LMAX Digital volume recovered on Tuesday after a cool start to the week. Total notional volume for Tuesday came in at $818 million, on par with 30-day average volume.

Bitcoin volume printed $392 million on Tuesday, 11% below 30-day average volume. Ether volume came in at $373 million, 28% above 30-day average volume.

Looking at average position size over the past 30 days, we’re seeing average bitcoin position size at $9,364 and average position size for ether at 6,015.

Volatility has been trending lower in 2022. We’re now looking at average daily ranges in bitcoin and ether of $1,943 and $193 respectively.

There’s been a lot of talk around the correlation between bitcoin and risk sentiment. And while we have acknowledged this to be relevant in the short-term, we think this to be less relevant looking out.

But there is another correlation worthy of some focus that hasn’t been getting as much attention – that correlation being the one between bitcoin and gold. If anything, bitcoin’s properties as a limited supply asset make it more similar to gold and we expect this to translate to a stronger relationship as we move forward.

The other day, we saw evidence of this correlation, with stocks trading lower, all while bitcoin traded in the opposite direction, finding plenty of demand despite the risk off flow. And on that day, gold was also shooting up to fresh multi-month highs.

It makes sense to see gold being used as a hedge against both inflation risk and geopolitical risk. It also makes sense to see bitcoin doing the same. And with many out there expecting inflation to keep running hot, this should invite more demand for these assets.

We’ve also highlighted increased interest amongst portfolio managers to take some of their overall gold exposure and move it into bitcoin. The risk to reward here is highly compelling and we expect to see more of this going forward.