Extremely speculative hypothesis:
1. BITO hits BTC futures position limits and the CME doesn’t make an exception. (Big *if*)
2. BITO must rotate to longer dated contracts to outrun the limits. That increases their portfolio’s duration and blows out contango across the curve.
1. BITO hits BTC futures position limits and the CME doesn’t make an exception. (Big *if*)
2. BITO must rotate to longer dated contracts to outrun the limits. That increases their portfolio’s duration and blows out contango across the curve.
3. Higher cash-and-carry on the CME futs sucks out capital from the basis trade on perps at FTX and Binance. That blows out the basis in altcoin perps.
4. Attracted by higher carry, crypto native basis traders sponge up all available DeFi capital to finance leverage
4. Attracted by higher carry, crypto native basis traders sponge up all available DeFi capital to finance leverage
5. That blows out the yields in DeFi. First from direct demand for lending. But second from higher liquidity fees from a frenzy of activity.
6. Already high DeFi yields blow out, attracting significantly more capital to the space. TVLs pump hard across the board.
6. Already high DeFi yields blow out, attracting significantly more capital to the space. TVLs pump hard across the board.
7. DeFi token season. Major DeFi tokens go from being the most underperforming sector of this rally to surpassing their April ETH denominated highs.
• • •
Missing some Tweet in this thread? You can try to
force a refresh
