- Ethereum may catch up and outperform Bitcoin due to the anticipated launch of a Spot Ethereum ETF.
- QCP Capital recommends strategic trades using Zero Cost ETH September Knock-In, Knock-Out (KIKO) options for high convexity exposure.
QCP Capital has highlighted strong upward movement in the cryptocurrency market, focusing on Bitcoin (BTC) and Ethereum (ETH). Their recent analysis notes a robust 15-day inflow streak for Bitcoin Exchange-Traded Funds (ETFs), indicating significant investor interest.
QCP Asia and London Colour – 5 Jun 2024
1/ #BTC spot ETF continues a 15-day inflow rampage with +$886.1m yesterday, the 2nd largest inflow since inception.
— QCP Capital (@qcpcapital) June 5, 2024
QCP Capital recommends a strategic trade to capitalize on the anticipated increase in Ethereum’s price. They propose using Zero Cost ETH September Knock-In, Knock-Out (KIKO) options for high convexity exposure to an Ethereum price rise.
QCP Capital proposes a tactical trade to capitalize on the forecasted increase in Ethereum’s value. They advise utilizing Zero Cost ETH September Knock-In, Knock-Out (KIKO) options for exposure to Ethereum’s price rise.
3/ ETH has been lagging on this move but we expect a catch up and possibly even outperformance against BTC when the ETH spot ETF begins trading.
There could also potentially be significant rotation from BTC ETF to ETH ETF, providing additional upward momentum for ETH.
— QCP Capital (@qcpcapital) June 5, 2024
This strategy includes a short put option at $3,500, which becomes active only if Ethereum’s price drops to $3,000 or below. In addition, there is a long call option at $4,000, which ceases if the price hits $6,400 or higher.
This configuration offers a possible annual return of 219.55%, or $2,400 per Ethereum, if the price is just under $6,400 at expiry. Nevertheless, the downside risk involves an obligation to purchase Ethereum at $3,500 if the price dips below $3,000.
Ethereum’s current trading price is around $3,700, aligning with QCP Capital’s optimistic forecast. This strategic recommendation aims to enhance profits while mitigating potential losses.
On June 4, Bitcoin ETFs recorded an inflow of $886.1 million, the second-largest since their introduction. This influx has coincided with increased activity in the options market, particularly in Bitcoin call options set to expire in June. These trends suggest strong bullish sentiment, with the BTC price potentially breaking its all-time high of $74,000 this month.
QCP Capital’s report suggests that market participants are preparing for a decisive move, showing confidence in Bitcoin’s continued upward trajectory. While Bitcoin has led this recent surge, Ethereum has been slightly behind.
Despite this, QCP Capital predicts that ETH could soon catch up and possibly surpass Bitcoin’s growth. The launch of a Spot Ethereum ETF is anticipated to drive fund rotations from Bitcoin to Ether, boosting ETH’s upward momentum.
