Thahbib Rahman
Research Analyst
Last Updated:
September 12, 2025
•
15 min read
Bybit x Block Scholes Crypto Derivatives Analytics Report September 12, 2025
A sideways slog in spot prices over the past week means that the bearishness in options markets positionings for both BTC and ETH continues. Volatility smiles across the term structure for BTC continue to price OTM puts at a premium to call options, while short-dated ETH options are also maintaining their expectations for further downside price action. The main driver of spot prices this week has been macro-induced events, on both sides of the Fed’s dual mandate. An ever so slightly hotter than expected CPI print pushed BTC lower after it tapped $114K, though it quickly recovered. The inflation print came after a slew of data releases pointed to a marked weakening in the US jobs market: including JOLTs data and NFP. Markets are now bracing for three rate cuts by the Federal Reserve by the end of the year.
Key insights
A sideways slog in spot prices over the past week means that the bearishness in options markets positionings for both BTC and ETH continues. Volatility smiles across the term structure for BTC continue to price OTM puts at a premium to call options, while short-dated ETH options are also maintaining their expectations for further downside price action. The main driver of spot prices this week has been macro-induced events, on both sides of the Fed’s dual mandate. An ever so slightly hotter than expected CPI print pushed BTC lower after it tapped $114K, though it quickly recovered. The inflation print came after a slew of data releases pointed to a marked weakening in the US jobs market: including JOLTs data and NFP. Markets are now bracing for three rate cuts by the Federal Reserve by the end of the year.
The expected injection of liquidity from rate cuts has sparked a bigger upwards move in altcoins and less so in the majors BTC and ETH. Standout performers this week include SOL, which is up 11% on the week, and Worldcoin (WLD), both of which have outperformed on digital asset treasury announcements. A relatively unknown inventory-and-packaging company named Eightco Holdings was the company to announce the world’s first Worldcoin digital asset treasury, which sent its share price soaring higher too.
Perpetuals: Open interest in perpetuals has picked up from last week’s flat $15B, while daily trading volumes reached their monthly high following an anemic jobs data report from the US last Friday.
Options: It’s been another week of bearish positioning in options markets, which hasn’t been aided by range-bound spot prices. Both delivered and implied volatility across BTC, ETH and SOL have fallen over the past week.
Block Scholes BTC Senti-Meter Index
Block Scholes ETH Senti-Meter Index
Block Scholes’s Senti-Meter Index aggregates the funding rate, future-implied yield and volatility smile skew into a single expression of sentiment in derivatives markets. See more in the methodology article here.
It isn’t just BTC and ETH treasuries
Eightco Holdings, an inventory capital and management platform for e-commerce sellers, has surged as much as 2,700% over the past five days after announcing plans of a shares sale of $250M to buy and hold Worldcoin (WLD). WLD is the cryptocurrency behind the biometric digital identity project of OpenAI’s CEO, Sam Altman. Eightco Holdings said it would “implement the first-of-its-kind Worldcoin treasury strategy.” The largest ETH treasury company, Bitmine Immersion Technologies, Inc., has purchased 13.7 million common shares of Eightco for $20M, a sign of its backing of the project.
Together, the news sparked a dramatic move in Worldcoin’s token. Over the past seven days, frenzied buying has sent the WLD token 111% higher. On Sep 8, 2025, prior to the announcement, WLD had been trading sideways between $0.90 and $1 for the past six months.
Despite an eye-watering rally however, those who had purchased Worldcoin back in March 2024 — during the peak of meme coin mania and a market-wide crypto rally following the launch of BTC Spot ETFs — are still down significantly. The WLD token reached its all-time high of $11.74 on Mar 11, 2024, and has since lost nearly 90% of its value.
Worldcoin’s spot price following the treasury reserve announcement
FUNDING RATES
Macro, tech & regs
Macro calendar & recent events
- US Nonfarm Payrolls Annual Revision — Sep 9, 2025 — The US economy created 911,000 fewer jobs in the 12 months leading up to March 2025 than was initially reported.
- US Core PPI for August — Sep 10, 2025 — Core producer prices declined 0.1% in August 2025 from the prior month, compared with expectations for a 0.3% increase.
- US Core Inflation Rate for August — Sep 11, 2025 — Year-over-year CPI came in at 2.9%, as expected, though above the 2.7% reading in July. Month-over-month, CPI exceeded expectations, rising 0.4%, against an expected 0.3%.
