gets regulatory approval.

BlackRock just filed with the SEC to create a spot #Bitcoin ETF.

Given their reputation, this has the highest likelihood of happening out of all the attempts at a spot ETF so far.

The institutional liquidity floodgates may finally open https://t.co/c9g2Ten1h8 pic.twitter.com/L2NmXq11gL
— Joe Consorti ⚡ (@JoeConsorti) June 15, 2023

ARK Invest CEO and chief investment officer Cathie Wood explained the rationale for the firm’s bullishness on Bitcoin price, more specifically their $1 million target. According to Wood, even in a deflationary environment, Bitcoin can still outperform by offering a solution to the traditional financial system’s counterparty risk.

Furthermore, the negative regulatory pressure eased on June 16 after Binance exchange was able to strike a temporary agreement with the U.S. Securities and Exchange Commission (SEC) to avoid a potential asset freeze. The event further cemented Bitcoin bears’ opportunity to profit on the $715 million weekly BTC options expiry.

Bears made a mistake when BTC price dropped below $25,000

Bitcoin’s price dropped below $26,300 on June 10, fueling bearish bets by traders using option contracts. Such a level was only recouped on June 16, which explains why bears have concentrated their bets on Bitcoin prices trading below $27,000.

*Deribit* *Bitcoin options aggregate open interest for June 23. Source: Deribit*

The 0.82 put-to-call ratio reflects the difference in open interest between the $415 million call (buy) options and the $300 million put (sell) options. However, the outcome will be lower as bears were caught by surprise as Bitcoin gained 10% in two days.

For instance, if Bitcoin's price remains near $29,800 at 8:00 a.m. UTC on June 23, there will be only $5 million in put options. This distinction arises since the right to sell Bitcoin at $28,000 or $29,000 is rendered void if BTC trades above that on the expiry.

Bulls are in a good position to capture a $250 million profit

Below are the four most likely scenarios based on the current price action. The number of options contracts available on June 23 for call (buy) and put (sell) instruments varies depending on the expiration price. The imbalance favoring each side constitutes the theoretical profit:

Between $27,000 and $28,000: 3,500 calls vs. 1,200 puts. The net result favors the call (buy) instruments by $60 million.
Between $28,000 and $29,000: 7,300 calls vs. 500 puts. The net result favors the call instruments by $195 million.
Between $29,000 and $30,000: 8,600 calls vs. 100 puts. The bulls' advantage increases to $250 million.
Between $30,000 and $31,000: 10,400 calls vs. 0 puts. Bulls have total control, profiting $310 million.

This rough estimate considers only put options in bearish bets and call options in neutral-to-bullish trades. Nonetheless, this oversimplification excludes more complex investment strategies. A trader, for example, could have sold a call option, effectively gaining negative exposure to Bitcoin above a specific price, but this effect is difficult to estimate.

Bears will likely try to downplay the multiple Bitcoin exchange-traded funds (ETF) applications, including Blackrock’s and WisdomTree’s. Meanwhile, bulls should closely monitor the regulatory changes, including the ongoing Binance exchange’s investigation in France, as the Paris Prosecutor’s Office reportedly cited “acts of illegal exercise of the function of a service provider on digital assets (PSAN), and acts of aggravated money laundering.”

The critical level for the weekly expiration is $28,000, but it is impossible to predict the outcome due to increased cryptocurrency regulatory risks. If bulls are able to profit $250 million or higher, those funds will most likely be used to further strengthen the $28,000 support.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

ARK Invest buys Coinbase shares the same day SEC serves lawsuit

June 7, 2023 Coin Telegraph

ARK

ARK Invest bought over 400,000 shares of Coinbase stock totaling more than $21 million on the day the SEC served the exchange with a lawsuit.

The same day cryptocurrency exchange Coinbase was served with a lawsuit from the United States Securities and Exchange Commission (SEC), ARK Invest added more stock to its Coinbase holdings.

According to investor notification from ARK Invest on June 6, the firm added approximately 419,324 shares of Coinbase Global Inc., which totals to a worth of nearly $21.6 million at the time of closing on the same day.

