🌳 Bank Of Japan Ends Negative Interest Rate Policy; SEC Delays Decision On Ethereum ETFs

20 Mar 2024, Wednesday

2:39 AM

🌳 Bank Of Japan Ends Negative Interest Rate Policy; SEC Delays Decision On Ethereum ETFs



S&P Futures 500







Note: All percentages shown above are referenced to the previous business work day's 09:00 (GMT+8)

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What We Are Covering Today

  • BOJ shifts from negative rates to support growth; Renault counters Chinese EV dominance (More in Macro & TradFi)
  • SEC delays ETH ETF approvals; Advocacy groups file amicus briefs encouraging SEC to write out crypto rules (More in DeFi & CeFi)
  • Solana memecoin pre-sale frenzy drew $150M worth of capital in the last 7 days; BTC supply on CEXs continues to drop despite the selloff (More in On-Chain)
  • BTC term structure shows backwardation; Over $660M liquidated in the past 24H (More in Crypto Derivatives)
  • BTC at key support levels; ETH in oversold territory (More in Crypto Technical Analysis)

Macro & TradFi

The Bank of Japan (BOJ) ended its unprecedented negative interest rate policy, signaling a cautious shift towards normalization after years of aggressive monetary stimulus. By adjusting the policy rate to a range between 0% - 0.1% and ending its yield curve control program and purchases of exchange-traded funds, the BOJ has embarked on a careful path away from the ultra-loose financial conditions that characterized its approach since 2016. Despite this historic move, the BOJ provided little indication of further tightening, emphasizing a continued accommodative financial environment to support the goal of sustainable 2% inflation. This cautious stance resulted in the yen weakening past the 150 mark against the dollar, while Japanese equities, particularly the Nikkei 225, benefitted from the weaker currency. The decision reflects a broader global context where other major central banks are evaluating their interest rate policies, marking a pivotal moment in the BOJ's monetary policy trajectory. The lack of clear guidance on future rate hikes underscores the bank's delicate balance between fostering economic growth and controlling inflation, highlighting the uncertainties lying ahead in Japan's economic landscape.

Elsewhere, Renault's CEO, Luca de Meo, has urged the creation of a European "war chest" aimed to counter the rise of Chinese competition in the electric vehicle (EV) sector. This fund would support EV subsidies, secure raw materials, and facilitate joint infrastructure development. De Meo's proposition, outlined in a manifesto sent to European politicians, seeks a collaborative, continent-wide strategy to transition from combustion engines to electric vehicles. This includes advocating for shared investments in consumer subsidies, green economic zones, regional software, and semiconductor development. The initiative highlights the challenges European car manufacturers face, such as slowing EV sales growth amidst high inflation and the encroachment of more affordable Chinese EVs. This strategic pivot is presented as essential for Europe's automotive industry to navigate the transition to electric vehicles and maintain competitiveness on the global stage.

US stocks advanced yesterday in anticipation of the Federal Reserve's interest rate decision, showcasing a strategic positioning by traders. The S&P 500 index saw a 0.56% rise, while the Nasdaq Composite index slightly outperformed with a 0.26% increase, buoyed by significant gains in the technology sector. Notably, the Dow Jones Industrial Average also climbed, marking a 0.83% uptick. Standouts included APA Corp and Baker Hughes, registering gains of 2.47% and 2.56% respectively, alongside Nvidia, which rose by 1.07% after announcing its new AI chip lineup at its annual developer conference. Market participants are keenly awaiting the FOMC interest rate verdict, due tonight at 02:00 SGT, and Chair Powell's subsequent press conference at 02:30 SGT. Despite expectations for the Fed to maintain rates, the focus shifts to its economic forecasts and anticipated rate cuts for the year, underlining the significance of its future monetary policy direction on market sentiment and investment strategies.

CeFi & DeFi

  • SEC delays ETH ETF approvals
  • Advocacy groups file amicus briefs encouraging the SEC to write crypto rules
  • BlackRock Creates Fund With Securitize, a Big Player in Real-World Asset Tokenization
  • Bitcoin Flash Crashed to $8.9K on BitMEX
  • Citi and Brazilian Development Bank Join Hyperledger Foundation

The SEC postponed its decision on Hashdex and ARK 21Shares proposed spot Ethereum exchange-traded funds (ETFs), but both ETF applications will face a final decision in late May. This pushback has resulted in diminishing chances of approval from the eight currently proposed Ether ETFs from BlackRock, Grayscale, Fidelity, Invesco Galaxy, VanEck, Hashdex, and Franklin Templeton. Bloomberg ETF analyst James Seyffart predicts ETH ETFs are unlikely to receive approval in May, citing a perceived lack of engagement from U.S. regulators with potential issuers. Seyffart, who previously assessed a 35% chance of approval in May, now believes that ETH ETFs will be denied by the SEC on May 23rd. 

