Market Update – 30 Jul 23 (Accumulators!)

BTC and ETH continue their nonchalance to any macro headlines or market moves. Correlations with traditional macro drivers like the USD and equities have declined to almost zero (Chart 1 and 2).
Chart 1
Chart 2

The market has been trading soft and sideways since the surge around the XRP ruling earlier this month. Contraction in the fringe sectors (NFT, DeFi) and consolidation in the industry also continues.

However, the market is expecting a spike in volatility and possibly a large price increase in BTC towards the end of the year and into next year with the Blackrock spot ETF ruling as well as the Bitcoin Halving.

We see this from the very steep vol curve (Jun 2024 vols are almost double Aug 2023 vols with a 24.5 vol spread!) as well as a persistent call skew (BTC calls are almost 3 vols higher than puts).

In spite of this sideways market, a strategy or product class that has performed significantly well has been Accumulators, especially for investors looking to build a long coin into the next bull run.

In a nutshell, the Accumulator is a zero-cost strategy suitable for professional and or accredited investors only (not retail) that allows one to buy BTC or ETH on a weekly basis, at a 10% discount to spot price (at time of trade) as long as spot price trades within a pre-specified range.

If spot price trades outside of the range, >10% above spot price, no purchase is made and the collateral is returned. If spot trades >10% below spot, additional coin is purchased at the 10% discount-to-spot price.

In a medium-term range market with a bullish long-term bias such as this, Accumulators are perfect to systematically buy coin at a discount before the big move without catching bad levels in a gappy intra-day market.

This is a strategy that institutional, accredited and or professional investors use to build coin balance before the big price moves.

A trade put on last month at 26.6k and 1,750 spot ref for example, has allowed the investor to keep buying coin weekly at 24k and 1,570, as long as BTC and ETH trade below 30k and 1920 for the week such as now.

We think the conditions to put on such a trade now are even better than last month – at current spot ref the investor can be delivered coin at ~26.5k and 1680 weekly for up to the next 20 weeks.

And should a large move come before then, it would be possible to restructure the trade once again to capitalize on that.

More from our Library


This information contained in this website is intended as a general introduction to QCP Capital and its activities as a Digital Payment Token (DPT) service provider and is for informational purposes only.

QCP Capital is not acting and does not purport to act in any way as an advisor or in a fiduciary capacity vis-a-vis any counterparty. Therefore, it is strongly suggested that any prospective counterparty obtain independent advice in relation to any trading investment, financial, legal, tax, accounting or regulatory issues discussed herein. This website is only directed at informed and qualified investors. Your entry to this website attests that you are fully aware that trading of DPTs is not suitable for the general public and that you are an informed and qualified investor, and are also fully cognisant of all technological and financial risk(s) associated with trading Digital Payment Tokens.

In the event you intend to onboard with QCP Capital to trade in DPTs, by onboarding with us you acknowledge that you are aware of any rules and/or regulations applicable to the provision of DPT and/or financial services, the high degree of risk involved and that in no event will QCP Capital or any if its directors or employees be liable for any injury loss, claim or damage (whether direct, indirect, consequential or incidental) arising either directly or indirectly out of, or in any way connected with, the site, or its use.

If you are located, incorporated, or otherwise established in, or a citizen or resident of certain jurisdictions, QCP Capital may be unable to, or otherwise reserve its right to refuse to engage in or establish a trading relationship with you. Please contact us if you believe you have received this notice in error. QCP Capital is not registered or licensed to operate in the states of Louisiana and New York and will not be able to establish a trading relationship with you if you are resident, incorporated or have your principal place of business in New York or Louisiana.

You also acknowledge that you understand that trading in payment token derivatives (“PTD”) are also not any less risky than trading in DPTs. PTD services are not regulated by the MAS and QCP Capital is as such not licensed under the MAS to provide PTD services. You should only trade in PTDs if you are an Accredited Investor and/or have sufficient experience and knowledge in trading PTDs.

Risk Warning on Digital Payment Digital Services

The Monetary Authority of Singapore (MAS) requires us to provide this risk warning to you as a customer of a digital payment token (DPT) service provider.

Before you pay your DPT service provider any money or DPT, you should be aware of the following. 

Your DPT service provider is an exempt payment services provider pending licensing under the Payment Services Act (2019) to provide DPT services. Please note that this does not mean you will be able to recover all the money or DPTs you paid to your DPT service provider if your DPT service provider’s business fails.

You should not transact in the DPT if you are not familiar with this DPT. This includes how the DPT is created, and how the DPT you intend to transact is transferred or held by your DPT service provider.

You should be aware that the value of DPTs may fluctuate greatly. You should buy DPTs only if you are prepared to accept the risk of losing all of the money you put into such tokens.

You should be aware that your DPT service provider, as part of its licence to provide DPT services, may offer services related to DPTs which are promoted as having a stable value, commonly known as “stablecoin”.