- Euro area ECB interest rate decision — Sep 11, 2025 — The European Central Bank kept interest rates unchanged at 2.15%.
- US Initial Jobless Claims — Sep 11, 2025 — Initial jobless claims climbed to 263,000 for the week ended Sept. 6, higher than the 235,000 estimate.
- US Michigan Consumer Sentiment for September — Sep 12, 2025 — Consumer sentiment is forecasted to have decreased to 57 from 58.2.
Nonfarm jobs seasonally adjusted — This year has seen a large slowdown in the number of jobs as compared to previous years. In August, only 22,000 jobs were added, well below July’s revised gains of 79,000.
Trending news
- Digital media advertising and technology service company QMMM Holdings Ltd. (NASDAQ: QMMM), has announced the creation of a new blockchain-based decentralized data platform.
- On Tuesday, BBVA, one of Spain’s largest banks, announced a partnership with Ripple to bring Ripple Custody to its new retail crypto platform, supporting Bitcoin and Ether trading and storage for Spanish customers. The technology is already being used by BBVA in Switzerland and Turkey.
Open interest rises slightly to $16B
Key insights
Open interest in leveraged swaps markets has risen by just over $1B after lingering last week around the $15B mark. Then, it was macro uncertainty and a global rise in government bond yields that stopped traders from placing any outsized bets. This week, the slight increase in open interest has occurred despite a backdrop of mainly range-bound spot prices. Over the past seven days, BTC mainly traded between $109K and $113K, and only broke out to $114K in early Asian trading hours on Sep 11, 2025. Meanwhile, Ether has continued to trade at between $4,200 and $4,500 over the past week, and is up 3% on the month, relative to a 4% decline for BTC.
Macro narratives have been the main driver for spot prices since the start of September, as reflected in derivatives market positioning with daily trade volumes reaching their highest levels so far this month on Friday, Aug 5, 2025. That day, the latest nonfarm payrolls report in the US showed that payrolls had increased by only 22,000 in August, far below expectations of 75,000. Meanwhile, June saw negative job growth, the first time this has occurred since December 2020. BTC initially rallied before falling from $112K to $110K.
BYBIT PERP OPEN INTEREST — Total open interest eked out a small increase this week to $16B, though that remains below August’s highs.
BYBIT PERP TRADING VOLUMES — Last Friday, trade volumes reached their highest levels so far this month after anemic growth in the number of US jobs.
Sentiment stays bullish in funding rates
BTC funding rates continue to maintain a mostly neutral stance, with a slightly bullish tilt and an appetite for higher prices. This is reflected in the fact that funding rates have been positive all week, though they’ve failed to break out past 0.01%, a sign of a more exuberant view for a rally in spot prices. After some early shakiness from traders in the ETH leveraged instrument during the tail end of August and initial part of September, ETH funding rates have also stabilized at neutral-to-positive levels.
Perhaps the more interesting divergence is between options markets and perp markets. The sideways movement in spot prices for BTC and ETH has culminated in declining levels of ATM implied volatility, while volatility smiles still suggest traders are bracing for more downside price action. Since the start of September, short-tenor BTC and ETH skews have failed to increase above 0% (i.e., OTM calls trading more attractive to puts) for any sustained period of time. That contrasts with the positioning in perpetual swaps, as a sideways spot price hasn’t turned traders bearish just yet.
BTC options
Key insights
Bearish positioning continues to dominate BTC options, despite a run of softer-than-expected macro data releases that have pushed the market to price in nearly three rate cuts before year’s end by the Federal Reserve — which typically provide a favorable backdrop for risk-on sentiment. JOLTS data showed job openings fell to 7.18M in July, the lowest level in ten months, while last Friday’s nonfarm payrolls report informed us that June was the first negative month for jobs growth since December 2020.
For most of the week, BTC’s failure to break out of its $109–113K range hints at the tug-of-war that traders are currently facing. A US economy that’s too weak bodes ill for US equities as consumer spending and the labor market slow down, while a more controlled slowdown may boost risk-taking via increased liquidity from interest rate cuts. There is also another tug of war between inflation and employment. On Sep 11, 2025, core CPI came in as expected, though the headline number exceeded expectations on the month. That occurred while an initial jobless claims report showed unemployment filings close to a four-year high (more weakness in the labor market). Volatility smiles for BTC have remained tilted toward OTM puts for most of September — and not just for short-dated options either. The bearish sentiment is across the term structure, and began in mid-August.
