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  • Spot has recovered most of Friday's losses, with the 5% drop in BTC to 60k on Friday triggered by hawkish Fed comments.
  • We think price action could chop around here as the market digests fundamentals from the several macro events lined up this week:
    • Tue: US PPI, Powell to speak
    • Wed: CPI, Retail Sales
    • Thu: Unemployment Claims
  • Given the strong bounce from last week's lows, 60k still seems like a strong support level barring any hawkish surprises (BTC risk reversals are at neutral levels).
  • Overall, the desk still remains structurally bullish BTC even as spot continues to consolidate here while the market gets more clarity from the Fed.
  • Options flows today saw buyers of BTC Jun topside (65k) and BTC Dec topside (90k-100k strikes).

Trade Idea:

With Spot-Forward Basis yields still in the single digits, you can still generate decent >20% yields from UFCCs (Unconditional Fixed Coupon Convertible). Indicative example below:

BTC UFCC (USD deployment)

(spot ref: 63,000)

Earn a weekly coupon of 22%pa.

At expiry, as long as BTC spot is above 50k, 100% of the principal is returned.

If BTC spot is below 50k at expiry, you will buy BTC at 55k level.

Maturity: 12JUL24 (8 weeks) Strike: 55,000 Protection Level: 50,000 Coupon Rate: 22% p.a.

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