In other news, several advocacy groups, namely the Crypto Council for Innovation (CCI), Satoshi Action Fund, Texas Blockchain Council, investment firm Paradigm, digital asset company Lejilex, and the U.S. Chamber of Commerce have filed amicus briefs in support of an appeal by Coinbase, appealing to the SEC for clarity on rules with regards to the crypto industry. The current lack of clear guidelines by the SEC imposes uncertainty on potential digital asset companies and investors, causing them to steer away from the US altogether. This support by multiple organizations shows the urgent need for clarity on rules and regulations regarding digital assets if the industry were to progress further and abide by proper conduct set forth by the SEC.


Meanwhile, analysis on @cryptoquant suggests that the recent market sell-off may not necessarily mark the end of the bullish phase. Several key indicators, including MVRV and MPI, have not shown signs of a reversal during the downturn. Notably, centralized exchanges have largely experienced consistent net outflows daily, with the total supply of BTC on exchanges steadily decreasing. Currently, the supply of BTC on exchanges is nearly 40% lower than it was, four years ago, indicating a growing preference for self-custody and a reduction in selling pressures on centralized exchanges despite the recent downturns.

Meanwhile, another analysis on @cryptoquant reveals that nearly 50% of Bitcoin's Realized Cap is now owned by short-term holders, indicating a significant increase in enthusiasm and accumulation among new investors following the recent price surge. Despite a notable decrease in Bitcoin's price since last Friday, the dominance of short-term capital in the market has remained strong, suggesting a persistent bullish sentiment among investors. It is imperative to closely monitor the behavior of short-term holders and the potential impact of their movements on the Bitcoin market in the days ahead.

Crypto Derivatives

  • Funding rates remain positive for both BTC and ETH.
  • Deribit Implied Volatility Index (DVOL) for BTC and ETH increased to 76.41% and 83.15%, respectively.
  • The 30-day 25-delta skew (C-P) for BTC and ETH increased slightly to 0.38% and -4.53%, respectively.
  • The futures market witnessed $664.08M in liquidations, with longs representing 75.60%.

Top 3 USDT Perpetual Funding Rate Arbitrage Opportunities

Net Annualized APR

Perp (USDT pair)

Long on

Short On














1) Pairs observed include BTC, ETH, SOL, BNB, XRP, LTC, and DOGE vs. USDT perps. 

2) CEXs observed include Binance, Bybit, OKX & dYdX.

3) Lookback period is 24 hours.

Bitcoin's 7-day and 30-day ATM Implied Volatility (IV) is currently at 78.07% and 73.77% respectively, a slight increase from yesterday. The 7-day IV continues to track the 30-day IV, indicating the market's short-term volatility expectations are similar to those over the next month possibly due to anticipation of BTC’s halving. The spike in the 7-day IV over the past day is likely due to BTC’s decline in spot price yesterday.

Today’s term structure of BTC presents a backwardation shape. This is characterized by the higher IV in the short-term contracts compared to the longer-term, which is a reversal from yesterday’s contango shape. This backwardation may suggest that the market is expecting more immediate volatility for expiries over the 1-day period, potentially due to the FOMC interest rate decision due tonight.

Looking at today’s BTC’s 25 Delta skews (C-P) for both the 7-day and 30-day maturities, there is a noticeable divergence between both, with the 7-day skew dipping below the 30-day. This divergence suggests a shift in market sentiment where the volatility expectations are further apart in the short-term and medium-term. The decline in the 7-day skew could be attributed to a decrease in demand for short-term protective puts, perhaps due to the market pricing in less immediate risk following yesterday’s price action.

Lastly, during the Americas Trading Session, @Paradigm reported significant BTC options trades that included a 300x Call Calendar for 29-Mar-24 and 26-Apr-24 at $68K and $70K bought, a 300x Call for 26-Apr-24 at $67K, a 200x Call for 31-May-24 at $73K and another 200x Call for 26-Apr-24 at $70K. Switching to ETH, the session saw a significant 20,000x Put for 26-Apr-24 at $2.6K, a purchase of a 10,000x Put for 26-Apr-24 at $3.2K, a 5000x Put Spread at $3.1K and $2.5K, and a 4000x Call for 26-Apr-24 at $4K.

Crypto Technical Analysis

In technical analysis, BTC retraced to $62.2K and is currently at the support range between $61.5K and $62K levels. This support level was previously present on March 6th, emphasizing its significance as a key support level. If the price of BTC were to breach this support level, the next immediate support region lies at the $50.5K level, which was present from 17 to 26 February 2024, implying a potential 18.8% decline from the current price. Conversely, should the BTC price rebound from this support level, resistance is established between the $68.5K to $70K levels. BTC's RSI is nearing the oversold level of 30, currently resting at 31.79, suggesting a bearish momentum. This indicates the potential for price appreciation if traders deem BTC to be oversold or further descent if bearish pressures persist.

Moving to ETH, its price breached the pivotal support level at $3.4K, currently priced at $3.1K and forming a descending channel pattern. Going forward, ETH may fluctuate within this channel, and should ETH break below this trendline, there's a possible descent to the next substantial support around $3K, representing previous resistance levels in February and denoting a 4.7% decline from the current price. On the flip side, should Ethereum rebound to break above the channel, we may encounter resistance at $3.8K. The RSI is currently in oversold territory at 27.20, suggesting a bearish momentum is at play. This also represents a potential opportunity for traders for a bullish price action reversal.

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