Why this report matters

Circle has now gained +103% since our February 20 report, with the rally largely driven by the significant hedge fund short positioning we identified at the time. A week later (on February 27), we recommended the $75,000/$80,000 Bitcoin call spread ahead of the March 27 options expiry, as our market structure framework suggested a rebound was increasingly likely. That trade has since returned +155%, as Bitcoin has surprised many traders who were either complacent or lacked the necessary data to anticipate the move.

At the same time, we began shifting part of our positioning toward delta-one proxy equities with higher upside volatility, notably MicroStrategy (see Trading Signals), Metaplanet, and Bitmine (see CIO Strategy report). With overall trading volumes still relatively low, we believe this is not the moment to allocate heavily to crypto service providers, which are now trading close to fair value in our frameworks, with Coinbase being a notable example.

Instead, we continue to favor direct crypto exposure, either through proxy companies or through Bitcoin itself via options, spot positions, or perpetual futures. So far, these trades are working as expected. Importantly, Bitcoin is now approaching our initial $75,000 target, raising the key question of where the next move for Bitcoin, and the broader crypto market, may lead.

Ethereum (LHS) vs. Most Active ETH Option traded (RHS, $mln)