This came as Coinbase stock plummeted more than 20% on June 6, following the ongoing action involving the SEC and the recent lawsuit announcement. At the time of writing Coinbase's stock price hovers around $53.11.

The addition of Coinbase stocks to the ARK Invest portfolio follows a trend. About a month prior, on May 2, ARK Invest added an additional 168,869 Coinbase shares, which then equaled around $8.5 million. The firm made investments in March and April as well, of 2.4 million shares for about $117 million and 304,300 shares worth $17.5 million, respectively.

The recent lawsuit from the SEC against Coinbase accuses the exchange of offering unregistered securities and that it never registered as a broker, national securities exchange or clearing agency.

Coinbase CEO Brian Armstrong took to Twitter in response and said his team is “confident in our facts and the law.” He continued to say that he welcomes the opportunity “to finally get some clarity around crypto rules” in court.

The chief legal officer for Coinbase Paul Grewal, told the U.S. Congress on June 6 that the company has “embraced regulation” since it was founded and that in 2022 alone it met with the SEC 30 times for regulatory guidance.

On June 6th, Coinbase was also issued a Show Cause Order from a task force of state security regulators in states including Alabama, California, Illinois and Vermont, among others. It alleged that the exchange's offering of its staking rewards program is in violation of the securities law.

Magazine: Crypto regulation: Does SEC Chair Gary Gensler have the final say?

ARK Invest spends Int’l Workers’ Day buying $8M in Coinbase shares

May 2, 2023 Coin Telegraph

ARK Invest spends Int’l Workers’ Day buying M in Coinbase shares

ARK

Despite Coinbase shares tumbling amid its legal battle with the SEC, Cathie Wood is still bullish on the crypto exchange.

ARK Invest, the investment management firm founded by legendary investor Cathie Wood, has celebrated International Workers’ Day by buying shares of cryptocurrency exchange Coinbase.

On May 1, ARK purchased 129,604 Coinbase shares for its ARK Innovation exchange-traded fund (ETF), according to an investor notification seen by Cointelegraph.

The investment company also bought 23,456 Coinbase shares for its ARK Next Generation Internet ETF and 15,809 for its Fintech Innovation ETF. The entire purchase amounted to 168,869 Coinbase shares, worth around $8.5 million.

The acquisition makes up nearly 50% of the total Coinbase shares bought by ARK last month. In April, ARK bagged a total of 304,300 shares worth $17.5 million. Previously, ARK bought 2.4 million shares in March for about $117 million.

The latest purchases by ARK come amid Coinbase stock seeing another wave of red. On Monday, Coinbase shares dropped 6.8% amid news of a new class-action lawsuit alleging the exchange violated privacy laws.

Over the past month, Coinbase shares plummeted more than 20%, dropping from a high of nearly $72 in April to $50.1 on Monday, according to data from TradingView.

*Coinbase shares’ price chart over the past 30 days. Source: TradingView*

The sharp decline in Coinbase’s stock price came amid ongoing action against Coinbase by the United States Securities and Exchange Commission (SEC). On March 22, the securities regulator sent Coinbase a Wells notice, suggesting enforcement action against the exchange. In response, Coinbase filed a motion against the SEC on April 25, asking the regulator to answer 50 questions concerning the regulatory treatment of certain digital assets.

Magazine: Crypto regulation — Does SEC Chair Gary Gensler have the final say?

Crypto acted as safe haven amid SVB and Signature bank run: Cathie Wood

March 16, 2023 Coin Telegraph

ARK

Cathie Wood said the ongoing baking crisis is a total Fed policy failure and could have been averted with crypto’s decentralized solutions.

Amid all the chaos around multiple bank runs in the United States, Cathie Wood, CEO of asset management firm Ark Invest, said cryptocurrencies acted as safe haven amid the ongoing banking crisis in the US. She blamed the recent downfall of the likes of Silicon Valley Bank (SVB), Signature and others on the Fed’s policy failure.

Cryptocurrency prices shot up in double digits, with Bitcoin (BTC) and Ether (ETH) touching new multi-month highs amid the US banking crisis.