BYBIT BTC OPTIONS VOLUMES
BYBIT BTC OPTIONS OPEN INTEREST
BTC volume has drifted lower
BYBIT BTC ATM TERM STRUCTURE — ATM IV has dropped by 6 vol points at the front end of the term structure.
BYBIT BTC SVI ATM IMPLIED VOLATILITY — Over the course of the past week, ATM implied volatility for short-dated options has slowly drifted lower. Meanwhile, 7-day IV has fallen from 37% to 31%.
BYBIT BTC IMPLIED AND REALIZED VOLATILITY — Realized volatility has taken a large step down, from 38% to 30%, over the past three days, while implied volume for mid-dated options (such as 30 days) has traded range-bound at 36%.
ETH options
Key insights
We mentioned that BTC and ETH spot prices have mainly been in a sideways sloth over the past week. Nonetheless, ETH has underperformed relative to BTC. While the latter is up a slight 0.8%, ETH is down 1.0%. The two assets’ spot ETF markets have also diverged in their net flows. As a matter of fact, only yesterday were Spot Ethereum ETFs able to break a six-day outflow streak, driven partly by sizable outflows from BlackRock’s Shares Ethereum Trust ETF.
On Tuesday, Sep 9, 2025, Spot ETH ETFs purchased $44.2M worth of Ether. Bitcoin Spot ETFs, on the other hand, have had a slightly less bearish run. Of the six consecutive ETH outflow days, Bitcoin products net bought BTC on three days, and yesterday the funds purchased $23M of bitcoins, primarily due to a $169.3M inflow from BlackRock.
Unlike BTC options volumes, which saw a jump higher last Friday following the NFP report in the US, ETH options volumes have stayed steady around the $133M mark, while open interest has also remained flat.
BYBIT ETH OPTIONS VOLUMES
BYBIT ETH OPTIONS OPEN INTEREST
ETH volume is drifting lower with BTC volume
BYBIT ETH VOLATILITY TERM STRUCTURE — The term structure is maintaining its positive slope, although ATM IV levels have dropped 3–9% relative to one week ago.
BYBIT ETH SVI ATM IMPLIED VOLATILITY — ETH’s ATM implied volatility has reacted more sensitively to the sideways price action, falling lower over the past week relative to the decline in BTC options IV. Relative to August’s high, 7-day IV is down 15 vol points.
BYBIT ETH IMPLIED AND REALIZED VOLATILITY — As with BTC, delivered volume for ETH has collapsed 40 percentage points, as Ether’s spot price has moved very little over the past seven days.
SOL options
The decline in ATM implied volatility across SOL’s term structure mirrors both a major decline in realized volatility for SOL and the wider drift lower in implied volatility across the three major crypto assets. Solana’s native SOL token has, however, held up far better than BTC and ETH: on the week, it’s rallied more than 11% from a low of $199 to now trading shy of $220, and in the past 30 days, SOL is up 27%.
Part of SOL’s outperformance may be attributed to Monday’s announcement that Nasdaq-listed Forward Industries (FORD), a design and manufacturing company, has raised $1.65B in cash and stablecoin commitments — led by Galaxy Digital, Jump Crypto and Multicoin Capital — to form the largest SOL-focused digital asset treasury company. The company also aims to generate on-chain returns and increase long-term shareholder value through active participation in Solana’s DeFi markets, which could provide a boost to the entire Solana ecosystem.
BYBIT SOLUSDT OPTIONS VOLUMES
BYBIT SOLUSDT OPTIONS OPEN INTEREST
SOL volatility
BYBIT SOL VOLATILITY TERM STRUCTURE — SOL’s term structure is exhibiting a shape similar to that for ETH, with longer-dated options demanding a far higher IV premium over the front end.
BYBIT SOL SVI ATM IMPLIED VOLATILITY — As we’ve seen across all three major cryptos, ATM IV for SOL options has steadily drifted lower over the course of the week, and now stands at 75%.
BYBIT SOL IMPLIED AND REALIZED VOLATILITY — Delivered volatility has dropped 40 percentage points from its late August high, a drop similar in magnitude to ETH realized volatility.
