Can Do Better

“The SEC can do better”.

That’s taken directly from the SEC’s newest statement, announcing the launch of a cryptocurrency-dedicated task force, led by Commissioner Hester Peirce – also dubbed as “Crypto Mom” and known for her dissent against the previous SEC administration’s enforcement over crypto companies.

What is the role of the task force? Regulate the crypto industry with “comprehensive and clear” frameworks for digital assets. The group will also work alongside other federal agencies including the Commodity Futures Trading Commission (CFTC). 

On Monday, President Trump’s inauguration turned out to be a ‘buy the rumour sell the news event’. However, following a brief dip in prices across the board, the SEC task force news has bolstered the market again: BTC is holding close to the $105K mark and ETH is up slightly on the day. 

Derivatives markets are slightly more subdued, though still bullish – implied vol smiles’ skew for BTC options are not as strongly skewed towards OTM calls as we saw in the past few days.

Volatility expectations have not recovered to the pre-inauguration highs. Implied volatility levels across tenors have fallen fast – see BTC’s implied vol for the one-month tenor, which has dropped 10 points (see below). The term structure however is still yet to steepen completely and currently remains flat.

The flattening term structure and falling front-end vols belie the highest level of realised volatility that we’ve seen since before even the U.S. election.

Various new crypto ETFs have also been filed since Gary Gensler resigned from the SEC Chair position. These include 7 new filings from ETF issuer’s REXShares including a TRUMP, DOGE, and BONK ETF (along with BTC, SOL, XRP and ETH). Talks of a Solana ETF approval have long been on the cards with many of the existing SOL ETF filings approaching the first deadline for the SEC to approve or reject them (Jan 25th). Since its August low, Solana has more than doubled in price, bolstered by significant on-chain trade volume and token launches.

Trump’s memecoin token is one such example and has already fallen from its ATH of $73 down to $42 currently, so it remains to be seen how popular ETFs on assets as volatile as memecoins will be. Finally, in DeFi news, Uniswap labs announced the rollout of Uniswap v4, with full deployment of the upgrade to be ready by next week.