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Revived Optimism On ETH

ETH market sentiment is currently extremely bullish -- from ETH Spot ETFs maintaining their longest inflow streak of 2025 to short-tenor volatility smiles surging as high as 7%. In this report we summarise the market sentiment for the second largest cryptocurrency and list some drivers for the renewed optimism in ETH.

June 11, 2025

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Block Scholes x Bybit Crypto Derivatives June 19

The conflict in the Middle East left its mark on the trading volume of perpetual swap contracts, as well as on funding rates, which have turned negative for a slew of tracked tokens. Market-wide de-risking over fears of a worsening Iran-Israel conflict has also resulted in a sea of red for crypto assets over the past week. BTC is down more than 4%, ETH more than 8% and SOL 10%. Nevertheless, ETH options markets are carrying a less bearish tilt toward OTM puts (relative to BTC short-tenor options), and for expirations beyond 30 days, the ETH put-call skew is positive.

Block Scholes x Bybit Crypto Derivatives June 13

A public feud at the end of last week between President Trump and Tesla CEO Elon Musk had a minimal impact in perpetual funding rate markets, although it resulted in a temporary sea of red in crypto spot markets. That didn’t last long — BTC is now trading only $2K shy of its ATH of $111K, though its options markets are neutral to slightly bullish. This contrasts significantly with ETH options markets, in which short-tenor volatility smiles skewed more than 10% toward OTM calls earlier today, as ETH’s spot price has outperformed over the past seven days as well.

Block Scholes x Bybit May Volatility Review: ETH-BTC volatility reaches a five-year high as ETH plays catch-up

ETH options traded at historically high volatility premiums relative to BTC in May 2025, driven by ETH’s significantly higher realized volatility amid a sharp spot price rally. The ETH-to-BTC implied volatility ratio reached a nearly five-year high (over 2x for short-dated tenors).

Block Scholes x D2X: Stablecoin and Fiat-Denominated Options

Unlike TradFi equivalents, cryptocurrency options markets are far smaller than the spot markets of their underlying assets, with sparse underlying offerings and illiquid markets. The difficulty in trading crypto-currency options is compounded by the disparate base currencies used – few venues offer direct exposure to BTC or ETH options denominated clearly in fiat currencies like the EUR or USD. Instead, options exposure is collateralised by and quoted in stablecoins or even the underlying itself, complicating calculations of greeks and understanding of market exposure.

Block Scholes x Bybit Crypto Derivatives June 4

As BTC’s spot price failed to hold at its all-time high (ATH) of $111K for a sustained period of time, the drop toward $105K has now brought a shift in the sentiment of options markets. The bullish skew that was apparent in volatility smiles across the term structure has abated, with short-tenor options skewing briefly toward OTM puts before returning to neutral. ETH’s term structure of volatility is no longer disinverted, with volatility expectations across tenors compressed. Short-tenor skew for ETH is pointed toward OTM puts, though ETH funding rates are exhibiting more bullish sentiment than indicated by options markets.

Block Scholes x Bybit Crypto Derivatives May 28 2025

BTC’s march to a new all-time high on May 22, 2025 has been followed by a period notable largely for its lack of volatility. Realized volatility has fallen across cryptocurrencies, causing a corresponding drop in short-dated implied volatility. For ETH, that’s resulted in a flat term structure, while for BTC it’s caused a reasonably strong steepening as the 7-day tenor has fallen back below 40%. Options and futures markets have expressed bullish sentiment throughout the past week, with positive futures yields and funding rates and a skew toward OTM calls. However, a downturn in BTC’s spot price on May 28, 2025 has clouded the picture somewhat in funding rates.

Bybit X Block Scholes Institution Report: Drivers and Sentiments Behind Ether’s Recent Breakout and How Far It Can Go

While a large portion of the past two crypto bull runs (2015-18 and 2019-22) was dominated by Bitcoin outperformance, that did not last forever – both cycles eventually experienced a period of vicious capital rotation out of BTC and into altcoins. This eventually heated up into what is referred to in crypto folklore as ‘Altseason’: a time of significant and sustained outperformance of altcoins relative to Bitcoin. Ethereum, the second-largest cryptocurrency by market capitalization, has long stood as the bellwether for the wider altcoin market and, in extension, with altseason.

Block Scholes x Bybit Crypto Derivatives May 23

Front-end volatility for BTC has been reactive to the whipsaw in spot price over the past week, which has more recently resulted in BTC reaching a new all-time high (ATH) of $$111.97K – the first new ATH since January 20, 2025, four months ago. At-the-money implied volatility levels remain between 45% and 50%, as short-tenor volatility expectations have now picked up significantly from their lows of last week. Perpetual funding rates remain tempered despite a spot price that has reached new highs, although options skew temporarily steepened towards calls by as much as 7%, due to renewed demand for OTM calls.

Block Scholes <> Quant Insight Bitcoin’s Sensitivity Shift

This paper sets out to evaluate the changing relationships between macro fundamentals and crypto sentiment. Quant Insight’s unique quantitative macro framework firstly identifies and then measures the macro "DNA" of any asset. Block Scholes Senti-Meter provides a way to track the degree to which crypto derivative technicals are driving price action. As Bitcoin increasingly moves into the TradFi space, all crypto investors need to adopt an investment framework that covers macro, technical, positioning & sentiment factors.

Block Scholes x Bybit Crypto Derivatives May 9 2025

Further sideways spot price activity has led both BTC and ETH to trade within their respective bounds of $94–97K and $1.7K–$1.8K. In response, their respective implied volatility levels continued dropping off for most of the past seven days before each bounced off its own 18-month floor after it was announced that the US and China would be having their first trade talk following a long game of cat and mouse, which saw neither side back down. In turn, we saw a near recovery of ETH skew from OTM puts and a bullish bounce toward calls from neutral levels for BTC.

Block Scholes x Bybit April Volatility Review

After months of foreshadowing, on Apr 2, 2025, US President Donald Trump announced a series of steep “reciprocal” tariffs on most of the country’s trading partners — rewriting global trade policy in the US to extremes last seen in the 1930s. As a consequence, April was characterized by another wave of volatility across crypto, equities and fixed-income, not only in response to a deluge of changing tariff headlines and narratives, but in anticipation of further revisions and repeals.

DeFi Analytics 2nd May 2025

This week's edition of our Crypto DeFi Analytics. Solana’s daily fees are now nearly triple Ethereum’s, while Beacon Chain activity remains flat with minimal deposits and withdrawals.

Block Scholes x Bybit Crypto Derivatives April 25 2025

At the start of the week, Bitcoin began to show signs of decoupling from its relationship with US equities. However, following US president Donald Trump's positive comments regarding the US’s ongoing trade war with China (which saw tariffs of 145% imposed on Chinese goods entering the US), a relief rally has gripped markets across asset classes. In turn, BTC has once more been moving up alongside US equities. With that spot move, implied volatility at 7-day and 14-day tenors has jumped, and BTC’s put-call skew has recovered at short tenors, a sign that traders are indeed looking for upside exposure to the rally.

DeFi Analytics 25th April 2025

This week's edition of our Crypto DeFi Analytics. Ethereum's daily fee generation rebounded this week from a monthly low of approximately $280K to over $1.1M, while Aave users experienced liquidations amid the crypto resurgence.

DeFi Analytics 17th April 2025

This week's edition of our Crypto DeFi Analytics. The Beacon Chain continues to show a strong net outflow of validators while Solana widens its daily fee generation lead over Ethereum, with an over $1M difference.

Block Scholes x Bybit March Volatility Review

Implied volatility continued to spike sharply in response to spot price moves, with repeated inversions in the term structure driven more by macro shocks than by pre-positioning ahead of known events. US president Donald Trump’s series of tariff announcements and walkbacks created whipsawing price action, with crypto volatility peaking after major policy moves — and collapsing just as quickly in periods of calm.

Block Scholes x Bybit Crypto Derivatives April 9 2025

After initially holding firm following US president Donald Trump’s “Liberation Day” tariffs, crypto joined the global market sell-off as BTC dropped from $87K on Apr 2, 2025, down to a local bottom of $74K. Its term structure once again inverted before slightly abating, as we’ve often seen it do, and ETH’s term structure has remained at an already inverted state. Short-tenor BTC volatility smile skews reached a bias toward OTM puts, reflecting even more bearish sentiment than during the turmoil of the US banking crisis in Q1 2023. These levels of volatility have since dropped off, as Trump announced yet another pause on his tariff plan. This time, the reciprocal tariffs have been temporarily paused for 90 days (except for those on China), which has resulted in a dramatic spot price rally.

DeFi Analytics 11th April 2025

This week's edition of our Crypto DeFi Analytics. April 7th saw Ethereum's daily fee generation more than double Solana's, liquidations spike on Aave and Compound and Bitcoin plunge from $83K to below $76K.

Bybit Incident Postmortem

On Feb 21, 2025, Bybit, the world's second-largest cryptocurrency exchange by trading volume, suffered a major security incident that involved an exploit of one of its Ethereum cold wallets. In this report, we’ll provide a guided explanation of the immediate market impact of the security incident and subsequent recovery.

Block Scholes x Bybit Crypto Derivatives April 6 2025

As markets finally approach the day of tariffs that US president Donald Trump has dubbed America’s “Liberation Day,” crypto continues its macro-sensitive spot volatility. That volatility has seen BTC drop from its $88K local high to $82K, as President Trump showed signs that his reciprocal tariffs would not spare any country, though notably, the tariffs do not apply to Russia or North Korea. Implied volatility has exploded and since eased. Other derivatives markets metrics show BTC and ETH volatility smile skews remain significantly skewed towards puts, though slightly higher than the recent levels reached, which were last seen in March 2023.

DeFi Analytics 4th April 2025

This week's edition of our Crypto DeFi Analytics. Solana and Ethereum's daily fee generation shows an emerging cyclical trend, while Ethereum’s Beacon Chain has seen a steady rise in active validators since mid-March.

DeFi Analytics 28th March 2025

This week's edition of our Crypto DeFi Analytics. Solana maintains its lead over Ethereum in daily fee generation, while blob gas drawdowns hint at easing demand from Layer 2s.

Block Scholes x Bybit Ethereum’s Pectra upgrade and the market’s cautious reaction

Ethereum’s persistent underperformance relative to both BTC and competitor smart contract–enabled blockchains highlights the urgency behind the Pectra upgrade, which seeks to enhance network scalability, staking efficiency and user experience. Technical improvements in the form of Ethereum Improvement Proposals (EIPs), such as validator consolidation (EIP-7251) and streamlined withdrawal mechanisms (EIP-7002), address current structural inefficiencies, potentially attracting more staking participation, while adjustments to blob space (EIP-7691) further the incentives for increased Layer 2 adoption initiated by March 2024’s Dencun upgrade.

One Last Inversion For March?

The week began with a relief rally but the risk-on appetite has proven to be short-lived. SPX and NDX extended their losses into a third consecutive day following Trump's auto tariffs and and the major 4 crypto assets have all fallen 3-6% on the day so far. BTC's term structure of volatility briefly inverted whilst ETH's term structure is currently flat. Separately, Intercontinental Exchange Inc. is partnering with Circle to explore the integration of the USDC stablecoin into ICE’s derivatives exchanges and clearinghouses.

The Stablecoin Rush

Fidelity Investments and the State of Wyoming join Trump-backed World Liberty Financial in the race towards stablecoin issuance whilst GameStop Corp. announce plans to raise $1.3B via 0% Convertible Senior Notes in order to acquire Bitcoin. Risk-on assets fell once again after a brief reprieve earlier in the week and President Trump has announced a 25% tariff on all auto imports, beginning April 2.

BTC, GME and WLF

BTC is trading close to its two-week high, though the move up in spot hasn't quite been matched by the same bullish momentum in derivatives markets. BTC's funding rate is close to 0% and both the term structure of volatility for BTC and ETH has continued to steepen as front-end expectations decline. In DeFi, World Liberty Financial has announced plans to launch its own dollar-backed stablecoin and Cboe has filed on behalf of Fidelity for a Solana ETF.