ETH and BTC skews
Key insights
As has been the case since mid-August, we continue to see bearish expectations in BTC and ETH options markets. That skew turned slightly more negative following the CPI print in the US. Volatility smiles for both assets are reflecting a far higher demand for short- and long-term downside protection than for bets on a spot price rally. The notable contrast is in longer-dated optionality: the 90-day put-call skew for ETH is flirting with the 0% mark, without showing a strong willingness to firmly price puts richer than calls. That contrasts with the positioning in BTC longer-maturity options, where (for example) 90-day skew is firmly tilted bearish at −2%.
Nonetheless, for BTC we do see a recovery in skew over a longer time horizon. Back on Aug 25, 2025, 7-day skew was as low as −10%, with BTC’s spot price later falling to $107K.
BYBIT BTCUSDT PUT-CALL SKEW
BYBIT ETHUSDT PUT-CALL SKEW
Volatility by exchange
BTC, 1-MONTH TENOR, SVI CALIBRATION
ETH, 1-MONTH TENOR, SVI CALIBRATION
Bybit volatility surface
Constant maturity smile
Data & methodology
Data acquisition, composition & timeline
Open interest and trading volume data are sourced “as is” from the Bybit exchange platform API exclusively, and as such do not represent a comprehensive picture of the sum of trading activity across all derivatives markets or exchanges. The data visualized in this report consists of hourly and daily snapshots, recorded over the previous 30 days. Daily (hourly) snapshots of trade volume record the total sum of the notional value of trades recorded in the 24H (1 hour) period, beginning with the snapshot timestamp.
If not explicitly labeled as derived from another exchange, the input instrument prices to all derivatives analytics metrics in this report are sourced from the appropriate endpoints of Bybit’s public exchange platform API. In the event that data is labeled or referred to as representing the market on another exchange source, that data is sourced from the appropriate endpoint of each respective exchange’s public API.
Macroeconomic charts and data are sourced “as is” from the Bloomberg Terminal. Exchange data is sourced “as is” from publicly available exchange APIs. Block Scholes makes no claims about the veracity of public third-party data.
Open interest & volume dollar denomination
After acquisition of underlying-denominated raw data for open interest and trading volume on the Bybit exchange platform from Bybit’s API endpoint, equivalent dollar-denominated figures are calculated using the concurrent value of Block Scholes’s Spot Index for the relevant underlying asset.
Block Scholes’s Spot Index represents the aggregate Spot mid-price for a given currency across the top five CEXs by volume (with USD-quoted markets). It considers the proportion of total volume in the instrument on the exchange, as well as the deviation of a data point from those on other exchanges.
Block Scholes–derived analytics metrics
Futures prices are used for Block Scholes’s futures-implied yields calculation services in order to derive the constant-tenor annualized yields displayed in the Futures section of this report.
Options prices are used for Block Scholes’s implied volatility calculation services in order to calibrate volatility surfaces, from which all derivatives volatility analytics displayed in the BTC Options and ETH Options sections of this report are calculated. Volatility smiles are constructed by calibrating to mid-market prices observed in Bybit options markets. As part of the calibration process, prices go through rigorous filtration and cleaning steps, which ensures that the resulting volatility surface is arbitrage-free and has exceptional fit to the market observables.
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Bybit x Block Scholes Crypto Derivatives Analytics Report September 12, 2025
A sideways slog in spot prices over the past week means that the bearishness in options markets positionings for both BTC and ETH continues. Volatility smiles across the term structure for BTC continue to price OTM puts at a premium to call options, while short-dated ETH options are also maintaining their expectations for further downside price action. The main driver of spot prices this week has been macro-induced events, on both sides of the Fed’s dual mandate. An ever so slightly hotter than expected CPI print pushed BTC lower after it tapped $114K, though it quickly recovered. The inflation print came after a slew of data releases pointed to a marked weakening in the US jobs market: including JOLTs data and NFP. Markets are now bracing for three rate cuts by the Federal Reserve by the end of the year.
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Bybit x Block Scholes Crypto Derivatives Analytics Report September 5, 2025
Risk-on sentiment in both US equities and bond markets has vanished over the past week. US equities fell lower after an extended holiday, amidst a global bond market rout that has seen long-dated bond yields across G7 nations soar to record highs. BTC’s spot price has mostly declined after Federal Reserve Chair Jerome Powell’s Jackson Hole speech, reaching a local bottom of $107K earlier last week, while ETH’s spot price is down 5% over the past seven days. Some altcoins have, however, fared stronger, with SOL a particular case in point.
