Crypto Risk Appetite Report 15th January 2026

Weekly Recap of Market Sentiment

Summary

• Since the tail-end of 2025, BTC had traded in a long period of sideways consolidation between $85K and $95K, only to aggressively break out of that regime and touch $97K yesterday evening. Rallies in spot price have historically been preceded by a rebound from below the -1 threshold in our Risk-Appetite Index. Year-to-date BTC is up 10.76%, while ETH is up 13.28%, dragging a slew of sentiment-related derivative market indicators up with it: funding rates briefly rose past 0.02% for BTC and ETH earlier this week, futures-implied yields for short-dated BTC futures traded with a more than 10% premium over spot price, and short-tenor volatility smiles currently trade at close to neutral levels (from previously bearish put premia).

• While risk appetite across the broader altcoin market naturally rises with gains in BTC, the past week has seen a slew of altcoin and sector specific factors contributing to more positive market sentiment. BTC Spot ETFs registered their largest daily inflows since the October 10 liquidation event in derivatives markets, while Spot ETH ETFs have registered YTD inflows of $416.1M. Around 36M ETH is currently being staked, equivalent to nearly 30% of circulating supply – a high last seen in July 2025. An additional 2.5M ETH is currently in the validator entry queue, levels of demand we last saw in August 2023. Beyond that, specific altcoins have benefited from idiosyncratic factors: LINK is up 6% over the past week after news that Bitwise’s Chainlink ETF, the second LINK-based Spot ETF to trade in the US, went live on Wednesday, ZEC is up 10% over the past seven days following the SEC’s decision to close its investigation into the Zcash Foundation without any further enforcement action and privacy-sector tokens have continued to extend gains, with tokens such as DASH up more than 100% in the week.

• President Trump’s and the FOMC’s views on monetary policy have been a matter of contention since the start of Trump’s second term in office. Earlier this week, the Trump administration took their strongest action yet – the Department of Justice issued grand jury subpoenas to the Federal Reserve, threatening criminal indictment into Chairman Jerome Powell over comments he made in a June 2025 congressional testimony. A slew of central bank governors and Fed Presidents have since come to defend Powell, with Chicago Fed President Goolsbee even claiming Powell is a “first-ballot hall-of-fame Fed chair.” Despite the tensions however, President Trump still said he doesn’t “have any plan” to fire Powell. Also interesting is the seemingly minimal impact the escalation has had on market volatility. In crypto options markets, ATM implied volatility continues to trend lower, while the VIX index has inly ticked up 3% in the last five days. The MOVE index on the other hand is down 12%.

• Fed funds futures assign an acute 5% probability of a January rate cut, as a lower-than-expected CPI print and mostly as expected PPI report failed to spur hopes of another 25bps reduction. Headline annual inflation held at 2.7% in December 2025, while core CPI came in below expected at 2.6%, a four year low. The Producer Price Index ‌for final demand rose 0.2% in November, driven mostly by a 4.6% gain in energy prices. The Fed’s Beige Book showed economic activity picked up at a “slight to modest pace” in most districts, marking “an improvement over the last three report cycles where a majority of districts reported little change”. That matches up with the most recent retail sales report, which showed consumer spending still remains strong (up 3.3% year-on-year).

Risk Appetite Index

BLOCK SCHOLES BTC RISK APPETITE INDEX – Since marking a local bottom at the end of 2025, Block Scholes’ BTC Risk Appetite Index continues to ascend, in line with a two-month high in spot price. That rally has been supported by growth in institutional demand too. Year-to-date BTC Spot ETFs have seen inflows of $1.5B, while Strategy made its biggest purchase since July earlier this week (added 13,627 bitcoin to its balance sheet for $1.25B).

Looking at the performance of spot price since the most recent crossing of the -1 threshold in our Risk-Appetite Index, we find that BTC is currently outperforming the median return based on past crossings of the -1 mark.recent attempt earlier in the week on January 5, 2025, and it currently changes hands at $90K.

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BLOCK SCHOLES ETH RISK APPETITE INDEX – Risk appetite in ETH has risen faster than in BTC, with the index looking poised to break above -0.5. Spot price year-to-date is up more than 13%, supported by strong Spot ETF inflows and major demand for ETH staking. In last week’s report we mentioned that the Beacon Chain’s entry queue had grown past 1.7M ETH – that’s now above 2.5M ETH. In addition, nearly 30% of the circulating supply of Ether is already currently being staked, a level last observed back in July 2025. Finally, BitMine purchased 24,266 ETH in the past week, with the company now owning 3.45% of the token’s outstanding supply. In the words of Tom Lee, the DAT is the “largest 'fresh money' buyer of ETH in the world”. 

Despite outperforming BTC so far this year, and holding steady above $3,300 currently, as seen below, ETH is slightly underperforming relative to the median from past cases of when our Risk Appetite index crossed from the -1 threshold.

‍BLOCK SCHOLES ALTCOIN RISK APPETITE INDEX – Risk appetite is slowly continuing to increase in altcoins, with the total crypto market cap having risen more than 5% over the past week. We’ve also seen a rally in specific altcoins on the back of idiosyncratic factors. LINK is up 6% following news that Bitwise’s Chainlink ETF, the second LINK-based Spot ETF to trade in the US, went live on Wednesday. ZEC has rallied more than 10% over the past seven days following the SEC’s decision to close an investigation it began in late 2023 into the Zcash Foundation without any further enforcement action. The wider privacy-sector has continued to march higher also – with tokens such as DASH up 113% on the week. The nation of Pakistan also signed an agreement with a company affiliated with World Liberty Financial (WLFI) to integrate its US dollar–backed stablecoin, USD1, into the State Bank of Pakistan’s regulated payments system.

A wider lookback period comparing our BTC Risk-Appetite Index and the Altcoin Risk-Appetite Index we find evidence that the latter often peaks and declines at a slight lag to the BTC indicator. That likely is a reflection of the capital rotation pattern observed in crypto markets where historically capital has flowed from BTC into altcoins in later parts of the cycle.