Another Relief Rally?

Crypto and equities started the week with a rally, after a one-month long stretch of losses amidst signs that President Trump's "Liberation Day" tariffs may be narrower in focus than expected. BTC has benefitted from the boost in risk-sentiment, breaking past $88K briefly. While not turning strongly bullish, sentiment in derivatives markets has at least pulled away from the persistently bearish tilt it’s held over the last few weeks with futures yields rising particularly at short tenors and funding rates flipping positive.

The Recovery Continues

The modest recovery of the crypto market continues as BTC currently trades at $87K amidst signs that President Trump's reciprocal tariff program may be more targeted and focused than previously expected. Front-end volatility for both BTC and ETH is close to their lowest levels of the month and BTC’s volatility smile looks to be shifting towards calls. ETH’s front-end skew levels have also ticked up, indicating some renewed demand for out-the-money call options relative to OTM puts.

DeFi Analytics 21st March 2025

This week's edition of our Crypto DeFi Analytics. The trend of Solana’s daily fee generation outperforming Ethereum’s has re-emerged, while ETH’s hourly average gas fees burned per block remain minimal with no noticeable spikes in demand.

Block Scholes x Bybit Crypto Derivatives March 21 2025

The broad-based decline in global asset prices was arrested this week, with crypto assets continuing their high correlation to US equities during a recovery. BTC is trading higher, above $85K, while ETH has recovered a key psychological level at $2K. Despite this, activity in derivatives markets has remained low. Funding rates for major tokens BTC, ETH and SOL have been consistently negative over this period. However, the demand for short-dated options, which was particularly strong in protection against further downside moves, has fallen alongside an end to the high level of realized volatility that has dominated markets over the past month.

“Ending the last administration’s regulatory war on crypto”

President Trump’s two-minute video presentation at the Blockworks Digital Assets Summit disappointed market participants, with BTC falling from $86K down to $83K. With that move in spot, BTC’s term structure of volatility has steepened and at-the-money implied volatility for 7-day tenors is currently at its lowest since late February. Short-dated optionality once again expresses appetite for downside protection with volatility smiles for tenors less than 30 days tilted towards OTM puts. Separately, Pump.fun, a memecoin launchpad protocol, has launched its own decentralised exchange, PumpSwap, on Solana.

"Transitory Inflation"

The Federal Reserve, as expected, left the federal funds rate unchanged at 4.25%-4.50%. The FOMC's revised SEP shows higher inflation at the end of 2025 and lower GDP growth from 2.1% to 1.7%. Chair Powell also expressed the FOMC's "base case" for tariff-induced inflation as "transitory" and announced a slowdown in the pace of quantitative tightening. Markets took the dovish delivery positively with BTC volatility smiles skewing towards calls at all tenors at BTC spot price rallied through $87K.

Rates Hold, Inflation Pressures

The Bank of Japan has kept interest rates unchanged and the Fed is expected to follow suit—but uncertainty looms amid inflationary pressures and global trade risks. Institutional crypto adoption gains momentum as CME Group launches SOL futures. Meanwhile, MicroStrategy (MSTR) is offering 5 million shares of its 10% Series A Perpetual Strife Preferred stock to the public.

Sideways Lull

BTC appears to be in a sideways lull since Friday around 20% below its all-time high, as the wider crypto market consolidates without a lack of new news to drive price action. That muted sentiment is reflected in derivatives markets too – while both BTC and ETH’s volatility term structures have re-inverted, they remain considerably compressed since last week’s highs. Additionally, although they are no longer trading below spot price, short-dated futures currently do not trade close to the spread above spot that they did during the run to $109K in January.

DeFi Analytics 14th March 2025

This week's edition of our Crypto DeFi Analytics. Ethereum and Solana's daily fee generation are now more comparable, and overall down from last week. Aave liquidations surged on March 11, as ETH spot hit a new 2025 low.

Volatility Review February 2025

While crypto volatility in February 2025 was bookended by two incredibly choppy periods, the middle of the month saw BTC trade with a realized volatility level of just 29%. This level has marked the floor of BTC’s realized volatility over the past 18 months, with reversions to the mean occurring shortly after. Despite a significant drop-off in volatility expectations when the market digested the details of US president Donald Trump’s plan for a strategic crypto-asset stockpile, volatility expectations have once again rallied for short-dated options. This has resulted in a return to the inverted term structure of volatility that BTC and ETH options had traded with at the end of February.

Crypto Markets Daily Mar 14 2025

The increasing worries surrounding an ever-evolving program of tariffs by President Trump continues to weigh on risk-on sentiment for US equities. The latest episode involves a potential 200% tariff on EU wine and alcohol products. The S&P 500 has officially joined the NDX in entering a technical correction, though crypto-assets on the other hand have slowly moved up through yesterday evening into today.

Crypto Markets Daily Mar 13 2025

US equities felt some reprieve yesterday with a softer-than-expected CPI print which also saw BTC slowly move upwards to $84K. Its term structure of implied volatility has compressed almost into a flat structure, however ETH’s term structure of volatility is still inverted. Skew levels for ETH at all tenors excluding the 7-day have lost some of their bias towards puts as its spot price continues to trade sideways since the beginning of the week, though only the 180-day tenor option assigns a call-premium. Canada announced some further "dollar for dollar" retaliatory tariffs.

Crypto Markets Daily Mar 12 2025

President Trump walks back yet another tariff threat, this time on raising steel and aluminium levies on Canada to 50%. Additionally, the President has downplayed recession risks stating the US economy is "going to boom", with yesterday's JOLTS report adding some aid to that narrative. BTC is currently experiencing a relief rally, though derivatives markets remain less bullish -- volatility smile skews are still towards puts for all tenors below three months, futures prices trade below spot for the first time since the November election, and perpetual swap funding rates have turned negative.

Crypto Markets Daily Mar 11 2025

The three-week long US equities sell-off deepened even further yesterday with the S&P 500 posting its largest single-day loss since December 2024 and the Nasdaq-100 entering a correction zone. That widespread de-risking saw BTC fall to $78K, whilst treasuries rallied. BTC and ETH’s term structures remain inverted, with skew for all tenors below 90 days significantly put-skewed.

DeFi Analytics 7th March 2025

This week's edition of our Crypto DeFi Analytics. Ethereum and Solana's daily fee generation remains low. Arbitrum's hourly volume spiked to nearly $450M after Trump's bullish post about a potential US crypto reserve triggered a market rally.

Block Scholes x Bybit Crypto Derivatives March 5th 2025

Crypto price action continues to be driven by US President Trump’s policies. Several SEC cases against crypto-native firms have been dropped over the past month, positive news for the industry that was followed up by Trump’s weekend announcement of the inclusion of BTC, ETH, XRP, SOL and ADA in a US strategic reserve.

Crypto Markets Daily Mar 7 2025

The much anticipated Strategic Bitcoin Reserve was formally signed in an Executive Order by President Trump, though the overall market reaction has been one of disappointment, with BTC falling over 5% on the news, before paring some losses back. Derivatives markets reflect that disappoint too. Implied volatility at the front-end for BTC has dropped sharply by over 10 points and BTC perpetual futures funding rates have also dropped negative.

Crypto Markets Daily Mar 6 2025

BTC continues its recovery amidst a wider breath of relief from risk-on assets as Trump exempts automakers from his recent tariffs for one month. The term structure of volatility for both BTC and ETH is still inverted, though skew for short tenor BTC options is now positioned closer to neutral. Euro-area bond yields have rallied significantly amidst increased EU fiscal spending.

Crypto Markets Daily Mar 5 2025

BTC rebounded from $82K to $89K (+6%), coinciding with a 0.88% rise in SPX futures post-close, after Commerce Secretary Lutnick suggested Trump may reconsider tariffs on Canada & Mexico. Markets fell sharply - SPX dropped 1% to its lowest post-election level, while 2-year Treasury yields declined 11bps. Fed rate cut expectations have risen, with three cuts now priced in for 2025.

Crypto Markets Daily Mar 4 2025

President Trump's 25% tariffs on Canada and Mexico and doubled levies on China weighed heavily on risk-on sentiment across the board, with BTC down 9% on the day. ETH has completely erased its Sunday gains following the Strategic Reserve announcement and both majors' currently have an even steeper implied volatility term structure. ISM Manufacturing data disappointed and the Atlanta Fed's GDPNow forecast has fallen even lower.

Crypto Markets Daily Mar 3 2025

President Trump's announcement for a Strategic Crypto Reserve containing BTC, ETH, XRP, SOL and ADA has partly reversed the price slump of February. BTC and ETH's implied volatility term structures once again inverted and BTC's short-tenor options are skewed towards puts. The Atlanta Fed's GDPNow model currently predicts a 1.5% annualised decline in GDP growth for Q1 2025.

DeFi Analytics 28th February 2025

This week's edition of our Crypto DeFi Analytics. Ethereum and Solana saw their lowest daily fee generations this month and aggregate liquidations across Aave & Compound remain surprisingly low.

February 28, 2025

Block Scholes x Bybit Crypto Derivatives February 28th 2025

Macro headwinds are once again in the driver’s seat for crypto, as a sell-off that began over the weekend has deepened throughout the early part of this week. Following a period of dismal sideways price action, BTC, ETH and almost all altcoins have followed the lower trajectory of equities, gold and treasury yields. Derivatives markets, however, only began to show signs of significant bearish sentiment and a material increase in volatility expectations on Wednesday afternoon as the selloff deepened.

February 28, 2025

Crypto Markets Daily Feb 28 2025

Bitcoin's selloff intensified during the opening of Asian equity trading hours, reaching an intra-day low of $78.5K. The deepened correction has resulted in BTC and ETH's implied volatility term structures to invert more significantly, with BTC 7-day tenor ATM volatility almost matching levels during the early February inversion. President Trump gave the greenlight for Mexico, Canada and China tariffs from March 4. Separately, there are multiple new developments in DeFi.

February 28, 2025

Crypto Markets Daily Feb 27 2025

BTC and ETH's implied volatility term structures have once again inverted as front-end vol lagged a limp rebound in spot prices during early Asian trading hours. Spot Bitcoin ETFs continue their onslaught of selling, recording the highest single day of outflows earlier in the week. President Trump further added to market uncertainty yesterday as he gave mixed messages regarding his tariff implementations on Mexico and Canada.

February 27, 2025

Crypto Markets Daily Feb 26 2025

The Conference Board's recent survey showed consumer confidence in February saw the largest single-month fall since August 2021. The 10Y US yield dropped to its lowest level year-to-date following the release and markets are now fully pricing in two rate cuts over the course of 2025. ETH's implied volatility term structure has flattened from its inversion yesterday and is currently up 4% today. The SEC has officially acknowledged Greyscale's Cardano (ADA) ETF filing.

February 26, 2025

Crypto Markets Daily Feb 25 2025

BTC and the wider crypto market has been steadily falling driven by a confluence of factors. That fall was amplified further by President Trump confirming his tariffs on Mexico and Canada “are going forward, on time”. ETH is down 10% on the day and its volatility term structure has notably inverted.

February 25, 2025

Bybit ETH Hack

Bybit was hacked for $1.46 billion in Ethereum and staking derivatives, allegedly by the Lazarus Group. The attack involved a phishing-style manipulation of a routine multisig cold wallet transaction rather than a flaw in the Ethereum network itself. While some stolen funds were swapped into Bitcoin and Tether froze 181K USDT, the market impact on ETH was minimal given the asset’s large trading volume.