In a Tweet thread on March 16, Wood criticized the Federal Reserve’s inability to avert bank runs despite all the signs being there. She said she was “baffled that banks and regulators could not convince the Fed that disaster loomed.” She argued that the Fed policy was the primary culprit for the ongoing banking crisis since there was a venture capital funding drought.

Crypto did not force SVB and Signature into bankruptcy. In my view, Fed policy was the primary culprit. Because of a VC funding drought and higher yields on money market funds, deposits left the US banking system.
— Cathie Wood (@CathieDWood) March 16, 2023

Pointing towards the asset/liability mismatch, which, even normal in most circumstances for banks, was untenable in the current scenario as deposits left the banking system for the first time since the 1930s. Securities earnings for banks were only 1-2% against deposits paying 3-5%, which eventually became untenable as deposits started leaving the system. Like SVB, some banks were forced to sell HTM securities, recognizing losses that depleted their equity accounts.

She also reminded everyone that the ongoing crisis wasn’t forced by the cryptocurrency as the ecosystem has been under heavy scrutiny since FTX's downfall leading to a severe regulatory crackdown. Wood said that regulators are using crypto as a scapegoat for their own lapses in oversight of traditional banking.

If you are correct, Congressman, then the FDIC and others will prevent the US from participating in the most important phase of the internet revolution. Like you, I believe regulators are using crypto as a scapegoat for their own lapses in oversight of traditional banking. https://t.co/UDh3bwB2pB
— Cathie Wood (@CathieDWood) March 16, 2023

Wood has long been a known crypto proponent, often reflected in her company’s investment in emerging markets, especially crypto. She noted that the current banking crisis would not have been possible in the decentralized, transparent, auditable, and over-collateralized crypto asset ecosystem.

Wood projected crypto as a solution to the central points of failure, the opacity, and the regulatory mistakes in the traditional financial system. Made the scapegoat for policy mistakes, crypto will move offshore, depriving the US of one of the most important innovations in history

Coinbase still a buy for Cathie Wood: ARK buys its biggest batch of COIN in 2023

March 10, 2023 Coin Telegraph

ARK

Amid the crypto market facing another wave of panic, Cathie Wood’s ARKK keeps bagging record amounts of Coinbase stock this year.

Amid Coinbase (COIN) stock tumbling about 8% on Thursday, Cathie Wood’s investment manager ARK Invest has bought the biggest amount of the stock since the start of 2023.

On March 9, ARK purchased 301,437 Coinbase shares ($17.5 million) for its ARK Innovation exchange-traded fund, known as ARKK, according to an investor notification seen by Cointelegraph. The company has also bought 52,525 COIN shares ($3 million) for its ARK Next Generation Internet ETF, referred to as ARKW.

ARK’s latest investments in Coinbase make up the largest single COIN stock acquisition in 2023 so far, accounting for roughly 30% of all COIN purchases in 2023. The amount significantly exceeds ARK’s total COIN buys in January, or just about $13 million. In February, Wood’s investment firm bagged a total $42 million worth of COIN stock.

In addition to Coinbase, ARK has also been actively buying the Robinhood (HOOD) stock. On March 9, the company bought another 265,566 HOOD shares ($2.5 million) for its ARKK fund. The purchase came shortly after ARK packed similar amounts of Robinhood shares, buying 268,086 HOOD ($2.5 million) and 219,883 HOOD ($2.1 million) on March 8 and March 6, respectively.

The news comes amid reports suggesting that ARK has earned more than 70% of its $310 million fees since the ARKK’s price plummeted by 76% since its all-time high in February 2021. In 2023, ARK was earning an average of roughly $230,000 in fees a day as the fund’s value has slightly recovered, surging from around $30 in early January to $37.3 in mid-March.

*ARK Innovation ETF (ARKK) historical price chart. Source: TradingView*

The new ARK’s COIN buys further reaffirm the company’s bullish sentiment towards the cryptocurrency industry and Bitcoin (BTC). Focused on technology innovations like self-driving cars and genomics, ARK Invest founder Wood is one of the biggest crypto bulls in the world, believing that Bitcoin will hit $1 million in the not-so-distant future due its promising potential as a risk-on asset.

