“It looks like we’re getting close to the shutdown ending”

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• Premia x Block Scholes: Introducing Kyan

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• Bybit x Block Scholes Quarterly Report: Rise of Perp DEXs — and how to catch the opportunity

• How did options markets react to the crypto selloff?

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• Metaplanet Is Selling Vol, Who Is Next?

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Market Snapshot: Overnight Moves

Daily Updates:

• This morning’s headlines centre on the possibility of easing the longest government shutdown in U.S. history, as the Senate took its first formal step toward reopening federal operations. In a 60 - 40 procedural vote on Sunday, lawmakers agreed to move forward with compromise legislation to fund the government, offering a potential turning point after more than five weeks of disruption.
• The move followed an agreement among a group of moderate Democratic senators to proceed without a guaranteed extension of Affordable Care Act tax credits, which expire on 1 January. While the deal does not secure the health care subsidies, it includes provisions to reverse mass federal worker firings ordered since the shutdown began on 1 October and to provide back pay for affected employees.
• Senate Democratic leader Chuck Schumer and most Democrats voted against advancing the bill, arguing that Americans expect them to continue pressing for health care protections. Still, Senate Majority Leader John Thune urged quick passage, citing the ongoing flight disruptions, food assistance risks, and unpaid federal workers as reasons to act quickly.
• Returning to the White House on Sunday, President Donald Trump did not state whether or not he endorses the deal but noted that

“It looks like we’re getting close to the shutdown ending.”

• Following this news, Polymarket now quotes an 85% probability that the shutdown will end between November 12 and 15.

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• After this announcement, major cryptocurrencies rallied sharply, where Bitcoin climbed 4.4% to $106,119, while Ethereum increased 7.8% to $3,632.
• BTC is now trading at $105,954, while ETH is holding at $3,593.

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• On Friday, U.S. spot Bitcoin ETFs recorded their largest single-day outflows since August, with investors pulling $558.4M, according to SoSoValue data.
• In contrast, Ethereum ETFs saw modest outflows of $46.6M, while Solana ETFs continued their nine-day inflow streak, adding $12.7M on Friday. 

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• U.S. consumer sentiment fell to its lowest level in more than three years, with the University of Michigan survey, released Friday, November 7, showing that confidence has weakened sharply amid the ongoing government shutdown - the longest in U.S. history. 
• The Consumer Sentiment Index dropped to 50.3 in November from 53.6 in October.

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• Sunday's rally saw ETH’s term structure invert as traders bid up short-dated optionality, but the increased action was not enough to entirely reverse the skew of ETH’s short-dated volatility smiles towards out-the-money puts.

• BTC’s rally had a similar if more muted effect on volatility markets, pushing up short-dated volatility levels without inverting the term structure. Similarly, BTC skews are more strongly bearish at short tenors.
• Perpetual swap funding rates, on the other hand, have spiked strongly positively in the last 24 hours. This indicates at least some backing by derivatives markets of the weekend move higher.

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• Announced on September 9, Cboe Global Markets, one of the world’s leading derivatives and securities exchange networks, is set to launch its new Continuous Futures for Bitcoin and Ether today

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• The Depository Trust and Clearing Corporation (DTCC), an American financial market infrastructure company that provides clearing, settlement, and trade reporting services, has listed five spot XRP exchange-traded funds (ETFs) under its “active and pre-launch” category, which may signal that they might launch in the near future.

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• The Bank of England released a consultation paper outlining its proposed regulatory framework for sterling-based systemic (largely adopted) stablecoins.
• It proposes allowing issuers to keep up to 60% of backing assets in short-term UK government debt, with the remaining 40% held in non-interest-bearing accounts at the Bank to support redemption stability and public trust.
• To ensure a smooth transition to digital money, the Bank proposes temporary holding caps of £20,000 per individual and £10M per business, with possible exemptions for large firms, to be lifted once the risks diminish.
• Stablecoins used mainly for trading or investment, rather than systemic payments, will remain under the oversight of the Financial Conduct Authority (FCA).

This Week’s Calendar:

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Charts of the Day:

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