February 22, 2025

Block Scholes x Bybit Crypto Derivatives February 21st 2025

Driven by fewer macroeconomic releases than in the first month of 2025, crypto’s lower-volatility environment has resulted in a sideways slog in spot prices. This has in turn had the expected impact on derivatives markets: lower implied volatility pricing, a steepening term structure and nearly unchanged levels of open interest across all instruments. ETH options markets, however, continue to price in a continuation of its more volatile spot price moves. As we’ve seen in previous instances, this sideways spot price movement includes an underperformance in altcoins, expressed most obviously in derivatives markets as a disappointing funding rate.

February 21, 2025

DeFi Analytics 21st February 2025

This week's edition of our Crypto DeFi Analytics. Feb 17th saw Ethereum's fee generation outperform Solana's for the day with gas fees burnt per block spiking. Liquidations across Aave and Compound spike on the same date, coinciding with the brief ETH spot rally.

February 21, 2025

Crypto Markets Daily Feb 21 2025

At-the-money volatility for BTC and ETH continue to drop across all tenors, with ETH 7-day tenor options maintaining a 50% volatility premium. Core inflation in Japan rose to its highest since June 2023, increasing the expectation for a BOJ rate hike, and growth in Europe remains sluggish. There are multiple new developments in DeFi including Franklin Templeton's new Bitcoin and Ethereum ETF.

February 21, 2025

Crypto Markets Daily Feb 20 2025

BTC and ETH both move sideways at +0.7% and +1.5% (24hrs) respectively. Derivatives markets reflect this, with ETH’s volatility term structure flattening after a mild inversion, while BTC’s remains steep.

February 20, 2025

Crypto Markets Daily Feb 19 2025

BTC and ETH both move sideways at +0.7% and +1.5% (24hrs) respectively. Derivatives markets reflect this, with ETH’s volatility term structure flattening after a mild inversion, while BTC’s remains steep.

February 19, 2025

Crypto Markets Daily Feb 18 2025

SOL is down 8% on the day, coinciding with the 90% drawdown in the Solana based LIBRA memecoin token. ETH on the other hand, rallied 8% yesterday before paring its gains back, resulting in an inverted at-the-money implied volatility term structure.

February 18, 2025

Crypto Markets Daily Feb 17 2025

Binance Smart Chain is making a comeback, with Pancake Swap processing $1T in cumulative trading volume. Abu Dhabi sovereign wealth fund Mubadala Investment Company purchased $436.9M of BlackRock's IBIT ETF in Q4 2024 and GameStop is also considering purchasing Bitcoin with its $4.6B cash reserve. The President of Argentina is facing impeachment threats following his endorsement for the LIBRA token which has lost 90% of its market-cap.

February 17, 2025

DeFi Analytics 14th February 2025

This week's edition of our Crypto DeFi Analytics. Solana' continues to outperform Ethereum in fee generation. Hourly Average Cost to Transfer ETH (21,000 Gas) drops to the lowest levels seen this month and liquidations across Aave and Compound are negligible.

February 14, 2025

Volatility Review January 2025

Since the start of the year, BTC and ETH weekend activity has been notably reactive, with recent sell-offs driven by macroeconomic factors such as Trump’s tariff policies, speculation about a strategic Bitcoin reserve, and competition from AI-driven disruptors like DeepSeek. Notably, BTC and ETH have acted as leading indicators for broader market movements, reacting more swiftly and sharply to economic and geopolitical developments than traditional equities.

February 14, 2025

Crypto Markets Daily Feb 14 2025

Headline PPI in the US came in above expected, with the final demand year-over-year figure increasing to 3.5% in January. President Trump has announced his 'Fair and Reciprocal' tariff plan designed to introduce a round of bilateral reciprocal tariffs with US trade partners. In DeFi news, Trump backed World Liberty Financial continues its large-scale crypto purchases, and the Ethereum Foundation has made additional moves to bolster its on-chain DeFi activity.

February 14, 2025

Crypto Markets Daily Feb 13 2025

US CPI exceeded economist expectations on all counts, with the YoY headline figure rising to 3.0%, against the expected 2.9% and core YoY prices increasing to 3.3%, above the expected 3.1%. Chair Powell reiterated the Fed's intention to keep rates restrictive following the CPI release. BTC initially dropped on the news, though pared back the losses through the day.

February 13, 2025

Crypto Markets Daily Feb 12 2025

MicroStrategy resumes its Bitcoin buying, announcing its purchase of 7,633 bitcoins after a two week break. ADA has outperformed the top 10 altcoins by market-cap, bolstered on by Grayscale's ADA ETF filing. BTC and ETH skew levels have returned back to a positive territory.

February 12, 2025

Crypto Markets Daily Feb 11 2025

MicroStrategy resumes its Bitcoin buying, announcing its purchase of 7,633 bitcoins after a two week break. ADA has outperformed the top 10 altcoins by market-cap, bolstered on by Grayscale's ADA ETF filing. BTC and ETH skew levels have returned back to a positive territory.

February 11, 2025

Bybit x Block Scholes: The Altcoin Rotation: Why and When Altcoins Outperform Bitcoin

The elusive "altseason" phenomenon—when altcoins historically outshine Bitcoin in market cycles is one of the most anticipated moments in all historical crypto cycles. Unlike past booms, 2024 has bucked the trend, with BTC holding strong while altcoins struggle to steal the spotlight. Ethereum’s underperformance, institutional dominance via ETFs, and a pre-halving all-time-high rally may have disrupted the usual capital rotation. Yet, increasing stablecoin supply, supply-demand factors and memecoin speculation hint that a belated altseason-like frenzy could still be ignited — if the right spark catches fire.

February 10, 2025

Crypto Markets Daily Feb 10 2025

China confirmed its retaliatory tariffs on U.S. imports including 15% levies on liquid natural gas and coal. President Trump announced some more tariffs of his own too, which coincided with a temporarily pullback in BTC's spot price. CPI in China rose more than expected, though seasonal factors likely skewed the data.

February 10, 2025

DeFi Analytics 7th February 2025

This week's edition of our Crypto DeFi Analytics. A bittersweet week for Ethereum: network demand surges, surpassing Solana in fees, but ETH spot crashes 25%. Uniswap V3 hits a 2025 high in transaction count, while over $15M in positions are liquidated across Aave and Compound.

February 7, 2025

Block Scholes x Bybit Crypto Derivatives February 7th 2025

Another week, another Monday crypto risk-off event that continues its recent correlation to equities. However, despite last week’s sell-off, BTC outperformed relative to the wider crypto market, experiencing a far less steep sell-off, as reflected in its derivatives markets positioning. Options markets priced short-tenor volatility higher before the inversion of the term structure resolved remarkably quickly. ETH, in contrast, saw a much sharper inversion as short-tenor options spiked significantly higher alongside realized volatility. Perpetual swap contracts lost much of their open interest in a liquidation event that some, including Bybit CEO Ben Zhou, estimated were likely as high as $10B. The sudden bearishness was reflected in funding rate data, with altcoins seeing a more persistent and negative funding rate in the days since the crash than BTC did.

February 7, 2025

Crypto Markets Daily Feb 07 2025

Labour productivity in the U.S. ticked up at an annual rate of 2.3% between 2023 and 2024 as Dallas Fed President suggests the FOMC may need to hold interest rates at their current level for "quite some time". President Trump's Media Group announces plans to launch its Bitcoin Plus ETF. Bitcoin's implied vol term structure continues to steepen.

February 7, 2025

Crypto Markets Daily Feb 06 2025

BlackRock announces plans for a Bitcoin ETP in Europe and Commissioner Hester Pierce announced her key goals for the Crypto Task Force. Institutions are buying the ETH dip with the third-largest single-day spot ETF inflows since launch and ETH's implied vol term structure disinverts.

February 6, 2025

Crypto Markets Daily Feb 05 2025

The JOLTS report showed a U.S. economy still in a stable, low-hiring, low-firing state with quits and layoff rates holding steady. Bitcoin continues to range between $96K and $100K as Crypto Czar provides update on a Strategic Bitcoin Reserve. ETH's term structure remains significantly inverted compared to Bitcoin's much flatter shape.

February 5, 2025

Crypto Markets Daily Feb 04 2025

President Trump announced a 30 day pause on his tariff program against Canada and Mexico which brought a well needed relief rally in cryptocurrencies. That didn't last long as China announced its own retaliatory measures against the U.S. ETH's implied vol term structure remains inverted, compared to BTC's flatter term structure. The $2B liquidation event of yesterday hasn't stopped ETH Spot ETF inflows however. Uniswap launches v4.

February 4, 2025

Crypto Markets Daily Feb 03 2025

President Trump's long awaited tariff program has caused a knee-jerk reaction in crypto markets which have led the risk-off move. BTC temporarily crashed to $91K with both BTC and ETH's term structures inverting. ETH perp funding rates have dropped to -0.07%, and a basket of the Trump Trade altcoins have posted double digit losses.

February 3, 2025

DeFi Analytics 31st January 2025

This week's edition of our Crypto DeFi Analytics. Solana continues to cement its year-to-date dominance in fee generation compared to Ethereum with a notable divergence. Ethereum's blob gas usage remains stable and Uniswap V3 sets a new January high for transaction count.

January 31, 2025

Crypto Markets Daily Jan 31 2025

The U.S. grew by less than expected in Q4, but still recorded a robust figure that pushed 2024 yearly growth to 2.8%. President Trump once again threatened 100% tariffs on BRICS nations if they attempt to create a BRICS currency or replace the U.S. dollar. Crypto Spot ETFs are back to positive inflows, ending a disappointing week. Apollo Global Management announced a partnership with Securitize to tokenise shares of its Apollo Diversified Credit Fund on various blockchain networks. Rollman Management Digital, a private investment firm, has invested $20M into Elastos.

January 31, 2025

Block Scholes x Bybit Crypto Derivatives January 31st 2025

Markets experienced a significant risk-off event at the beginning of this week, as DeepSeek’s LLM announcement coincided with sharp declines in major indices and across crypto markets, despite a direct and obvious impact on the value of the crypto-asset market. Although spot markets saw a volatile selloff, open interest in perpetual swaps has remained stable, with funding rates briefly flipping negative before partially recovering. Options markets saw a surge in trading volume amid the selloff, but forward-looking volatility expectations declined. However, positioning over a longer horizon remains the same — longer dated options positions indicate a bullish sentiment.

January 31, 2025

Crypto Markets Daily Jan 30 2025

The FOMC voted unanimously to leave the FFR unchanged at 4.25-4.5% and Chair Powell highlighted that following 100bps of rate cuts since September 2024, Fed policymakers do not "need to be in a hurry to adjust" the policy stance. BTC initially fell following the press release, then rallied at Powell took to the podium. The Bank of Canada continued its 6th consecutive rate cut, citing "major uncertainty" regarding tariffs.

January 30, 2025

Crypto Markets Daily Jan 29 2025

BTC’s rangebound movements is accompanied by slower activity in derivatives markets. Implied vol is sideways and the term structure is flat. The recent shakeout has not affected long-tenor vol smiles however, which still indicate a preference for OTM calls. Czech's Central Bank Governor announces plans to add Bitcoin to the nation's official reserves and Metaplanet has plans of its for its corporate Bitcoin treasury.

January 29, 2025

Crypto Markets Daily Jan 28 2025

The DXY rallied on the back of President Trump's plans to tariff steel, copper, pharmaceuticals, and foreign computer chips. Nvidia fell 17% yesterday amidst a wider equities decline, but BTC has recovered above the $100K mark. Short-tenor vol smiles are put skewed and spot ETFs saw their biggest outflows since January 8, 2025. The FOMC voting committee welcomes some new members ahead of its meeting tomorrow.

January 28, 2025

Crypto Markets Daily Jan 27 2025

BTC fell to $97K amidst a wider Trad-Fi decline. Skew levels have now dropped towards OTM puts for short-tenors with funding rate close to 0%. China's DeepSeek LLM is causing concerns about U.S. tech stock valuations. Looking ahead, the Fed and the ECB are meeting through the week amongst a slew of macro data including U.S. GDP and PCE inflation.

