Back to Research
Last Updated:  
March 31, 2025
2 min read

Crypto Volatility and Tariff Fears

Asian equity markets plunged this morning amid renewed fears of a US-led trade war, as President Trump's ambiguous tariff threats rattled investor sentiment across the region. Crypto markets faced heightened turbulence, with short-dated volatility surging and ETH continuing its multiyear underperformance versus BTC. Meanwhile, regulatory and technological developments include the proposed California bill supporting crypto payments and the UAE's anticipated Q4 launch of its Digital Dirham for retail use.

Daily Updates:

  • Asian markets have fallen this morning amid fears of a broader US trade war, triggered by the unclear scope of Trump’s planned global tariffs targeting countries accused of “unfair” trade practices. Focusing on Asian countries during an interview, Trump stated that “You’d start with all countries,” and  “We’ll see what happens”, reinforcing his tariff-on-tariff-off strategy. Asian stocks plunged in response, with Japan’s Topix down approximately -3.5%, Nikkei 225 -4%, South Korea’s Kospi -3% and Hong Kong’s Hang Seng Index -1.3%. Gold surged to a high of $3,126, and both 2-year and 10-year US Treasury yields fell approximately 6 basis points as investors sought safer assets.


  • In crypto, short-dated volatility levels have exploded higher once more as spot prices continued their Friday fall throughout the weekend.
  • BTC has returned to the bottom of its recent range, at $83.8K, while ETH trades at its lowest levels since October 2023. The strong relative underperformance in ETH continues several years of this trend, which sees the BTC / ETH spot cross pair trade at its highest level (in favour of BTC) since May 2020.
  • The impact of the most recent bearish spot moves on derivatives markets can barely be overstated – short-dated volatility smiles hold a skew towards OTM puts that is near the most bearish (and persistent) levels we have seen since the US Banking Crisis in March 2023, barring several short-lived spikes.
  • Perpetual swap funding rates trade negative, near 2025 lows, while futures prices once again trade at a discount to spot BTC and ETH.

  • California’s Banking and Finance Committee chair Avelino Valencia has amended Assembly Bill 1052 to focus on “Digital Assets,” and it is now awaiting its first reading in the state legislature. This change proposes protections for crypto payments and self-custody and, if passed, would legalise digital asset payments for goods and services from public entities.

  • The UAE's central banks’ Digital Dirham and digital dirham wallet are expected to launch for the retail sector in Q4 2025 via licensed financial institutions. It will enable smart contracts, tokenisation, and streamlined settlements. 
  • Following this update, Sonic Labs announced a pivot away from launching a USD-based algorithmic stablecoin and will instead release a “mathematically bound numerical Dirham” settled in USD.
  • Following the successful Pectra update on Ethereum’s Hoodi testnet last week, mainnet activation could happen as early as late April. However, it was signalled in the latest Ethereum execution layer meeting that Pectra is more likely delayed to May to allow for stakeholder readiness.

This Week’s Calendar:

Charts of the Day:

Figure 1. BTC ATM Implied Volatility. Source: Deribit, Block Scholes
Figure 2. ETH ATM Implied Volatility. Source: Deribit, Block Scholes
Figure 3. BTC at-the-money implied volatility across selected tenors. Source: Deribit, Block Scholes
Figure 4. ETH at-the-money implied volatility across selected tenors. Source: Deribit, Block Scholes
Figure 5. BTC 25-delta put-call skew ratio across selected tenors. Source: Deribit, Block Scholes
Figure 6. ETH 25-delta put-call skew ratio across selected tenors. Source: Deribit, Block Scholes
Figure 7.  BTC/ ETH Spot Cross Pair. Source: Deribit, Block Scholes
Share this post
Copy URL
www.blockscholes.com/premium-research/crypto-markets-daily-march-31-2025

Daily Updates:

  • Asian markets have fallen this morning amid fears of a broader US trade war, triggered by the unclear scope of Trump’s planned global tariffs targeting countries accused of “unfair” trade practices. Focusing on Asian countries during an interview, Trump stated that “You’d start with all countries,” and  “We’ll see what happens”, reinforcing his tariff-on-tariff-off strategy. Asian stocks plunged in response, with Japan’s Topix down approximately -3.5%, Nikkei 225 -4%, South Korea’s Kospi -3% and Hong Kong’s Hang Seng Index -1.3%. Gold surged to a high of $3,126, and both 2-year and 10-year US Treasury yields fell approximately 6 basis points as investors sought safer assets.

Daily Updates:

  • Asian markets have fallen this morning amid fears of a broader US trade war, triggered by the unclear scope of Trump’s planned global tariffs targeting countries accused of “unfair” trade practices. Focusing on Asian countries during an interview, Trump stated that “You’d start with all countries,” and  “We’ll see what happens”, reinforcing his tariff-on-tariff-off strategy. Asian stocks plunged in response, with Japan’s Topix down approximately -3.5%, Nikkei 225 -4%, South Korea’s Kospi -3% and Hong Kong’s Hang Seng Index -1.3%. Gold surged to a high of $3,126, and both 2-year and 10-year US Treasury yields fell approximately 6 basis points as investors sought safer assets.

Regulated Research

Access Block Scholes award-winning research team with deep experience in options trading for bespoke trade ideas, structured products, financial engineering, valuation and risk.

BotScholes

Access Block Scholes Crypto Trader Bot on Telegram, allowing users to visualize and price options, futures and perpetuals market data anytime, anywhere.

Proprietary Indices

Explore a new angle on data with Block Scholes’ exclusive indices, designed to summarise the market at a glance.