Arthur Hayes Profile picture
Aug 11 7 tweets 1 min read
1/ An interesting observation about the current $ETH futures term structure.
2/ The curve is in backwardation, that is futures < spot, out until Jan '23. My guess is because traders are hedging out $ETH exposure pre-merge just in case ... tech is hard. Image
3/ If the marginal pressure is on the sell side, then the market makers are long futures, and must short sell spot to hedge themselves. This adds downward price pressure to the cash or spot market.
4/ But what happens if the merge is successful, and hedgers cover their shorts so they are net long $ETH again? And what if speculators who believe in a "triple-halving" yolo into leveraged long positions?
5/ Now the pressure is on the buy side, and market makers are short futures and must go long spot. A reversal of their positioning pre-merge.
6/ This is a positive feedback loop that leads to higher spot prices should the merge go smoothly on Sept 15th.
If you believe the merge is going to succeed, then this is yet another positive structural reason why $ETH could gap higher into the end of the year.

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More from @CryptoHayes

Jul 22
This article is so amazing I don't even know where to begin. Let's dig into this beauty of an interview with Su Zhu and Kyle Davies.
Common y'all. Su ain't flashy, he rides his bike to work and to the marina where his superyacht is moored.

ONLY 2 homes, brah you straight slumming it in the Kampong aka Tanglin. Image
Take it back!! As someone who loves the clerb, I take offense to this. Image
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Please don't believe @GoldmanSachs is putting their own money at risk unless they explicitly say so.

GS is doing what advisory banks do, assemble a bunch of investors, and help them structure the purchase of distressed assets for a phat fee.

If this vehicle actually purchases assets from @CelsiusNetwork , and withdrawals are enabled once more, then the community can rejoice that creditors got some of their money back. That would restore confidence and provide more dry powder for a #Cryptocurency bull run.
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Jun 19
Beware of the forced seller ...

An interesting stat someone pointed out to me.

BTCC - Purpose ETF puked 24,500 $BTC into the North American Friday close. I'm not sure how they execute redemptions but that's a lot of physical BTC to sell in a small time frame.

Over the weekend, while the fiat rails are closed, $BTC dropped to a low of $17,600 down almost 20% from Friday on good volume. Smells like a forced seller triggered a run on stops.
Read 5 tweets
Jun 14
Here we go ...


Looking at onchain data for $wBTC and $ETH, the liquidations have mostly happened. Data visualization from @parsec_finance
@parsec_finance 2/

Now let's focus on the listed and unlisted options flows. Looking at @DeribitExchange , most of the OI is at $20k and $1k for $BTC and $ETH respectively. We can also assume that there are massive otc structured products centered around those strikes as well.
@parsec_finance 3/

If you are short a put, you must sell spot to hedge your delta. As you approach the strike, the short delta increases non-linearly. That is called gamma. This means the closer we get to the strike, the more has to be sold.
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