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Last Updated:  
June 16, 2025
2 min read

Overcoming Geopolitical Tensions

Crypto markets stand firm despite continued tensions in the Middle East. BTC has rebounded to $107K, supported by $1.3B in BTC Spot ETF inflows last week, while ETH is up 4% on the day changing hands at $2,600. Short-tenor volatility smiles for BTC and ETH have seen a significant recovery from their firmly put commanding front-end skew, though still show a premium for downside protection. Brazil has introduced a flat 17.5% crypto tax while Bybit has announced a Solana-based hybrid DEX, Byreal.

Daily Updates:

  • Despite Iran-Israel tensions in the Middle East continuing into their fourth day, the top 10 cryptocurrencies by market-capitalisation are trading higher. Spot BTC ETFs maintained positive inflows over the course of last week too, netting in over $1.3B of inflows. 
  • BTC dropped to $103K on the first day of the attacks, before stabilising around $105K over the weekend. Late last evening and into today however, BTC has moved up towards $107K, while ETH has rallied 4% over the past 24 hours, changing hands at $2,600. 
  • At-the-money implied volatility for short-dated BTC expiries rose yesterday night to 42% just as BTC briefly dropped to $104K, however as spot price recovered, that volatility has abated at the front-end of the term structure, resulting in 180-day options trading with a volatility premium of 8 percentage points relative to 7-day tenors. ETH’s term structure of volatility on the other hand remains inverted. 
  • Short-tenor volatility smiles for BTC and ETH have seen a significant recovery from their firmly put-skewed short tenor smiles to hold a slight 1 volatility point premium for OTM puts for BTC, and closer to a neutral skew for ETH options – that’s a marked change from the weekend when BTC puts carried a more than 6 vol point premium over equivalently out-the-money calls.
  • Risk-on sentiment appears to be slightly more prevalent as the week starts in other financial markets too: US equity futures are up 0.5% while Japan’s Nikkei-225 was up 1.3%. Brent crude oil prices soared more than 5% earlier in the day before paring back most of those gains. 
  • US treasury yields rose across maturities compared to Friday, with the 10-year yield increasing 5bps to 4.41%, while the 2-year yield is up 6bps at 3.96% – despite the tensions in the Middle East defying international calls for de-escalation, markets are still not turning completely risk-off and seeking shelter in US treasuries. 
  • Last week President Trump said that he intends to send letters to trading partners in the next one to two weeks, setting unilateral tariffs as his 90-day Liberation Day tariff pause approaches its July 9 deadline. Trump told reporters “We’re going to be sending letters out in about a week and a half, two weeks, to countries, telling them what the deal is” and that “you can take it or leave it”. 
  • Treasury Secretary Scott Bessent also told the US Congress that it is “highly likely” that the 90-day pause on tariffs to a baseline 10% would be extended for countries negotiating “in good faith” with the US. 
  • Metaplanet, a Japanese hotelier which has turned into a major Bitcoin buyer, saw its market cap surpass ¥1T ($6.9B) for the first time on Monday morning, as the company's stock has soared nearly 400% in two months. Today the stock rose 26% on the back of an announcement that said the Tokyo-based firm had purchased 1,112 bitcoins ($117.2M) at an average price of $105,435 per bitcoin. 
  • Bybit CEO Ben Zhou has announced Byreal, a new decentralised exchange built on Solana that blends centralised exchange-level liquidity with DeFi transparency, coining it a hybrid-finance DEX. The DEX testnet is set to launch by the end of June.
  • Brazil has scrapped its tiered crypto tax structure (0%–22.5%) in favor of a flat 17.5% capital gains tax on digital assets which came into effect on June 12.

This Week's Calendar:

Charts of the Day:

Figure 1. BTC at-the-money implied volatility across selected tenors. Source: Deribit, Block Scholes
Figure 2. ETH at-the-money implied volatility across selected tenors. Source: Deribit, Block Scholes
Figure 3. BTC 25-delta put-call skew ratio across selected tenors. Source: Deribit, Block Scholes
Figure 4. ETH 25-delta put-call skew ratio across selected tenors. Source: Deribit, Block Scholes
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Daily Updates:

  • Despite Iran-Israel tensions in the Middle East continuing into their fourth day, the top 10 cryptocurrencies by market-capitalisation are trading higher. Spot BTC ETFs maintained positive inflows over the course of last week too, netting in over $1.3B of inflows. 
  • BTC dropped to $103K on the first day of the attacks, before stabilising around $105K over the weekend. Late last evening and into today however, BTC has moved up towards $107K, while ETH has rallied 4% over the past 24 hours, changing hands at $2,600. 
  • At-the-money implied volatility for short-dated BTC expiries rose yesterday night to 42% just as BTC briefly dropped to $104K, however as spot price recovered, that volatility has abated at the front-end of the term structure, resulting in 180-day options trading with a volatility premium of 8 percentage points relative to 7-day tenors. ETH’s term structure of volatility on the other hand remains inverted. 
  • Short-tenor volatility smiles for BTC and ETH have seen a significant recovery from their firmly put-skewed short tenor smiles to hold a slight 1 volatility point premium for OTM puts for BTC, and closer to a neutral skew for ETH options – that’s a marked change from the weekend when BTC puts carried a more than 6 vol point premium over equivalently out-the-money calls.
  • Risk-on sentiment appears to be slightly more prevalent as the week starts in other financial markets too: US equity futures are up 0.5% while Japan’s Nikkei-225 was up 1.3%. Brent crude oil prices soared more than 5% earlier in the day before paring back most of those gains. 
  • US treasury yields rose across maturities compared to Friday, with the 10-year yield increasing 5bps to 4.41%, while the 2-year yield is up 6bps at 3.96% – despite the tensions in the Middle East defying international calls for de-escalation, markets are still not turning completely risk-off and seeking shelter in US treasuries. 
  • Last week President Trump said that he intends to send letters to trading partners in the next one to two weeks, setting unilateral tariffs as his 90-day Liberation Day tariff pause approaches its July 9 deadline. Trump told reporters “We’re going to be sending letters out in about a week and a half, two weeks, to countries, telling them what the deal is” and that “you can take it or leave it”. 
  • Treasury Secretary Scott Bessent also told the US Congress that it is “highly likely” that the 90-day pause on tariffs to a baseline 10% would be extended for countries negotiating “in good faith” with the US. 
  • Metaplanet, a Japanese hotelier which has turned into a major Bitcoin buyer, saw its market cap surpass ¥1T ($6.9B) for the first time on Monday morning, as the company's stock has soared nearly 400% in two months. Today the stock rose 26% on the back of an announcement that said the Tokyo-based firm had purchased 1,112 bitcoins ($117.2M) at an average price of $105,435 per bitcoin. 
  • Bybit CEO Ben Zhou has announced Byreal, a new decentralised exchange built on Solana that blends centralised exchange-level liquidity with DeFi transparency, coining it a hybrid-finance DEX. The DEX testnet is set to launch by the end of June.
  • Brazil has scrapped its tiered crypto tax structure (0%–22.5%) in favor of a flat 17.5% capital gains tax on digital assets which came into effect on June 12.

Daily Updates:

  • Despite Iran-Israel tensions in the Middle East continuing into their fourth day, the top 10 cryptocurrencies by market-capitalisation are trading higher. Spot BTC ETFs maintained positive inflows over the course of last week too, netting in over $1.3B of inflows. 
  • BTC dropped to $103K on the first day of the attacks, before stabilising around $105K over the weekend. Late last evening and into today however, BTC has moved up towards $107K, while ETH has rallied 4% over the past 24 hours, changing hands at $2,600. 
  • At-the-money implied volatility for short-dated BTC expiries rose yesterday night to 42% just as BTC briefly dropped to $104K, however as spot price recovered, that volatility has abated at the front-end of the term structure, resulting in 180-day options trading with a volatility premium of 8 percentage points relative to 7-day tenors. ETH’s term structure of volatility on the other hand remains inverted. 
  • Short-tenor volatility smiles for BTC and ETH have seen a significant recovery from their firmly put-skewed short tenor smiles to hold a slight 1 volatility point premium for OTM puts for BTC, and closer to a neutral skew for ETH options – that’s a marked change from the weekend when BTC puts carried a more than 6 vol point premium over equivalently out-the-money calls.
  • Risk-on sentiment appears to be slightly more prevalent as the week starts in other financial markets too: US equity futures are up 0.5% while Japan’s Nikkei-225 was up 1.3%. Brent crude oil prices soared more than 5% earlier in the day before paring back most of those gains. 
  • US treasury yields rose across maturities compared to Friday, with the 10-year yield increasing 5bps to 4.41%, while the 2-year yield is up 6bps at 3.96% – despite the tensions in the Middle East defying international calls for de-escalation, markets are still not turning completely risk-off and seeking shelter in US treasuries. 
  • Last week President Trump said that he intends to send letters to trading partners in the next one to two weeks, setting unilateral tariffs as his 90-day Liberation Day tariff pause approaches its July 9 deadline. Trump told reporters “We’re going to be sending letters out in about a week and a half, two weeks, to countries, telling them what the deal is” and that “you can take it or leave it”. 
  • Treasury Secretary Scott Bessent also told the US Congress that it is “highly likely” that the 90-day pause on tariffs to a baseline 10% would be extended for countries negotiating “in good faith” with the US. 
  • Metaplanet, a Japanese hotelier which has turned into a major Bitcoin buyer, saw its market cap surpass ¥1T ($6.9B) for the first time on Monday morning, as the company's stock has soared nearly 400% in two months. Today the stock rose 26% on the back of an announcement that said the Tokyo-based firm had purchased 1,112 bitcoins ($117.2M) at an average price of $105,435 per bitcoin. 
  • Bybit CEO Ben Zhou has announced Byreal, a new decentralised exchange built on Solana that blends centralised exchange-level liquidity with DeFi transparency, coining it a hybrid-finance DEX. The DEX testnet is set to launch by the end of June.
  • Brazil has scrapped its tiered crypto tax structure (0%–22.5%) in favor of a flat 17.5% capital gains tax on digital assets which came into effect on June 12.