January 27, 2025

DeFi Analytics 24th January 2025

This week's edition of our Crypto DeFi Analytics. Trump's inauguration week made it's mark on DeFi metrics. With the official launch of $TRUMP and $MELANIA, exclusively on the Solana network, Solana saw a spike of approximately $31M fees generated in one day. Ethereum saw a similar increase in network demand on Jan 19, reflected by a spike of gas fees pricing. Uniswap v3 paints a similar picture of increased transaction count and blob gas usage remains steady around 400k.

January 24, 2025

Block Scholes x Bybit Crypto Derivatives January 24th 2025

Trump’s inauguration on Jan 20, 2025 was preceded by the launch of two Trump family meme coins, TRUMP and MELANIA, which quickly amassed billions of dollars in market capitalization. However, the rumors that a strategic Bitcoin reserve would be among the flurry of executive orders signed by Trump on day one of his administration are what saw derivatives markets positioning shift strongly toward a bullish outcome — inverting the term structure of volatility, raising funding rates levied on long positions and tilting short-tenor volatility smiles toward calls. When that bullish outcome wasn’t delivered, implied volatility levels fell, despite a pickup in realized volatility. However, the bullish skew toward OTM calls remained.

January 24, 2025

DeFi Analytics 10th January 2025

This week's edition of our Crypto DeFi Analytics. Ethereum network activity surged early in January, with gas fees spiking before stabilizing at lower levels, while blob gas usage remained steady around 400k. Excess blob gas saw a sharp drawdown this week but quickly rebounded, reflecting sustained activity on the network. Uniswap V3 continues to sustain trading activity amid a volatile market.

January 10, 2025

Block Scholes x Bybit Crypto Derivatives January 10th 2025

Bitcoin's brief climb above $100K to start the year quickly faltered as economic data cast doubt on sustained U.S. interest rate cuts, fueling inflation concerns and weighing on risk assets. Derivatives sentiment failed to support the 100k move and realized volatility collapsed amid lower trade volumes, even as open interest levels held steady. Despite the steep volatility term structure, shorter-term implied volatility is still trading at a significantly higher level than the level of realized volatility. End of December 2024 marks the largest premium of forward-looking volatility since the U.S. elections, despite no clear event risk.

January 10, 2025

Volatility Review December 2024

Despite the largest single-day expiration events on Dec 27, 2024, the volatility of BTC, ETH and SOL spot prices has been decreasing, rather than spiking, defying expectations of a volatile event driven by a delta-hedging unwind. In our December review, we cover why this was the case, highlighting that only $65.53M of the $350M BTC options expired in-the-money (ITM), including calls with strikes far above the spot price and puts below it.

January 8, 2025

DeFi Analytics 3rd January 2025

This week's edition of our Crypto DeFi Analytics. Ethereum gas fees spiked to $5 as demand rebounded post-holidays. Excess blob gas dipped slightly but recovered to 55M as Layer 2 activity resumed. Uniswap V3 also saw a holiday trading slowdown, now stabilising.

January 3, 2025

Block Scholes x Bybit Crypto Derivatives January 3rd 2025

Far from the explosion in volatility expected by some commentators, December’s end-of-year options expiration event has resulted in a collapse in realized volatility levels back to the bottom of their December range. Perpetual swap open interest levels remained consistent throughout the event, suggesting that perp markets weren’t used to hedge a significant proportion of the delta of the expired options contrasts, perhaps explaining the lack of volatility that materialized as they expired.

December 31, 2024

DeFi Analytics 20th December 2024

This week's edition of our Crypto DeFi Analytics. We highlight the stabilisation of gas fees on Ethereum's network with no significant spikes in demand. Meanwhile, blob gas usage remains elevated at 400k, revealing ongoing and sustained Layer 2 demand for data uploads. An insight into DeFi activity is marked by Uniswap V3 transaction volume on Arbitrum and liquidation activities across Aave and Compound.

December 20, 2024

Block Scholes x Bybit Crypto Derivatives December 18th

BTC’s spot price has recorded yet another all-time high, but unlike previous records this quarter, derivatives markets haven’t reflected the same leveraged bullish positioning. This is likely a result of the reset in leverage earlier last week, which has seen funding rates return to “normal” levels across the board, a letup in the growth of futures yields and a slightly less exuberant skew toward calls in options.

December 19, 2024

DeFi Analytics 13th December 2024

This week's edition of our Crypto DeFi Analytics. We highlight Ethereum's increased network demand and the change in hourly average gas fees burnt per block and excess blob gas fees associated with this. An insight into DeFi activity is marked by Uniswap V3 transaction volume on Arbitrum and liquidation activities across Aave and Compound.

December 13, 2024

Block Scholes x Bybit Crypto Derivatives December 12th

BTC and ETH’s oscillating spot levels over the last week below psychological price targets have left their mark on derivatives markets. A pullback in spot price was exacerbated by a spate of liquidations of over-leveraged long positions in perpetual swaps markets. The aftermath sees a fall in open interest in the instruments, particularly in ETH markets, and a reset of previously overheated funding rates to much lower (but still positive) levels across the board.

December 12, 2024

DeFi Analytics 6th December 2024

This week's edition of our Crypto DeFi Analytics. We highlight Ethereum's surging network activity: burnt gas fees neared 2 ETH per block alongside transfer costs peaking at $10 amid a growing ETH spot price. Excess blob gas remained elevated, exceeding 70M- a factor of consideration for Layer 2s. An insight into DeFi activity is marked by Uniswap V3 transaction volume on Arbitrum and liquidation activities across Aave and Compound.

December 6, 2024

Block Scholes x Bybit Crypto Derivatives December 5th

Following several repeated attempts, BTC has finally breached its $100K price target. The effect on derivatives markets is a clear increase in bullish positioning on top of the resilient positive sentiment that we had commented on in the build-up to the move. Perpetual swaps and futures markets reflect a persistent desire for further upside exposure. Short-tenor implied volatility, which has repeatedly inverted the term structure in tandem with spot price rallies, has risen once again as traders rush for exposure to the rally through options.

December 6, 2024

Volatility Review November 2024

November’s turbulent spot price movements had a pronounced impact on derivatives markets, highlighting notable trends in crypto volatility. The term structure of at-the-money implied volatility became a focal point in the weeks leading up to the election on November 5, 2024, as short-term implied volatility surged to levels approximately 25 percentage points higher than post-election expirations. This spike, coupled with bullish positioning observed in perpetual swaps and futures markets, underscored a strong demand for optionality at expirations near the election date, reflecting traders’ singular focus on the event's outcome. In the two weeks following the election, the term structure continued to oscillate between inversion and steepness, signaling a highly responsive market that rapidly adjusted to shifting sentiment and evolving conditions.

December 5, 2024

Bybit x Block Scholes: A Journey of Growth and Milestones Toward Becoming the No. 2 Crypto Exchange

As Bybit celebrates its sixth anniversary, it stands as a powerhouse in the crypto exchange landscape, commanding a 12.21% market share and surpassing 50 million users in 2024. With daily spot trading volumes exceeding $10 billion and perpetual swaps also dominating, Bybit’s journey reflects both its growth and the evolving dynamics of crypto markets. We explore Bybit's growth story to discover trends in BTC and altcoin trading, patterns in weekly liquidity and volatility, how institutions are reshaping the space, and what this means for your next big move. Read now to stay ahead of the market!

December 2, 2024

Block Scholes x Bybit Crypto Derivatives November 27th

A bounce-off of the key $100K price level for BTC has slowed growth in bullish positioning this week, but it hasn’t yet resulted in a sharp spate of liquidations or position closing. ETH has sustained its outperformance over the week, following the announcement of SEC Chair Gary Gensler’s January 2025 departure, and is joined in its outperformance by a swath of large-cap altcoins that had previously come under the scrutiny of the SEC under Gensler’s leadership, as reflected in bullish funding rates paid by long positions for the privilege of leveraged long exposure through the contract.

November 29, 2024

Block Scholes x Bybit Crypto Derivatives November 20th

Spot prices have surged in the two weeks since the Nov 5, 2024 U.S. elections, sending BTC far beyond its all-time price highs, while ETH has lagged behind. The implied volatility term structure has inverted once more alongside movements in spot, but longer-dated tenors remain relatively range-bound. Derivatives market indicators have shown persistently strong positive sentiment: perpetual funding rates remain constantly positive, open interest for futures contracts is growing rapidly and options skew is stubbornly positive.

November 22, 2024

Volatility Is Flaring Up

Bitcoin fell below $100K for the first time since early May, as President Trump confirmed US strikes on three key Iranian nuclear sites and on news that the Iranian parliament has voted to shut the Strait of Hormuz, a global oil chokepoint. Brent crude oil briefly surged 5% today, and is up over 10% since Israel's preemptive strikes on June 13. Ether's spot price saw more dramatic decline falling much as 12% to $2,200. A surge in front-end volatility has inverted its term structure while short-tenor smiles skewed to as much as -15%. The outlook for rate cuts amongst Fed members remains divided, with Governor Waller open to a July cut, with San Francisco President Daly pointing towards the fall. Texas becomes the third U.S. state to approve a strategic bitcoin reserve while Metaplanet targets to own 210,000 bitcoins by 2027.

DeFi Analytics 20th June 2025

This week's edition of our Crypto DeFi Analytics. The Beacon Chain balance continues to surge alongside a positive uptick in new validators entering the Beacon Chain.

Volatility Marches Lower

Crypto markets remain stable despite continued geopolitical uncertainty as the US indicates it may militarily intervene in the Middle East within the next two weeks. Volatility continues to decline — ETH 7-day at-the-money implied volatility has dropped to 63% while IV for 7-day BTC options has fallen to 33%. Despite ETH's recent term structure inversion now resolved, ETH still maintains a volatility premium over BTC. Skew remains slightly put-tilted for short tenors, while longer-dated ETH options show a stronger call skew than BTC. The Bank of England held rates at 4.25% with a more divided vote than expected, while the Swiss National Bank cut rates to 0%. Arizona has revived a Bitcoin reserve bill which was initially rejected in the House and Kraken has added BTC staking to their offering via Babylon.

Kicking The Can Down The Road

The Federal Reserve kept interest rates unchanged at 4.25%-4.5%, with most officials expecting two rate cuts this year but a more hawkish stance overall. Economic growth projections were lowered slightly, while inflation forecasts were revised higher, remaining above the 2% target through 2027. Chair Powell emphasized a cautious, data-driven approach, citing tariff uncertainties and a solid labor market as reasons to hold steady. Markets reacted cautiously, with equities ending flat and Treasury yields rising slightly. Meanwhile, cryptocurrency activity showed steady BTC inflows and a cooling in ETH accumulation, alongside notable developments in stablecoins and blockchain investment funds.

GENIUS Passes The Senate

The US Senate has now passed the GENIUS Act, the first stablecoin and crypto legislation in the US in a 68-30 vote; the bill now also needs to pass in the House. Risk-on sentiment continues to be fragile across crypto and US equity markets amid escalating Middle East tensions. BTC briefly hit $103K yesterday before paring back some losses as President Trump posted that the US has “total control of the skies over Iran”. ETH volatility has dropped at the front end over the past 24 hours though still holds nearly a 2x premium to BTC implied volatility for similar dated options. ETH Spot ETF inflows remain strong while staked ETH hit a record 35M tokens. Ark Invest sold another $44.8M in Circle shares.

Deescalation Hopes

Risk-on sentiment returned briefly as Iran reportedly signalled an openness to deescalate tensions, though that sentiment shifted once more in US equities as President Trump called for evacuations in Tehran. BTC dropped from near $109K to $106.7K, and ETH fell to $2.5K (-1.7%). ETH short-tenor implied volatility is currently nearly twice as high as similar-dated BTC options, while the ETH/ BTC 7-day realised volatility ratio is greater than 2. The Senate is set to vote today on the GENIUS Act and Trump Media has applied for a BTC-ETH ETF (75/25) while CoinShares has filed for a SOL ETF.

