Liquidity rushing back into risk assets, says QCP Capital

QCP Capital analysts expect increased liquidity in high-risk assets.

According to a report dated Feb. 16, experts will remain optimistic as liquidity flows back into risk assets. At the same time, inflation, stable at more than 3%, remains a downside risk and will also mean increased market volatility.

“For investors who are still bullish but are starting to be downside defensive at these levels, we provide an Upside Participation Structure (UPS) which gives 100% protection on the principal investment amount but uses the yield for a leveraged upside bet.”

Analysts note that the recent increase in CME margin requirements has become an essential trigger for volatility. In this case, leveraged players found themselves short, and the new requirement led to widespread short covering during the relatively illiquid Lunar New Year weekend. This led to an increase in both spot and forward prices.

“The forward spread trade in BTC is now back to around 11-12% ann.”

Earlier, QCP Capital stated that the active formation of positions on call options with strikes from $60,000 to $80,000 and the rush demand for ETFs could push Bitcoin (BTC) to ATH as early as March. QCP Capital explained the dynamics of the options market and the breakout above $50,000 by increased demand for spot ETFs.

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