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Bybit x Block Scholes Quarterly Report: What will drive crypto in Q3 2025?
Chair Jerome Powell of the Federal Reserve delivered his highly anticipated Jackson Hole speech on Aug 22, 2025. In it, he caught markets offside with a more-dovish-than-expected signal that the Fed is preparing to cut interest rates as soon as September. The Fed’s shifting policy stance has become apparent in BTC’s reaction function to various macroeconomic data releases — and, in fact, slightly predates the pivot from Powell.
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Block Scholes x Bybit July Volatility Review
BTC’s volatility smile has flattened to cycle lows: Since 2022, BTC’s volatility smile steepness has become shallower, dropping close to its lowest levels in July 2025 — a sign that options markets appear to be assigning a lower probability of extreme BTC moves in either direction relative to moves close to the current spot price.
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Block Scholes x Bybit Crypto Derivatives August 22nd
Cryptocurrency spot prices began their sell-off last Thursday on Aug 14, 2025 following a stronger-than-expected PPI inflation report that showed the largest increase in inflation (at the wholesale level) since June 2022. That sell-off has extended into this week at a slower pace as traders await Fed Chair Jerome Powell’s speech on Friday at the Jackson Hole Economic Policy Symposium, hoping for further clarity on the path of monetary policy in the US.
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Block Scholes x Panoptic: Perpetual Options
What if options never expired? Perpetual options are a new financial primitive that behave like traditional options that are continuously rolled forward. Instead of expiring, they maintain a fixed time-to-expiry horizon, say 30 days, by automatically rolling each day. The key benefit of this structure is efficiency: unlike manual rolling, perpetual options avoid repeated transaction fees and bid-ask spreads, making them significantly cheaper to maintain over time. They exhibit similar exposures to those of a traditional option, while smoothing volatile, market-dependent upfront costs into a continuous funding rate.
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Block Scholes x Bybit Crypto Derivatives August 15th
ETH stole the spotlight this past week, with a rally of over 20% that brought it within inches of its November 2021 (ATH). That’s not to say BTC has traded quietly, however — on Aug 14, 2025 it reached a new all-time high (ATH) of $124K, driving a sentiment shift in options markets toward OTM calls. ETH has been strongly supported by a wave of institutional buying from corporate digital asset treasuries, such as SharpLink Gaming and BitMine Immersion Technologies, Inc. as well as Spot ETH ETFs, which had their first $1B inflow day on Aug 11, 2025. This is significant because derivatives markets signal a strong bullishness for the rally to continue.
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Block Scholes x Bybit Crypto Derivatives August 8th
The month of August has started in a far more bearish manner than the month that came before it. Positioning in derivatives markets suggest that market participants were anticipating a bigger downside move than what has so far materialized and that, despite the pullback in spot prices abating, sentiment has yet to fully recover. The past week has not been short of narratives for crypto traders: President Trump extended his reciprocal tariff program as his self-imposed Aug 1, 2025 deadline was reached, weaker-than-expected US jobs data has reignited uncertainty over the Fed’s monetary policy path and the SEC’s “Project Crypto” provided some bullish news for the advancement of tokenization in the US and Layer 1 blockchains that stand to benefit from the regulatory positivity.
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Bybit x Block Scholes Quarterly Report: Altcoin season and the evolving role of Bitcoin
The previous time we evaluated the potential for a crypto altseason, we defined it as a period of significant and sustained outperformance by altcoins (cryptocurrencies other than Bitcoin). Such market regimes have historically begun when Bitcoin dominance reaches a local peak, leading to evidence of capital rotation from Bitcoin into Ethereum, and subsequently into smaller, riskier altcoin projects. This rotation results in rapid price appreciation across altcoins, with many surpassing their previous cycle highs. Altseason ends when the total market capitalization of all altcoins reaches a new all-time high (ATH), often just prior to the broader market peak.
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Block Scholes x Bybit Crypto Derivatives August 1st
A slowdown in spot prices this week has seen short-tenor BTC and ETH options assign a slight volatility premium to out-of-the-money (OTM) put options, a signal of bearish sentiment. This contrasts with the bullish outlook portrayed in perpetual futures markets, in which funding rates for BTC, ETH and a slew of other tokens have been persistently positive. BTC has traded range-bound between $115K and $120K, reaching that lower bound on Jul 25, 2025 — coinciding with a sale of 80,000 Bitcoins facilitated by Galaxy Digital from a “Satoshi-era investor.” BTC’s spot price quickly recovered from that low, but has since failed to break past $120K.
