The SEC has accepted BlackRock’s bitcoin ETF application and moved it on to the next approval stage. After this XRP announcement, the token’s price jumped over 25% from $ 0.45 to $0.61. These decisions, and many others to come, have led to more regulatory questions. However it is evident that rule changes play a major role in the volatility of digital assets.

You must be aware of how recent regulatory failures and current events affect the price and volume of bitcoin, ether, and alt-coins.

Below, Greg Magadini from Amberdata takes us through the crypto and regulatory events, and provides some analytical data on how these events affect prices and movement.

Can we also include crypto in our retirement funds? Bryan Courchese of Daim answered this week’s question on the subject.

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Macro state crypto – Where it’s been and where it’s going next

In 2022, Terra Luna’s collapse, 3AC’s bankruptcy as a crypto hedge fund, FTX’s scandal, and other meltdowns pushed industry into a Bear Market. These headlines often drove the entire industry lower, led by altcoins.

The first half of 2023, however, flipped many of these crypto-relationships on their heads as macroeconomic events flooded the news headlines.

Bitcoin drove crypto higher in the first week of January, as the Fed’s hawkish rhetoric began to soften. This move was accompanied with a positive “spot/vol”, where traders bought options as Bitcoin rallied.

The conclusion was that Bitcoin was trading on macro-economic news rather than crypto specific events.

Bitcoin is the “pure play” monetary alternative to Ethereum.

performance YTD of BTC, , and ETH

The SVB Banking Crisis in March made this narrative juxtaposition obvious.

When comparing the YTD spot price performance of BTC and ETH, it is clear that BTC has outperformed ETH as a reaction to the financial crisis and the Fed’s emergency response.

BTC has maintained this performance ever since.

Ratio YTD of implied volatility(ETH DVol divided BTC DVol).

We can also observe the activity of the option markets to see if there is a change in trading dynamics.

The ratio of deribit’s DVOL indices is a comprehensive measure of 30-day-to-maturity implied volatility of options (think VIX for BTC and VIX for ETH). It shows that the implied volatility premium between ETH and BTC has begun to diminish in response to macro events.

Mid-January, we began to see a Fed market adjustment that slowed down their hawkishness. BTC and BTC IV, (implied volatility), went up (charts go down).

In early February, we saw a significant outperformance tied to the monthly Non-Farm Payrolls (NFPs) number from the Labor Department. This immediately killed the idea that a Fed hawkish slowed down; BTC fell (alongside gold and other rate-sensitive assets), and BTC IV dropped, in relation to ETH IV.

The SVB crisis pushed BTC IV up again, but was temporarily halted by the ETH Shanghai Upgrade.

Even briefly, ETH IV is trading at parity with BTC IV.


What does this mean for the second half 2023?

The Fed is still in “wait and see” mode after the recent “rate skipping” that took place at their FOMC meeting in June. While other central banks are raising rates, the U.S. is fading into the background. Crypto-specific news stories have taken over the forefront of the public’s mind.

Binance, Coinbase, and XRP have become major drivers of the market.

BTC is classified as a commodity today, while ETH is classified in a more ambiguous manner.

It means that ETH’s “technology wager” narrative is more sensitive to regulation. ETH’s main value is derived from its use and the different DeFi, NFT, and ERC-20 protocol built on the Ethereum infrastructure.

The volatility around the consumer price index, the NFP, and other macro-events has settled, and regulatory clarity, a possible spot ETF approval, and the XRP Resolution are becoming the key focus. This paradigm shift could drive the market to higher beta “altcoins”.

Altcoins historically have outperformed BTC during bull markets. The second half of the year 2023 has started off with a bullish tone, accompanied so far by mostly positive crypto-specific headlines.

The fact that recent events have seen ETH IV increase in relation to BTC IV is a sign that option traders also pay attention.


– Greg Magadini CFA Amberdata

Ask an Expert


I assist clients in including crypto in their retirement plans.

– Bryan Courchesne, CEO Daim

Can advisors make crypto investments in their client’s 401K accounts?

You can invest in cryptos through a variety of retirement plans, from 401K plans and individual retirement accounts. You should first ensure that you’re speaking with a licensed investment adviser. Your Bitcoin advisor must be licensed as investment management is a highly regulated industry. Ask the advisor for their CRD number. Check Brokercheck.org for the advisor’s CRD number.

Can my clients hold cryptocurrency in these accounts or only funds?

Short answer both. Accounts could be held in pure crypto, a cryptocurrency futures fund (like GBTC), a trust product like COIN stock, or equities such as COIN stock, where the company has pure Bitcoin on its balance sheet. The main considerations in any investment other than pure crypto are the tracking differences and the different fee structures.

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Bradley Keoun is the editor.