I. Market Determination
Local time on May 4, the Federal Reserve announced a 50bps interest rate rise and the upcoming implementation of a specific tapering plan, which announced the end of the Expansionary policy since the epidemic, and entered the begin of Contractionary policy.
Specific tapering plans:
1. Reducing Treasury holdings by $30 billion per month for the first three months starting in June, then rising to a reduction of $60 billion per month.
2. Reducing Federal Debt and MBS holdings by $17.5 billion per month for the first three months starting in June, then rising to a reduction of $35 billion per month.
That said, since June to August, the Federal Reserve has been reducing its holdings assets with a pace of $47.5 billion per month, with figure rising to $95 billion per month after September to handle the worst inflation situation in 30 years currently undergoing. This level of tapering is also the largest ever, compared to $50 billion/month in 2017-2019.
The capital and cryptocurrency markets are in agreement on the Federal Reserve’s rate rising and tapering, as the market experienced a soar after the announcement of the dovish raised interest rate and the specific tapering plan. And after digesting the post-information impact on Friday, it returned to the downtrend. Such a dead cat bounce market can be seen as the last escape before the long-term bear, which is suggesting a consensus – traders have planed to go thought a bearish market in the future.
Downturns may not be so smooth either. In the cryptocurrency market, traders often use high leverage to trade spot and derivatives, and retail investors can easily be liquidated of the market by a sharp rise and fall. So what is the best strategy in a market like this?
The author has found some products on metalpha that are suitable for bear market purchases, where the Shark-Fin products under USDT will protect principal and provide potentially high returns in volatile markets. The metalpha has also recently launched a bearish Shark-Fin product under USDT, which fits the current market condition very well.
II. EUR USDT Shark-Fin Product
Shark-Fin product under EUR USDT is a financial product that offers a guaranteed base yield (3%) and is able to provide investors with a high yield, which is particularly suitable for the current market environment. Investors select the price range of the future product target as a criterion for determining the excess return:
i. If the underlying price is outside of the target price range of the investors, the investors receive the full principal amount on the settlement date plus a 3% risk-free interest rate return. This process is equivalent to buying a US Treasury bond over the same period, considering that US Treasuries are in high demand in the current market!
ii. If the underlying price is within the target price range of the investors, investors receive up to 25%+ annualized return on the settlement date (please refer to the current product description for details). It is difficult to have access to capture alpha returns in a volatilile market conditions, and the USDT Shark-Fin products own this trait.
Bearish EUR Shark-Fin Returns Example Chart:
Besides that, the product is set for a maturity period of 14 days/30 days and the price range can be set at 20-30%. Products with such maturity period and price range are set to give professional investors the maximum probability of gaining excess market returns after analyzing the available information. Certainly, in addition to professional investors, the high range of price ranges provides a very good means of contact to observe the feedback of the market for RETAIL investors who are new to investing in the cryptocurrency market, as they will not suffer any loss of principal in case of wrong judgement.
Considering the product characteristics of the European USDT Shark-Fin, the author believes that this product will allow investors to avoid the liquidation in the current high market fluctuations. It allows investors to preserve maximum capital in a bear market where Cash is King and to prepare for the next bull market in the crypto markets with the most advantageous capital amount.
The author has also been aware that for professional investors with large amounts, Metalpha offers a DIY Shark-Fin service. Investors may contact the customer service team and Metalpha will provide the investors with a quote based on the investment time period and price range decided by the investors.
Comparative analysis of SharkFins
III. How to Purchase
Metalpha launches a new issue of european USDT Shark-Fin product every Friday, with a fundraising period of 7 days each. The suggested time to invest is Wednesday and Thursday, after which there is an option to reinvest so as not to waste any day compounding interest. The variable parameters for each launch of the total products are puts/calls, btc/eth, and 14 days/30 days, which provides the most majority of investors with the varied investment target.
Investors may purchase Metalpha Shark-Fin by the following steps:
· Download the application via google play/apple store by searching for Metalpha;
· Register as new user and pass kyc certification;
· Deposit as per the address indicated by the app, the recommended USDT for the TRC-20 chain;
· Choose and invest on suitable EUR Shark-Fin products based on market determination;
· Wait for settlement and receive returns;
· Select a new issue for reinvestment.
The process of monetary policy transition is the most unpredictable time for the market. In a cycle of intense fluctuation and a bearish turn in the market, the author believes that the launch of metalpha’s European USDT Shark-Fin products would safeguard the principal assets of investors and guarantee a potential return while not undercutting the yield of US Treasuries.
（The author’s views are for reference only and do not form an investment advice. Please learn about the products carefully before purchasing and invest after risk assessment!）
Registration link： https://invite.metalpha.finance/code
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