The latest bullish investments came despite the crypto market facing another wave of panic due to Silvergate crypto bank announcing plans to wind down operations and liquidate the bank. On March 10, Bitcoin dropped below $20,000 for the first time since early January.

Cathie Wood’s ARK Invest Doubles Down on Coinbase (COIN), Buys Another 139,000 Shares Amid SEC Crackdown

February 14, 2023 The Daily Hodl

Bitcoin Will Explode by Over 5,900%, Come Out of Bear Market ‘Smelling Like a Rose’: ARK Invest’s Cathie Wood

November 25, 2022 The Daily Hodl

$475M in Bitcoin options expire this week — Are bulls or bears poised to win?

August 10, 2022 Coin Telegraph

ARK

BTC futures data shows bulls are not sure that Bitcoin price will hold above $24,000, but range-bound action could help them profit from Aug. 12’s $475 million options expiry.

Bitcoin (BTC) has been posting higher lows for the past eight weeks, but during this time, BTC has not been able to flip the $24,000 resistance to support on at least three different opportunities. This is precisely why the $475 million Bitcoin options expiry on Aug. 12 might be a game changer for bulls.

Considering the current regulatory pressures in play, there seems to be a good enough rationale for avoiding bullish bets, especially after the U.S. Securities and Exchange Commission pressed charges against a former Coinbase manager for illegal securities trading on July 21.

The additional impact from the Terra (Luna) — now renamed Terra Classic (LUNC) — ecosystem imploding and subsequent crypto venture capital firm Three Arrows Capital (3AC) registering for bankruptcy continue to weigh on the markets. The latest victim is crypto lending platform Hodlnaut, which suspended user withdrawals on Aug. 8.

For this reason, most traders are holding back their bets above $24,000, but events outside of the crypto market might have also negatively impacted investors' expectations. For example, according to regulatory filings released on Aug. 9, Elon Musk sold $6.9 billion worth of Tesla stock.

Moreover, on Aug. 8, Ark Investment manager CEO Cathie Wood explained that the 1.41 million Coinbase (COIN) shares sold in July were caused by regulatory uncertainty and its potential impact on the crypto exchange's business model.

Most bearish bets are below $23,000

Bitcoin's failure to break below $21,000 on July 27 surprised bears because only 8% of the put (sell) options for Aug. 12 have been placed above $23,000. Thus, Bitcoin bulls are better positioned for the $475 million weekly options expiry.

*Bitcoin options aggregate open interest for Aug. 12. Source: CoinGlass*

A broader view using the 1.23 call-to-put ratio shows more bullish bets because the call (buy) open interest stands at $262 million against the $212 million put (sell) options. Nevertheless, as Bitcoin currently stands above $23,000, most bearish bets will likely become worthless.

If Bitcoin's price remains above $23,000 at 8:00 am UTC on Aug. 12, only $16 million worth of these put (sell) options will be available. This difference happens because there is no use in the right to sell Bitcoin at $23,000 if it trades above that level on expiry.

Bulls could pocket a $150 million profit

Below are the four most likely scenarios based on the current price action. The number of options contracts available on Aug. 12 for call (bull) and put (bear) instruments varies, depending on the expiry price. The imbalance favoring each side constitutes the theoretical profit:

Between $21,000 and $22,000: 70 calls vs. 4,200 puts. The net result favors bears by $90 million.
Between $22,000 and $24,000: 1,600 calls vs. 1,460 puts. The net result is balanced between bulls and bears.
Between $24,000 and $25,000: 3,700 calls vs. 120 puts. The net result favors bulls by $90 million.
Between $25,000 and $26,000: 5,900 calls vs. 30 puts. Bulls increase their gains to $150 million.

This crude estimate considers the call options used in bullish bets and the put options exclusively in neutral-to-bearish trades. Even so, this oversimplification disregards more complex investment strategies.