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.

DeFi Analytics 13th June 2025

This week's edition of our Crypto DeFi Analytics. The Beacon Chain balance has surged and liquidations stayed minimal, indicating more cautious investor behaviour.

Airstrikes Plunge Crypto

Israel launched pre-emptive airstrikes on Iranian nuclear sites, prompting a sharp response from Iranian forces. Safe haven assets such as gold and US treasuries rose, while BTC dropped to $103K (-2.3%) and ETH fell to $2,500 (-7.9%). BTC short-tenor vol spiked to 42% temporarily before dropping back down while ETH volatility remains high with an inverted term structure of volatility. Short-dated volatility smiles for ETH now carry a 5.32% premium towards OTM puts. President Trump reiterated the need for lower interest rates following a soft PPI print, though said he would not fire Chair Powell.

Cooler Than Expected CPI

The US Senate advanced the GENIUS Act (68-30), moving it to a final vote, with the House also progressing the broader CLARITY Act on crypto market structure. Trump declared the China trade war as “done,” with both sides agreeing to a tariff rate of 55% against Chinese goods and 10% against US goods. A cooler than expected CPI print has driven rate cut expectations higher once more with markets pricing in two rate cuts for the year. ETH's term structure of volatility has flattened from its inverted shape, driven by a drop in short-tenor volatility while the 7-day call-skew has abated significantly from its 7% highs.

Revived Optimism On ETH

ETH market sentiment is currently extremely bullish -- from ETH Spot ETFs maintaining their longest inflow streak of 2025 to short-tenor volatility smiles surging as high as 7%. In this report we summarise the market sentiment for the second largest cryptocurrency and list some drivers for the renewed optimism in ETH.

“If Bitcoin’s not going to zero, it’s going to a $1 million”

According to the Commerce Secretary Howard Lutnick, the US and China have agreed on a preliminary "framework on trade" after two days of negotiations in London, though market reaction so far has been muted with US equity futures down by -0.33%. BlackRock’s IBIT Spot BTC ETF became the fastest ETF to surpass $70B AUM, while Michael Saylor has said the "entire natural supply" of daily bitcoins mined is being bought entirely by Bitcoin treasury companies. ETH continues to outperform, surpassing $2,800 for the first time since late February as funding rates surge to their highest levels since January 2025.

ETH is Outperforming

BTC briefly rallied past $110K, nearing ATH levels, while ETH has outperformed the top 10 cryptocurrencies by market cap, up nearly 8% in the past 24 hours. The rally coincides with a potential easing in US-China trade tensions and renewed optimism around the GENIUS Act, poised for a cloture vote in the Senate soon as Wednesday this week. ETH options markets have surged with 30-day call-skew hitting 6.24% and funding rates spiking to 0.009%, while the term structure of volatility has reinverted once more. In South Korea, President Lee’s Democratic Party has proposed the Digital Asset Basic Act.

Cooling Tensions

US equities rallied following a stronger than expected headline print in last Friday's NFP report (139K jobs added in May), pushing the S&P 500 back above 6,000. Downward revisions to prior months however and a drop in government jobs hint at some labour market cracks. Swap markets trimmed expectations for total year-end rate cuts to 43bps, despite Trump’s push for a full percentage point cut. BTC has rebounded to $105.8K after briefly dipping toward $100K during the Musk-Trump feud, while ETH's recovery has been slower. BTC Spot ETFs saw $131M outflows last week, while ETH Spot ETFs posted $281.3M inflows. PBoC added gold for a 7th straight month and Japan’s Metaplanet has surged 15% on plans to further expand its BTC holdings.

Bitcoin and the US Bond Market

Over recent months, the US bond market has experienced sharp volatility, with 10-year Treasury yields driven higher partly by rising term premia and growing fiscal concerns — moves that have coincided with a weakening US dollar. This report examines Bitcoin’s correlation with the 10Y US treasury yield, which has surged to its highest since 2015, even exceeding levels seen during the Covid market crash in 2020. Unlike that period, the recent increase in the correlation is a result of BTC rising alongside the 10Y yield. The simultaneous selloff in Treasuries and rally in BTC suggests that investors may be looking at BTC as a diversification away from typical dollar-denominated assets.

Trump and Musk Take It Public

Crypto markets and US equities are in a sea of red amidst a public feud between President Trump and Elon Musk. BTC briefly approached the $100K mark as implied volatility levels across the term structure spiked up before coming back down and short-tenor volatility smiles remain skewed towards OTM puts. ETH is down more on the day (-4%) as volatility smiles for 7-day tenors hold a 4% skew towards puts. Circle Internet Group becomes the first stablecoin firm in the US to have an IPO, as share prices surge to 168% at the end of the first trading session.

DeFi Analytics 5th June 2025

This week's edition of our Crypto DeFi Analytics. Ethereum continues to lead Solana in daily fee generation and Beacon Chain validator exits have slowed down.

Defend Your Right to Smoke

JPMorgan will reportedly begin allowing its clients to use Bitcoin ETF shares, starting with BlackRock’s IBIT, as collateral for loans from the bank. Meanwhile, weaknesses in hard data from the US is continuing to emerge. ADP private payrolls rose just 37K in May, and the ISM Services PMI dipped below 50. Treasury yields dropped across the yield curve and BTC is currently trading at $104.6K. Circle has raised $1.1B ahead of its NYSE debut, Coinbase launched wrapped XRP and DOGE on Base, and the SEC clarified that protocol staking isn’t a securities offering.

Truth Social Bitcoin ETF

President Trump’s media firm TMTG is moving forward with its plans for a Bitcoin ETF, while other corporates like Spain’s Vanadi Coffee are also adopting Bitcoin treasury strategies. U.S. labour data showed a mixed picture, with rising job openings but increasing layoffs and falling quits. Bitcoin remains rangebound near $105K, with declining short-term implied volatility steepening BTC’s term structure, while ETH has outperformed and volatility smiles across ETH’s term structure are now all neutral to call-skewed.

It’s the Stock Market, Stupid

Dallas Fed President Logan reaffirmed the Fed's patient stance, while Chicago Fed’s Goolsbee noted little impact on the hard data so far, and reiterated that “the stock market is not the economy,” attributing current uncertainty to Trump’s tariff policy. Despite Goolsbee's claims, US manufacturing data disappointed, with ISM imports plunging to a 16-year low. BTC traded rangebound near $105K with Spot ETFs seeing outflows once again, and short-dated skew remaining in favour of OTM puts. ETH’s flatter volatility term structure contrasts BTC’s steep slope, and ETH Spot ETFs continued another day of net inflows.

“The United States of America Is Never Going to Default”

U.S. equities ended May strong, with the S&P 500 gaining over 6% despite tariff threats from Trump and weaker consumer and trade data. Core PCE inflation cooled to its lowest since March 2021, supporting expectations for two Fed rate cuts, according to Mary Daly. BTC has remained steady over the weekend at $105K, while front-end volatility has dropped off and put-call skew is negative for short-tenor options. BTC ETFs have seen sharp outflows over the past two trading sessions, in contrast to continued inflows for ETH ETFs. Meanwhile, Metaplanet became the 8th-largest corporate BTC holder, TRON overtook Cardano in market cap, and SPAC TLGY revealed plans to use ENA as a strategic treasury reserve asset.

DeFi Analytics 30th May 2025

This week's edition of our Crypto DeFi Analytics. Ethereum gas fees surged with network demand andBeacon Chain withdrawals rose slightly despite ETH's spot price hitting $2.75K.

Tariff block blocked?

The US International Trade Court's ruling of Trump’s tariffs as illegal has been rebuked by a federal appeals court. Revised Q1 GDP came in at -0.2%, a slower pace of decline than the initially projected 0.3% as markets price in 55bps of Fed cuts by January next year. BTC and ETH spot prices remain close to the lower bound of their recent ranges as BTC's term structure steepens and ETH’s term structure remains inverted. Santander is exploring a stablecoin and retail crypto rollout while SharpLink soared 1,067% on plans to buy 120K ETH for treasury.

Courts Challenge Tariffs

The U.S. trade court’s finding that the administration misused a law to impose 2 April “Liberation Day” tariffs—now under appeal—drove S&P 500 futures +1.6 % as a risk-on catalyst. Crypto markets diverged: BTC stayed range-bound while ETH rallied 5 % past $2.7K, inverting front-end implied vols and tilting the 1-week smile decisively toward calls. Pakistan hinted at a sovereign BTC reserve, GameStop revealed a 4,710-BTC buy despite a 10.9 % share drop, VivoPower secured $121M for an XRP-treasury strategy, and DeFi Dev Corp launched liquid-staking token dfdvSOL.

Fast-Track Trade Talks

FOMC minutes due at 2 pm ET should clarify the Fed’s May decision to keep rates unchanged as Chair Powell signalled patience, a stance that looks prudent amid volatile trade policy and 30-year yields briefly topping 5%. Hopes of imminent US trade deals with India and the EU lifted equities on the day (S&P 500 +2.0%, Nasdaq 100 +2.4%, Dow +1.8%), with Nvidia up 3% and Apple stabilising despite Trump’s tariff threats. Trump Media secured $2.5B in debt to buy bitcoin, despite rubbishing similar reports just one day before. Circle filed for a NYSE IPO at a $5.65B valuation, and Nasdaq sought SEC approval for a 21Shares spot Sui ETF.

Derivatives markets remain positive

Despite a rangebound spot, BTC options markets remain bullish, with the 7-day tenor volatility smile skew still in favour of OTM calls by more than 5%. ETH options maintain their volatility premium to BTC's and while ETH smile skews are slightly less bullish for tenors expiring within 30 days, beyond that, ETH skew is more strongly tilted towards calls. JGB bond yields fell today as Japan’s Finance Ministry had reportedly sent out a questionnaire to market participants to gauge their views on the appropriate amount of government bonds issuance, in an attempt to stabilise its bond markets. In DeFi, Bancor has initiated legal action against Uniswap and Trump Media Group has rebuffed a report from the Financial Times of plans to raise $3B to buy cryptocurrencies such as Bitcoin.

No Question of Stagflation

Minneapolis Fed President has warned that the tariff picture might not be clear enough by September, prompting the Fed to maintain its wait-and-see approach for a longer period, adding that "there's no question that the shock of tariffs are stagflationary". The "uncertain environment" Kashkari highlighted has certainly been on display over the past three days as President Trump went from “not looking for a deal” with the EU to "we had a very nice call" and delaying a potential 50% tariff on EU products to July 9. BTC and ETH derivatives markets maintain their exuberance – volatility smile skews are tilted towards OTM call options for short-tenors by as much as 6% for BTC while, ETH futures-implied yields for the 1–week tenor has surged from 1.77% to 5.95%.

DeFi Analytics 23rd May 2025

This week's edition of our Crypto DeFi Analytics. Daily fee generation on Solana dropped this week, rebounding to daily figures observed throughout the month, between $1.5M and $2M.

Big, Beautiful Tax Bill

President Trump's "big, beautiful" tax bill passed through the House with a slim majority and is now on its way to the Senate. According to Fed Governor Christopher Waller, players he had spoken to in the financial market thought Trump’s tax bill "was going to be much more in terms of fiscal restraint”. US equities finished lower for a third consecutive day, despite a slight reprieve in US treasury yields, while BTC holds firm at $110K. Volatility smile skews remains undeniably bullish for both BTC and ETH: the 14-day tenor for BTC is skewed towards OTM calls by 4.9%, while the 7-day tenor for ETH assigns a near 8% premium for call options. That sentiment is also evident in the futures curve.

