Trading Desk Insights
BTC pressed higher overnight, tapping $108,000—just 1% off all-time highs—after already printing record closing levels earlier this week. Open interest matched the December 2024 peak before fading alongside a 1.5% pullback in price and a notable drop in volume. Despite the cooldown, spot volumes are ticking up, and funding rates have reset back to last weekend's levels, suggesting a healthier market structure.
On-chain and ETF flows continue to support the bullish bias. The combined market cap of USDT and USDC hit a new high of $151B, up 9% from the $139B average seen over Dec–Jan. This surge in stablecoin liquidity adds significant dry powder for further risk deployment.
Derivatives positioning leans bullish. The call/put open interest ratio touched 1.55 over the weekend, while out-of-the-money call premiums rose broadly—signs of traders betting on further upside. Notably, market makers are short gamma around the $110K strike, which could exacerbate moves if we break through. That said, overall futures positioning remains clean, with low funding rates indicating no signs of excessive leverage or euphoria—unlike the December run-up.
XRP futures saw strong demand on CME, with over $19M in notional volume on launch day and another $10M the following session. The product is viewed as a precursor to a possible U.S. spot XRP ETF approval.
Macro risks are creeping back in. U.S. yields inched higher as traders weighed the potential inflationary impact of the latest tax-heavy budget proposal. Meanwhile, Japan’s 30Y yield is pushing 3.2% and its 10Y just broke above 1.53%—a 16-year high (excluding the March 2025 spike). In the U.K., a surprise CPI beat sent 10Y gilt yields to 4.8%, nearing the critical 5% level. The global rate backdrop is shifting again, raising the odds of increased volatility across risk assets.
The News Room
Texas Advances Toward Establishing a State-Level Bitcoin Reserve
Texas is on the verge of becoming the first U.S. state to establish a government-backed Bitcoin reserve. Senate Bill 21 (SB 21), which proposes the creation of a Strategic Bitcoin Reserve (SBR), passed its second House reading with a strong bipartisan vote of 105 to 23 on May 20. The bill now moves to a third reading, after which it could be sent to the Governor for approval. If enacted, this legislation would position Texas—boasting a $2.6 trillion economy, the eighth-largest globally—ahead of other states like New Hampshire and Arizona in adopting Bitcoin at the state level.
Bitcoin Whale Initiates $830 Million Long Position on Hyperliquid
A prominent crypto investor, James Wynn, has made headlines by opening a substantial long position on the decentralized derivatives exchange Hyperliquid. On May 21, Wynn initiated a 40x leveraged long position totaling 7,764 BTC, valued at approximately $830 million, with an entry price of $105,033. His liquidation level is reportedly set just below $100,330. This move represents one of the largest long positions ever recorded on the platform, occurring as Bitcoin approaches new all-time highs amid record ETF inflows.
Sovereign Entities Seek Indirect Bitcoin Exposure Amid Regulatory Constraints
Facing regulatory challenges, sovereign entities are increasingly turning to indirect methods to gain exposure to Bitcoin. According to a report by Standard Chartered, these entities are investing in stocks of companies like Strategy (formerly MicroStrategy), which hold significant Bitcoin reserves. This approach allows them to bypass direct investment restrictions while still benefiting from Bitcoin's potential upside. The trend underscores a growing institutional interest in digital assets, even amid complex regulatory landscapes.
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This research is for informational use only. This is not investment advice. Other than disclosures relating to Secure Digital Markets this research is based on current public information that we consider reliable, but we do not represent it is accurate or complete, and it should not be relied on as such. The information, opinions, estimates, and forecasts contained herein are as of the date hereof and are subject to change without prior notification. We seek to update our research as appropriate.
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