Futures markets show bulls are less inclined to show strength

Bitcoin bears need to pressure the price below $24,000 on Aug. 12 to balance the scales and avoid a potential $150 million loss. However, Bitcoin bulls got $265 million worth of leverage long futures positions liquidated between Aug. 8 and 9, so they are less inclined to push the price higher in the short term.

With that said, the most probable scenario for Aug. 12 is the $22,000 to $24,000 range, providing a balanced outcome between bulls and bears. Considering Bitcoin's negative 50% performance year-to-date, even a small $90 million win for bulls could be regarded as a victory, but that would require sustaining BTC above $24,000.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Cathie Wood’s Ark Invest Sells 174,611 Coinbase Shares Amid 85% Wipeout in the Crypto Exchange’s Stock Price

July 28, 2022 The Daily Hodl

Bitcoin mining to harness onsite natural gas emissions: Ark Invest

July 26, 2022 Coin Telegraph

ARK

A new report reveals an angle for sustainability in Bitcoin mining through harnessing onsite natural gas emissions.

Data from a recent Ark Invest report highlights another utility for Bitcoin (BTC) mining in the realm of sustainability and energy.

According to the findings, there is enormous potential to transform methane emissions into energy for Bitcoin mining, which, in turn, will turbocharge solar and wind-generated electricity at onsite wells.

Important research from @skorusARK on #Bitcoin’s potential role in transforming methane emissions into bitcoin mining that will turbocharge electricity generated by solar and wind. @skorusARK https://t.co/6cgxGHNcJZ
— Cathie Wood (@CathieDWood) July 26, 2022

Annual gas flaring emissions equal 140 billion cubic meters, along with an additional 125 billion cubic meters in annual methane emissions. Therefore, left untouched, this means 265 billion cubic meters of natural gas emissions are wasted yearly. However, an analysis of the methane needed for the current Bitcoin hashrate stands at only 25 billion.

While harnessing the entirety of the emissions is impossible due to the oil industry’s preexisting flaring operations investments, capturing methane is a viable and early solution. Ark Invest’s Sam Korus tweeted that over half of all vented methane occurs onsite at wells. This makes the location a prime spot for mining to capture such emissions and productively employ them.

Additionally, instead of the methane being vented, it would be able to generate electricity at rates far below what mining companies currently pay.

Recently the mining industry has been showing signs of increased energy efficiency and a pivot towards sustainability.

Last week the Bitcoin Mining Council released its Q2 review of the network. It revealed the industry’s use of sustainable energy is up 6% from the same quarter in the previous years. In conclusion to their findings, the council referred to Bitcoin mining as “one of the most sustainable industries globally.”

However, this has been an active effort to change on the part of the mining industry. Previously, environmentalists shamed the industry due to its unjustifiable carbon footprint.

Korus suggests that while there are other ways to harness methane, Bitcoin mining is an ideal option as “It is highly scalable with modular hardware that can be transported to and shifted among operating well sites.”

While the new data backs up these claims, they are not new. There are already companies actively doing so. Back in February, Cointelegraph spoke with Kristian Csepcsa, the CMO of Slush Pool, on how miners are aiding oil companies with flare reduction by running their generators on natural gas, which would otherwise be burned off.

Nonetheless, there are still skeptics. One Twitter user pointed out that the emissions in question are not naturally occurring. Rather, they are extracted via fossil fuel extraction, which due to climate change, is under pressure to be cut entirely.

@skorusARK U seem to be missing the big picture. We aren't talking about naturally occuring gas emissions, but emissions caused by extracting fossile fuels from the ground, right? This extraction has to stop completely in the next few years @fossiltreaty. That's the real solution
— siegfried.arweave.dev (@ZwigoZwitscher) July 26, 2022

As the industry continues to adapt to global sustainability standards, time will tell if such solutions will bring about the future of Bitcoin mining and energy production.

ARK

Bears made a mistake when BTC price dropped below $25,000

Bulls are in a good position to capture a $250 million profit

Most bearish bets are below $23,000

Bulls could pocket a $150 million profit

Futures markets show bulls are less inclined to show strength

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