BTC Has A New All-time High

Bitcoin's divergence from US equities were once again on display yesterday. While a weaker than expected 20Y treasury bond auction resulted in US equities having their worst close all month, BTC made several new all-time highs, topping out at $111.8K earlier today. Derivatives markets are backing the rally, with a positive futures curve and put-call skew in favour of OTM calls. Treasury yields across the yield curve have surged -- with the 10Y maturity touching 4.6%, even higher than when President Trump reversed his reciprocal tariffs tumult.

To cut or not to cut

A slew of Fed speakers so far this week have made it clear that it may take "several months" to see the true effect of the Trump administration's tariffs, all favouring a patient, wait-and-see approach to monetary policy. The S&P 500 finally takes a break after six consecutive sessions of closing higher, however BTC continues to set its sights on the January $109K ATH. Options skew has steepened significantly towards calls across tenors, with the put-call skew now at 6.2% for the 7-day tenor and implied volatility at the front-end of the term structure has rebounded to its highest level so far this month.

SEC Delays Further

Another early morning rally saw BTC edge closer towards $107K, before paring those gains back down to $105K. BTC’s derivatives markets remain more bullish than ETH’s -- the put-call skew ratio remains tilted towards OTM calls by 2.45%, relative to the neutral skew of 7-day ETH options and perpetual swap funding rates continue to show a willingness for leveraged long exposure. Yesterday, the US Senate voted 66-32 to advance the GENIUS Act, the first legislation to establish a regulatory framework for issuers of stablecoins. Separately, the SEC has once again postponed its decision on a new round of crypto ETF proposals – this time multiple spot Solana (SOL) ETFs.

Aa1

The Sell America momentum has picked up steam once again this week as credit rating agency Moody's Ratings downgraded US debt by one level to Aa1. Despite Treasury Secretary dismissing the downgrade, US equity futures trade lower on the day, while the US treasuries yield curve has steepened, as the 10Y yield now once against trades above 4.5%. A midnight rally towards $107K came with signs of some profit taking as BTC now trades back at $103K, though sentiment in derivatives markets remains positive. Perpetual swap funding rates, for example, show strong demand for leveraged long exposure.

DeFi Analytics 16th May 2025

This week's edition of our Crypto DeFi Analytics. The Pectra upgrade has resulted in a 25% rise in blob gas usage, a net Beacon Chain balance increase and a sharp uptick in validator exits.

Fee Generation On Ethereum and Solana

In this report we uncover the history of fee generation between the Ethereum and Solana blockchains, analysing when and why Solana overtook Ethereum in daily fees generated. We explore DEX volumes on both networks, dive deep into how the Dencun upgrade changed the Ethereum ecosystem and analyse the fees generated on Ethereum layer 2 solutions.

BTC Vol Drops Further

Front-end BTC volatility has continued to decline, with 7-day implied volatility now at 33% — the lowest since June 2024. Risk-on momentum picked up once again yesterday, with US equities rallying 0.4% and BTC nearing $105K again briefly, the upper bound of a recent range we have seen it trade between. US retail sales disappointed, while PPI data suggests producers are absorbing some higher costs into their markups. US treasuries rallied on the back of both data releases, as the market currently prices in two rate rate cuts over the course of the year. Separately, the Ethereum Foundation has launched the “Trillion Dollar Security Initiative”.

Trade Truce, Crypto Test

The rebound in risk-on assets reached a stumbling block yesterday as the S&P 500 ended yesterday close to flat, BTC trades near $100K and ETH is down 3% over the past 24 hours. ETH’s term structure of volatility is approaching a flat shape, following an inversion on May 11, that saw front-end volatility reach as high as 87% and ETH short-tenor smile skews which were skewed more than 6% towards OTM calls, only yesterday, are now close to neutral (0.37%). The US 10Y treasury yield once again breaches past 4.5% once again in contention with one of the administration’s stated goals of a lower 10Y treasury yield. VanEck has also introduced the Onchain Economy ETF, aiming to provide investors exposure to companies within the blockchain and digital asset sector.

Liberation from Tariffs

ETH continues its rally today, bringing its weekly performance up to 45%, outperforming both BTC and SOL. The major fluctuations in price are causing large moves in short-tenor volatility, which collapsed earlier in the week before rebounding back to 70%, and reinverting its term structure. Short-tenor smile skews for ETH have also been soaring, now assigning a 7% premium to OTM calls. In macro, Trump’s tariff war is still yet to show up in the hard inflation data as April's headline CPI fell more than expected, for the third consecutive month.

Like Liberation Day Never Happened

After its best session since April 9, the S&P 500 is now once again above its pre-Liberation Day levels, a sign of renewed risk appetite in US equities. BTC and ETH however trade lower over the past 24 hours, with short-tenor implied volatility collapsing as much as 17 percentage points for ETH. Front-end volatility smiles remain skewed towards OTM calls for BTC however. Markets are now pricing in only two rate cuts from the Federal Reserve this year, a major change from the four rate cuts priced in only one month ago and the 2Y treasury yield has surged 12bps to touch 4.0% earlier today.

The Art of the Deal

After weeks of tit-for-tat tariffs between the two largest economies in the world, the US and China have announced a trade deal that will see the US lower tariffs on Chinese goods from 145% to 30% for 90 days. The long-awaited detente in the trade war has sent risk-on equities soaring as Nasdaq-100 futures soared as much as 4%. BTC currently trades close to $105K as short-tenor implied volatility has slowly trended up 10 percentage points since reaching a local bottom of 35% on May 2 and volatility smiles continue to be skewed 3% towards OTM calls. ETH spot and derivatives markets still show a stronger reaction however -- ETH is up 3% on the day and its front-end volatility trades with nearly a 2x volatility premium compared to BTC short-tenor volatility.

DeFi Analytics 9th May 2025

This week's edition of our Crypto DeFi Analytics. Ethereum's daily fee generation spiked as ETH rallied, yet Solana still generated more fees. Meanwhile, interest in validators joining Ethereum's Beacon Chain rebounded.

Don’t Discount ETH Just Yet

Risk-on sentiment surged after President Trump announced a UK trade deal and hinted at easing China tariffs, lifting both equities and crypto. The S&P 500 and Nasdaq-100 posted gains, but ETH surged 23% — its biggest single-day jump since May 2021 — amid the rollout of the Pectra upgrade. BTC also broke through $100K, although derivatives markets didn’t treat the level with as much psychological significance as before. Altcoins like SOL, ADA, and XRP followed the bullish momentum, while regulatory and infrastructure developments — from Arizona’s crypto reserve fund to Bolivia’s digital currency plans — pointed to growing global crypto integration.

Powell Favours Patience, BTC Favours $100K

Only yesterday options markets were assigning a below 10% chance that BTC would cross $100K in the next 24 hours. Bolstered by news that the US administration has reached a trade deal with one of its partners, it has now rallied right to those doorsteps. ETH has followed BTC up, outperforming in spot, though remains less bullish than BTC across an array of derivatives market sentiment indicators. The FOMC opted to leave interest rates unchanged at 4.25-4.5% for a third consecutive meeting while Chair Powell reiterated a cautious, "wait-and-see" approach. Defending that approach, Powell argued that tariff uncertainty may put the Fed in a "potential situation" where it faces a trade-off between the two sides of its dual mandate -- however cautioned that for now, that trade-off has not yet materialised.

10-Point Stimulus

Risk off sentiment prevailed on Wall Street for a second consecutive day as President Trump's tariff stance continues to weigh on markets. However, a late evening announcement of a trade meeting between the US and China resulted in BTC rallying, alongside US equity futures. BTC spot rose from $94K to $97K as implied volatility across the term structure bounced up. Complementing the higher volatility expectations is a rebound in the put-call skew ratio, particularly at the front-end, which has shot up towards calls (at 2%) once again. The PBOC announced a 10-point stimulus plan including a cut to the seven-day reverse repurchase rate and the reserve requirement ratio (RRR) for banks.

Nine Session Break

US equities break a nine day consecutive rally as BTC continues to trade in a range of $93K and $97K. Despite April's tariff uncertainty continuing into May, implied volatility levels are markedly lower compared to April levels. The premium that traders had assigned to out-the-money BTC calls at the start of the month has now faltered closer to neutral for short-tenors. That move has been more emphasised in ETH, where skew is now tilted towards puts for tenors shorter than 30 days. Strategy continues to expand its Bitcoin holdings while Florida’s strategic Bitcoin reserve bill has been “indefinitely postponed and withdrawn from consideration”.

Bounce off the floor

Risk appetite continued to recover as U.S. equities posted an eighth consecutive gain, with Bitcoin extending its three-week rally to briefly touch $97K. BTC short-tenor volatility rose to 40%, while option skews shifted further in favor of out-of-the-money calls. Gold declined to a two-week low despite remaining up 24% YTD. Treasury Secretary Bessent noted that bond markets are signaling the need for Fed rate cuts, citing two-year yields below fed funds. Meanwhile, Abu Dhabi’s MGX announced a $2B investment in Binance via the Trump-backed USD1 stablecoin, which has now integrated with the Tron network.

“Give us a pass”

A slew of data releases show signs of faltering in the US economy under President Trump. Q1 GDP for 2025 contracted by 0.3%, headline PCE inflation rose to 3.6% in the quarter and the ADP jobs data showed private employers added the lowest number of jobs since July 2024. BTC pared back its losses following the data releases and continues to trade at $95K. It's implied volatility has continued to tail off and is approaching a floor of 35% for short-tenors. This is a level that we have seen implied volatility touch and then rebound from consistently over the past 18 months. Volatility smile skews at longer tenors stills remain bullish, tilted towards OTM calls.

SUI Staking Unpacked

Staking is a widely used method for earning yield on cryptocurrencies and plays a vital role in securing Proof of Stake (PoS) blockchains. In the PoS model, validators are incentivised to help maintain the blockchain’s integrity and ensure its continuous operation through staking rewards. These validators are responsible for processing transactions, maintaining consensus, and upholding both the security and decentralisation of the network.

The Cracks Are There

BTC continues to consolidate at $94K, having outperformed gold, US tech stocks and the S&P 500 index in April. That rally has been supported by strong demand from the Spot ETF products which continue an eight day consecutive run of inflows. Despite risk-on assets trading with a cautious sense of optimism, signs of weaknesses in the US economy are growing. The JOLTS report for March showed the lowest number of job openings since September 2024 and the Conference Board’s index for confidence dropped 8 points to its lowest reading since May 2020.

Day 100

Spot BTC ETFs continue their recent string of heavy inflows with BlackRock's IBIT fund seeing its second largest inflow on record yesterday. As the Spot ETFs continue to support BTC's recovery rally, improvements on the regulatory front include Arizona lawmakers passing the Arizona Strategic Bitcoin Reserve Act. If approved by the state's governor, the bill will allow the state's public funds to invest up to 10% of their funds' value in digital assets, specifically bitcoin. Treasury Secretary Scott Bessent continues to reiterate that the tariff ball is in China's court and it is up to China to de-escalate tensions. In the meantime, the US will focus on its trade relationships with 15-18 other trading partners.

Tariffs and Tensions

Markets continue to await a trade deal as we approach day 20 of Trump's current 90 day tariff pause. During a Time Magazine interview, President Trump stated that he was not influenced by the bond market to pause his reciprocal tariff program and that trade deals can be expected to be wrapped up within 3-4 weeks. ETH outperformed BTC last week, a rarer phenomenon through the progression of this crypto cycle, however is still down 4% on the month. Its options markets are pricing in a flat term structure of volatility and its put-call skew has mostly been on the downward path since a recent high of 6% last week.

Policy-by-tweet

Shorter maturity US treasuries rallied after comments from Cleveland Fed President Beth Hammock and Governor Christopher Waller who have advocated that the Fed is ready to change policy as early as June, provided "clear and convincing data", or a "serious deterioration of the labour market". US equities and crypto markets extend their rally with SUI standing out as a major gainer, up 22% over the last 24 hours. In derivatives markets, at-the-money implied volatility for BTC, ETH, and SOL has continued to trend down and BTC funding rates on the other hand briefly fell even further to -0.009%, a new low for April.

