LMAX Digital volumes got off to a hot start this week. Total notional volume for Monday came in at $1.7 billion, 37% above 30-day average volume.

Bitcoin volume printed just shy of the yard mark at $934 million, also coming in 37% above 30-day average volume. Ether volume impressed even more, coming in at $554 million, 45% above 30-day average volume.

Looking at average position size over the past 30 days, we’re seeing average bitcoin position size at $13,697 and average position size for ether running up to $6,655.

Volatility has been slowly picking up since finding a bottom in July. We’re now looking at average daily ranges in bitcoin and ether of $2,847 and $231 respectively.

We think a lot of the movement in crypto markets this week could have a lot to do with what happens in traditional markets. The Federal Reserve meeting is on Wednesday and global markets will be wanting to hear if the Fed will finally announce plans to begin tapering the monthly $120 billion in asset purchases.

While it’s true bitcoin has been, and should continue to be a formidable hedge against inflation risk, we also believe it’s possible bitcoin will suffer in the short-term if global equities come under pressure as a result of a more hawkish leaning Fed decision.

We believe this to be the case because we see bitcoin having benefitted from a market environment that has fueled excessive risk taking and investment in alternative products since 2009.

Bitcoin (and other crypto assets) is one such alternative product, and as risk comes off, this market that has also appreciated on the back of the risk on environment, will also fall victim to a period of risk off flow.

Of course, we also see this as price action that will offer tremendous opportunity to increase exposure to bitcoin and other cryptocurrencies into dips on the longer-term, compelling value proposition of these crypto assets.