Alibaba and 6 IPOs
Crypto Market Week in Review (31 March 2023)
Markets
This week markets were in a risk-on mode thanks to the merger of Credit Suisse and UBS the last weekend, effectively a bailout of one of the global systemically important banks. Stocks advanced and bond prices modestly declined.
A star of the week was Chinese tech giant Alibaba, which rallied by 19% this week after announcing the plan to split its business into 6 main units and pursue an IPO for the new units. Most importantly, the news showed that the Chinese government again became friendly to tech businesses. That supported a broad range of China-related assets, including other Chinese stocks, metals, and so on.
Major cryptocurrencies continued to slowly grind higher. Both Bitcoin and Ethereum were up by about 2% since the last Friday but largely remained at the same levels as two weeks ago. XRP (Ripple) skyrocketed by 26% this week, continuing a rally on optimism that the company will win its legal battle with the SEC. The nature of the legal battle is relevant for most other cryptos too (i.e., whether crypto is a security or a commodity in legal terms).
XRP/USD
The implied volatility of both Bitcoin and Ethereum remained flat (as measured by DVOL indexes). Bitcoin option open interest stopped rising, stabilizing at a historical high. There is a lot of open interest in Bitcoin options maturing today (March 31), so we wonder if holders of these options will roll their exposure and how it affects implied volatility.
Bitcoin option open interest by the expiration
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