Bitcoin Breakout

Bitcoin appears to have regained the momentum it lost in January – surging back above $94K just weeks after brushing a 2025 low of $75K. Despite US equities (and all other US assets, frankly) breathing a sigh of relief this week after Trump relinquished the worst of his tariff brinkmanship, BTC had held firm even before that.

Subject to Revision

Dollar-denominated risk-on assets rallied yesterday before paring back some of those gains as President Trump clarified that he has not yet brought down tariffs against China from 145%. BTC has pared back some of its gains from $94K down to $92K and options markets don’t appear to be strongly backing a continuation of the relief rally. ETH’s term structure has flattened again while BTC’s has steepened, led by a 9 point decline at the front-end. The bias towards calls that resulted in a skew ratio of over 6% for ETH has now relented to a lower but still high 3% and BTC funding rates have turned negative. Spot BTC ETFs continue a streak of large inflows and 21Shares has filed for a SUI Spot ETF.

Back to $94K

BTC surges to $94K, a level it last traded at in late February as President Trump offered promising signs of a trade deal between the US and China. ETH has seen the biggest move among the top 10 crypto tokens by market cap, up over 10% on the day and briefly reclaiming $1.8K. That sharp spot move has caused an inversion in its term structure as front end volatility shot up by 9 points in response to a high demand for short-dated optionality. Short-tenor skew for ETH also reached its highest levels since March 30. In another sign of the changing sentiment, BTC Spot ETFs had inflows of $912.7M – the seventh largest daily net inflow since their January 2024 launch.

Vol has bounced, but is still low

As US equities continue to selloff, BTC has remained resilient currently trading at $88K. Options markets are pricing in slightly higher volatility from their recent lows of 35% for shorter expiries, though still remain at low levels. Front-end volatility for ETH has followed BTC up, though its term structure is much flatter relative to BTC's and other measures of sentiment still show an outsized bullish outlook for BTC than for ETH. President Trump continues to comment on monetary policy, stating that “there is virtually No Inflation” and that Chair Powell should be cutting interest rates.

A US Recession through the lens of Polymarket

In this report we will explore the probability of a US recession based on on-chain Polymarket data. We will then also identify some differences in the probabilities between several related Polymarket markets that track the path of monetary policy by the Fed, and compare them to similar measures in traditional finance markets. Our goal is to highlight the discrepancies in sentiment based on data from on-chain and off-chain markets and identify some dislocations between markets.

The Lowest Levels of Vol in Over a Month

BTC’s options markets are pricing-in their lowest level of implied volatility in over a month as options with a 7-day tenor trade with an implied volatility of just 35%. Despite continuing to price in a premium over BTC, ETH’s front-end implied volatility has trended down too. Equity markets were largely unmoved yesterday as President Trump continues to clash with Chair Powell over the pace of monetary policy in the US. US treasuries pared their gains on Thursday after a three-day rally, with the yield curve steepening further: the yield on the 10Y and 30Y tenor rose by 5 and 6bps, respectively.

No, With An Explanation

Chair Powell's comments that the Fed is still "well positioned to wait for greater clarity" and denying of a Fed Put in stock markets sent equities sinking yesterday. BTC briefly fell but regained its position as the crypto market trades in a sea of green today. BTC and ETH front-end ATM implied volatility trade at their lowest levels all month, following a drop in realized volatility for both assets. US retail sales saw their biggest monthly gains in over two years, as consumers try to front-run Trump's tariffs and the Bank of Canada's quarterly monetary policy report outlined a potential scenario where US tariffs induce a “significant" year-long recession in Canada.

It's Calmest Before The Storm?

A calmer trading session yesterday which saw 10Y treasury yields fall slightly and US equities end the day close to their opening prices was disrupted when Nvidia announced it faces restrictions on the export of its H20 chips to China. BTC spent the day steadily chopping downwards and its implied volatility across tenors declined, led by moves at the front-end. In an interview with Yahoo Finance, Treasury Secretary Scott Bessent shrugged off speculations that China has been selling US treasuries and added that he thinks the Fed would intervene “if treasuries hit a certain level." In DeFi, Sui has expanded its partnership with Babylon Labs to launch a Bitcoin Secured Network.

The Fifth Inning

US treasuries end a five day consecutive selloff as the 10Y yield declined by 10bps yesterday. Treasury Secretary Scott Bessent believes the selloff was not due to a "dumping" of treasuries by foreign holders. The relief in bond markets extended to equities and crypto, with BTC trading close to $86K. Its term structure of volatility has normalized while ETH's term structure is now flat, having been inverted for most of the month. Alternative safe haven assets continue to outperform with gold up 8% since mid-March, coinciding with a significant explosion in trading on the Shanghai Futures exchange.

Nobody Is Off The Hook

President Trump’s mixed tariff signals continue as his administration announced a tariff exemption for an array of consumer electronics before Trump responded on Sunday evening that “NOBODY is getting ‘off the hook’”. The continued uncertainty around tariffs saw the 10Y US treasury yield surge to an intraday peak of 4.56% on Friday and the US dollar is down close to 7% since mid-March. BTC’s term structure of volatility is flat at longer-tenor vol followed the front-end up and the 25delta put-call skew ratio has recovered significantly over the week. ETH futures markets for 1 week expiries are still trading at a discount to spot, albeit that discount has narrowed since April 12 where the annualized yield was -6%.

Vol is Abating but Xi and Trump’s Tariff War is Not

The US CPI report for March showed inflation beating expectations on all counts with core CPI at 2.8%, the lowest since 2021. That did little to change market sentiment however. After Wednesday's tariff pause induced rally, an exodus of selling across US equities, treasuries and the dollar was in full flow on Thursday. The USDCHF sunk to its lowest levels since 2011. While BTC’s inverted term structure has abated, escalation between China and the US has not, with the Chinese Finance Ministry announcing a further increase in levies against US goods to 125%. Volatility smiles at all tenors remain skewed towards puts, with short-dated optionality continuing to express a far stronger bearish sentiment.

America Blinks First…

Markets have U-turned from weeks of negative price action as President Trump reversed on his "reciprocal tariffs" policy only a week after their announcement. The S&P 500 posted its best day since 2008 and BTC has rallied to $82K. Its term structure inversion has now abated and is close to a flat curve, matched with a major recovery up in put-call skew, particularly for shorter tenors. Separately, Paul Atkins has been officially confirmed as the new SEC chair following a 52-44 Senate Vote.

Good Medicine Is Bitter?

So far this week both US equities and treasuries have been selling off. Those selloffs accelerated following President Trump's announcement of 104% tariffs on Chinese imports. Concurrent to the equity selloff which has seen the SPX fall 12% lower than before Trump’s “Liberation Day” tariffs, the 30Y yield is now at its highest since November 2023 and 10Y yields have surged over 30bps this week so far. The MOVE index, a gauge of US Treasuries’ implied volatility, has risen to its highest levels since October 2023 and similarly, at-the-money implied volatility for BTC has spiked upwards over the past 24 hours across all tenors too, particularly at shorter-maturities which has further steepened the inverted term structure.

Is Bitcoin Finally Decoupling from Equity Markets?

This is not another post about tariffs and a global economic meltdown. We’re only interested in exploring these events through a crypto lens, and ultimately, what they mean for crypto assets.

You can intimidate everybody

Volatile moves in both US bond markets and equity markets saw the 10-year treasury yield rally 14bps following a drop below 4% earlier in the day. That move meant 10-year yields are now back to their "Liberation Day" levels while US risk-on equities trade 10% lower. Crypto markets have bounced back slightly so far today however in derivative markets, both BTC and ETH volatility smile skews are still indicative of put demand. The most recent inversion of the term structure of at-the-money implied volatility has also relented – something we have seen more than a few times over the last three months. The first XRP-based ETF in the U.S. market is also set to start trading today on NYSE Arca, offering leveraged 2x daily exposure to XRP.

Lagged Move or Canary in the Coal Mine?

Last Friday marked the worst two day performance by the S&P 500 since 2020, while the Nasdaq-100 officially slid into a bear market. BTC however held up for the first half of the weekend, rallying from $82K to $84K amidst the US Treasury Secretary stating it is "becoming a store of value". However, that brief decorrelation was exactly that -- brief. Since Sunday, crypto markets are down with both BTC and ETH's term structures significantly inverted. Puts are in high demand with BTC’s 25delta skew briefly dropping to its lowest since March (a level that, excluding March, was last seen in April 2024). Japan’s Nikkei 225 is down 7% and the Hong Kong Hang Seng index has fallen by its most since 2008 as the fallout from tariffs extends across the world.

The Highest Weighted Average Tariff Rate in a Century

After the unveiling of his reciprocal tariffs, the US weighted average tariff rate is now the highest it has been in a century. The S&P 500 Index experienced its largest single day loss since June 2020 and BTC fell to $81K. Despite those moves, President Trump claimed "the markets are gonna boom". That's clearly fallen on deaf ears in derivatives markets where BTC and ETH volatility smiles are still majorly skewed towards puts. Separately, Coinbase has filed with the CFTC to launch a new XRP futures contract which, if approved, will launch on April 21.

No Positive Reciprocation From Markets

President Donald Trump finally announced his reciprocal tariff plans, which will see the US apply a baseline 10% tariff on all exporters to the country, with customised duties on top of that baseline. Trump has promised “these tariffs will give us growth like you haven’t seen before". Financial markets have not reciprocated that sentiment however. US equity futures had fallen as much as 4% within the announcement with BTC moving in the same direction. With it, its term structure of volatility briefly inverted. Short-tenor skews have once again crashed down towards puts, with demand lop-sided towards further protection against downward moves. For BTC, only tenors above 4 months hold a premium towards calls.

Weak Data Continues…

A slew of weaker economic data from the US continues into this week as the ISM Manufacturing Index, JOLTS, and S&P Global Manufacturing PMI readings all came in below expectations. Despite those weaker readings, US equities ended the day higher. Treasuries options markets show the 1-month tenor 25-delta put-call skew ratio for the 10Y, 5Y and 2Y treasury notes are at their highest levels towards calls since August 2024 and in crypto options markets, ETH's term structure still remains inverted. In DeFi, stablecoin issuer Circle has filed for an IPO in the US.

American Bitcoin

With "Liberation Day" on the horizon, assets across the board went through a whirlwind of prices yesterday. The S&P 500 and Nasdaq-100 both dropped sharply at their opening, before paring those losses back. Crypto derivatives markets saw much of the same rollercoaster moves with implied volatility levels having plunged down following their explosion upwards yesterday. That has resulted in a flatter term structure for BTC compared to yesterday, whilst ETH's term structure is still inverted. That drop in volatility comes as BTC spot price and ETH spot price currently trade 2% and 4% higher on the day. Separately, Eric and Donald Trump Jr. have partnered with Hut 8 to launch a large-scale U.S. bitcoin-mining venture named American Bitcoin.

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.

World Liberty Financial — A Trump Backed Project

World Liberty Financial is a yet-to-be-released DeFi platform backed by President Trump (the ‘Chief Crypto Advocate’ for the project). In this report, we take a deep dive into everything World Liberty Financial – covering the Goldpaper (the President’s version of a crypto whitepaper), the tokenomics of the WLFI token, the revenue model of the business, and some of WLF’s current partnerships. Along the way, we will unravel some interesting insights behind the intention and potential end-goal of the Trump family’s crypto endeavour.

Introducing Rho Protocol

Rho Protocol is the first crypto-native rate derivatives exchange. Rho rates futures are financial derivatives which allow users to trade fixed-to-floating rate swaps on BTC and ETH perpetual futures funding rates and on ETH staking rates. In this report, we uncover how exactly Rho Protocol works.

What A Week!

We’ve previously spoken about idiosyncratic factors in Bitcoin’s favour that could break its correlation to equities – the post-halving halving impact on supply, the ETF effect on demand, and a positive regulatory environment. But wow, what a week – Bybit’s exchange hack, record outflows in the Spot Bitcoin ETFs, and the 90% plus drops in a multitude of Solana memecoins launched by high-ranking officials across different nations would have been enough to damage bullish sentiment without risk-on sentiment tanking across all assets.

February 28, 2025

Breaking Bitcoin’s Correlation With Macro

Historically BTC's returns have been driven by three main drivers. One of these drivers, mainly the macroeconomic backdrop is posing strong headwinds for risk-on assets. With BTC's strong correlation to US equities, one would expect it too could suffer from the more hawkish macro environment. In this report we delve into the remaining two drivers that are supporting Bitcoin and pose an argument that it could potentially detach from its macro correlation with US equities in the long-term as a result of these unique, idiosyncratic factors.

February 18, 2025

Ripple (XRP) - The Fundamentals

Ripple’s native coin XRP, has resurged from relative obscurity to become the third-largest cryptocurrency by market capitalization, overtaking prominent contenders like Solana. This report delves into Ripple’s utility, distinguishing between Ripple’s native coin XRP, Ripple’s global payment system RippleNet, and the blockchain they are both built on, the XRP Ledger (XRPL). We also deep dive on the mechanics of the XRP Ledger and the additional utility it provides for businesses. With its ability to challenge traditional payment systems like SWIFT, Ripple is once again positioned as a pivotal player in the financial technology space.

February 3, 2025

Crypto Markets Daily Jan 24 2025

President Trump makes good on his promise to make the U.S. the 'crypto capital of the world' with the announcement of two major crypto policies. Spot price is whipsawing, and derivatives sentiment for options is still skewed towards calls for short and long-tenors. The jury is still out on whether a Strategic Reserve means piling up on bitcoins only, or will include altcoins too, in the chance one will be created at all.

January 24, 2025

Crypto Markets Daily Jan 23 2025

The wider crypto market seems to be hinging on some news from President Trump to escape its current tempered sentiment. BTC short-tenor skews are close to 0% and our Senti-Meter Index has fallen from its euphoric levels. ETH struggles to outperform as it has on previous SEC news, despite a new crypto taskforce being announced and the ETF-filing mania continues.

January 23, 2025

Crypto Markets Daily Jan 22 2025

The SEC has unveiled a dedicated cryptocurrency task force led by Commissioner Hester Peirce, aiming to establish “comprehensive and clear” digital asset regulations in collaboration with other agencies like the CFTC. This announcement, following a brief market dip around President Trump’s inauguration, has reinvigorated market sentiment, with BTC holding steady at $105K and ETH seeing modest gains. Despite subdued implied volatility and a flattening term structure, realized volatility has surged to pre-election levels. Meanwhile, excitement builds around new ETF filings, including high-profile crypto and even memecoins, as Solana’s price momentum continues. In DeFi, Uniswap Labs is poised to deploy Uniswap v4, promising further innovation in the sector.

January 22, 2025

Crypto Markets Daily Jan 21 2025

President Trump's inauguration speech fell short of any mention of BTC or cryptocurrencies which has seen BTC price drop from its $109K level. BTC skew levels are still assigning a volatility premium for calls over puts, however funding rates have fallen significantly. The DXY fell as Trump also failed to announce any immediate tariffs.

January 21, 2025

Crypto Markets Daily Jan 20 2025

President Trump launched his very own crypto memecoin, and the incoming First Lady followed in pursuit. The result was the Solana token reaching new ATHs, Solana DEXs registering record trade volume and then a subsequent partial network crash which saw the USDT/ USDC pair depeg and Solana fall down to $232. BTC crashed down to $99K before rallying to its own new ATHs amidst speculation of a SBR. Derivatives metrics by all counts are showing extreme euphoria for BTC, but less so for ETH.

January 20, 2025

Crypto Markets Daily Jan 17 2025

Derivative and spot markets have been quick to react to the the recent speculation regarding President-elect Trump's executive crypto order. Futures yields and perp funding rates have skyrocketed with implied vol levels reflecting similar sentiment. China meets its annual growth target amidst extensive monetary and fiscal stimulus and there are interesting, new developments in DeFi for the Bitcoin ecosystem.

January 17, 2025

Crypto Markets Daily Jan 16 2025

With the recent lack of crypto-positive news, spot prices have been at the helms of macro drivers which haven't been great for risk-on sentiment either. However, risk-assets were buoyed on by the U.S. CPI print yesterday with Bitcoin trading close to the $100K mark once again. Skew levels for BTC and ETH have shifted their bearish tilt from OTM puts towards calls for short-tenors.

January 16, 2025

Crypto Markets Daily Jan 15 2025

Markets are eagerly awaiting the U.S. December CPI release. We believe should the figures exceed expectations, Bitcoin is likely to experience a short, but sharp move downwards. Following yesterday's spot price move up, ETH's term structure has inverted and Bitcoin's is flat.

January 15, 2025

Crypto Markets Daily Jan 14 2025

In the face of a second week of potentially scary macro data releases, and despite FUD caused by speculation of the U.S.’s selling of $6.5B worth of bitcoins, BTC spot bounced decisively from $90K levels to trade closer to $97K this morning. Derivatives markets remain supportive of the move: futures yields are positive and trending higher, with short tenors rallying harder to invert the term structure.

January 14, 2025

Paxos Gold – A Form of Digital Gold

Gold has a long history as a medium of exchange in the global financial system. However existing forms of trading gold all come with significant trade-offs. This report serves as a comprehensive deep dive into Paxos Gold – a tokenised stablecoin backed by gold reserves that offers investors an alternative avenue to own investment-grade physical gold with all the benefits of the blockchain.

January 13, 2025

Crypto Markets Daily Jan 13 2025

A bearish crypto market sees a flight to (relative) safety, as Bitcoin dominance remains solid despite its historical post-halving performance. A tough week of macro data last week could be followed by another this week, with markets expecting an uptick in CPI. Crypto options markets signal bearish sentiment in the short term, with skew favoring puts on BTC and ETH. Regulatory developments add to the uncertainty, with Bybit restricting services in India, Polymarket banned in Singapore, and Mango Markets shutting down operations following an SEC settlement.

January 13, 2025

Crypto Markets Daily Jan 10 2025

Crypto-assets are showing a slight recovery today, ahead of this afternoon’s much anticipated U.S. Nonfarm Payroll Report. Should that report show a blowout number of jobs added in December beyond the 160,000 expectation, the JOLTS Report earlier this week sheds some insight into how risk-assets may react. Derivatives markets are showing mixed messages as they try to price in the varying outcomes. AI tokens and AI agents are also outperforming the market significantly.

January 10, 2025

Crypto Markets Daily Jan 09 2025

With BTC, ETH, and most of the majors all moving downwards today, derivatives markets are showing a cautionary tale too. Both BTC and ETH's volatility smiles are skewed strongly towards puts for short-tenor options. However, it's not just spot prices that are moving down slowly, as the Fed's sticky inflation adversary dominated much of the Meeting Minutes. In China, the opposite battle is unwinding, unravelling an interesting relationship between U.S. and China's interest-rate differentials and their relationship to BTC.

January 9, 2025

Crypto Markets Daily Jan 07 2025

The institutional flow of capital was itching to get Bitcoin above $100K with two consecutive trading days of Spot ETF inflow levels last seen in November. However, derivatives markets weren't quite in the mood to join the party when BTC did eventually push past that level – BTC has entered a new regime where $100K is no longer a catalytical event for volatility or further rallies. Perhaps rightly so, as today's JOLTS report has sent risk assets back down again.

January 7, 2025

Crypto Markets Daily Jan 06 2025

Despite BTC’s spot price moving firmly back into bullish territory at the turn of the year, the positive momentum of sentiment in derivatives markets did briefly falter. The slowing down in sentiment momentum however is more true for ETH than it is for BTC and ETH's funding rates and futures-implied yields show this despite remaining net-bullish. It is a big week for macro as NFP figures for December is expected to show a strong labour market and MicroStrategy has a new party trick to help fundraise further Bitcoin purchases.

January 6, 2025

Crypto Markets Daily Jan 03 2025

BTC and ETH have stabilised after brief rallies, with BTC rangebound and ETH holding near $3,500, while ADA has surged 10% to $1.06, decoupling from the broader market. Implied volatility has dipped across shorter tenors but remains elevated longer-term, with ETH showing a sharper decline in demand for upside exposure. Market sentiment remains cautious, influenced by ETH Spot ETF outflows and separately, selling pressure from SUI's token unlock.

January 3, 2025

Crypto Markets Daily Jan 02 2025

The year starts green with a New Years rally across crypto markets – amongst the top 10 by market-cap, all majors are up, with XRP being a stand-out performer. Derivatives metrics are portraying the sentiment too – with perp funding rates for BTC and ETH up, as well as short-tenor futures yields. Options markets are equally showing a similar willingness for long exposure.

January 2, 2025

Crypto Markets Daily Dec 31 2024

Crypto markets move sideways yet Bitcoin has found footing at the $94K mark, and ETH is ranging around $3.4K. Despite MicroStrategy's acquisition of 2,138 BTC for $209M, significant outflows in Spot BTC ETFs ($377.6M) have maintained downward pressure, contributing to a cautious sentiment reflected in BTC skew. Short-term volatility smiles lean towards downside protection, but longer tenors signal optimism, with expectations for price increases after the New Year.

December 31, 2024

Crypto Markets Daily Dec 30 2024

BTC drops again to $93.8k and ETH remain range-bound between $3.3–$3.5k, as broader crypto markets continue their bearish trend. Implied volatility levels have dipped across tenors, reflecting low activity, while skew indicates cautious optimism for BTC and broader outperformance by ETH. Macro concerns persist as the U.S. debt ceiling debate looms, adding to the risk averse macro backdrop.

December 30, 2024

Crypto Markets Daily Dec 27 2024

The illiquid Christmas period continues as the S&P 500, Nasdaq, and Dow Jones barely moved yesterday. U.S. Treasury yields on the longer-end of the yield curve did ease slightly however, with 10Y tenors dropping in yesterday's session. After 4 consecutive trading days of strong outflows, the Spot BTC ETFs finally recorded net inflows of $475.2M. Derivatives metrics largely reflect the same sentiment as they did yesterday with BTC and ETH's at-the-money volatility term structure largely unchanged. Both majors' volatility smiles indicate continued cautiousness in the short-term with long-run expectations for a continuation of the bull-run.

December 27, 2024

Crypto Markets Daily Dec 26 2024

Yesterday BTC ranged at the $98K level before briefly touching $99.9K – we didn’t get everything that we asked for on our Christmas list as it now changes hands closer to $95K. Most of the market is back to a sea of red – within the top 10, only two coins are green on the day. But while traditional markets are quieter over the break, we would not discount crypto signalling any larger macroeconomic event in this period. Without any obvious macroeconomic data releases expected until the new year, it’s unexpected macro news that we are on the lookout for as likely drivers of volatility.

December 26, 2024

Crypto Markets Daily Dec 25 2024

It’s a quieter day in Trad-Fi as the market closes for Christmas day, but U.S. treasuries continue to feel the pressure with the 2s10s yield curve steepening further. Whilst Trad-Fi markets rest, crypto has had a relatively quieter day too, though we do see some signs of life as BTC looks ready to at least try close the year above the $100K mark. December’s end-of-year options expiration is poised to be one of the biggest yet though we believe that it is unlikely to create much volatility beyond Friday.

December 25, 2024

Introducing Rho Protocol

Rho Protocol is the first crypto-native rate derivatives exchange. Rho rates futures are financial derivatives which allow users to trade fixed-to-floating rate swaps on BTC and ETH perpetual futures funding rates and on ETH staking rates. In this report, we uncover how exactly Rho Protocol works.

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