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Block Scholes x Bybit Crypto Derivatives July 25
The beginning of “Crypto Week” saw a number of positive developments for the crypto industry. As the week began, BTC surged to a new all-time high of $123K. However, as the week’s end approached, the spotlight switched toward altcoins, which rallied significantly to bring the total market cap of crypto assets above $4T for the first time in history. ETH reached its highest levels all year, breaking past $3,800, while SOL, which for the past two weeks had underperformed other L1 blockchains, crossed the $200 threshold. Crypto Week also saw the signing of the GENIUS Act into law by US President Trump, and the passing of the CLARITY Act and the CBDC Anti-Surveillance State Act by the US House.
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Block Scholes x Bybit Crypto Derivatives July 16
An aggressive rally in BTC’s spot price over the past week has seen the largest cryptocurrency by market capitalization surge to multiple new all-time highs, eventually touching a top of $123K. With that move higher, all measures of directional sentiment in derivatives markets supported the rally, as funding rates for BTC have been persistently positive and options skew is tilted toward calls. SOL has once more underperformed relative to a basket of Layer 1 (L1) blockchains this week, despite several bullish tailwind drivers in the form of positive inflows in the REX-Osprey SOL ETF and a number of corporations adopting or expanding a SOL-focused treasury strategy, including DeFi Development Corp. and Mercurity Fintech Holding Inc.
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Block Scholes x Bybit Crypto Derivatives July 10
This week has seen an outperformance in altcoins relative to BTC, with ETH and XRP rallying more than 16% over the past seven days. BTC reached a new all-time high of $118K, extending past its previous high on May 22, 2025. Throughout the week, short-tenor BTC options have traded with a range-bound level of implied volatility, between 26% on July 4, 2025, and 35% following the new all-time high. Despite positive tailwinds for the Solana ecosystem, including another quarter of revenues that have outperformed all other L1 and L2 blockchains, the SOL token has rallied by a smaller 2% for the week.
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Block Scholes x Bybit June Volatility Review
BTC volatility has reached historically low levels against ETH and SOL: In June, BTC implied volatility fell to 28% and 7-day realised vol to 22–25 %, extending a multi-year down-trend despite sizable macro shocks (geopolitical strikes, policy feuds, first US stable-coin law).
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Block Scholes x Bybit Crypto Derivatives July 4
For most of the past seven days, the majority of crypto assets had traded within a tight range, despite a rally in US equities which has seen the benchmark S&P 500 and Nasdaq-100 indices reaching new all-time highs. That changed on Jul 2, 2025 as spot prices broke out of their respective ranges, coinciding with the US reaching a trade deal with another trade partner, Vietnam. BTC broke out of the $105–108K region to trade upward of $110K and ETH cleared its own $2,500 ceiling. The result of the sideways spot price slog and subsequent rally saw implied volatility jump for both BTC and ETH options. For the former, the one-week tenor traded with an implied volatility as low as 26% earlier in the week, before bouncing to 35%. Volatility smiles for BTC however remain mostly unchanged from the rally.
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Block Scholes x Bybit Crypto Derivatives June 27
The past week was packed with enough macro events to make even an asset class as volatile as crypto stand out with more volatility. Over the past seven days alone, the US Senate bilaterally passed the GENIUS Act, a landmark legislation to regulate stablecoins. Later in the week, Fed Chair Jerome Powell reiterated the Fed’s wait-and-see approach as the FOMC left interest rates unchanged. Then, the US militarily intervened in the Middle East and forced a retaliatory response from Iran, before negotiating a peace treaty and ceasefire. Understandably, spot markets plunged and then rallied, and implied volatility has gone through its own series of ups and downs.
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Bybit x Block Scholes Crypto Insights Report: Deep dive into US crypto regulations
Just over 151 days of President Trump’s administration have already delivered significant shifts in the US’s crypto policy: Active promotion of a comprehensive regulatory framework for digital assets includes appointing pro-crypto regulators, ending high-profile lawsuits against crypto companies, clarifying rules around staking and fostering ETF approvals. Stablecoin regulation via the GENIUS Act and the proposed BITCOIN Act indicates major institutional and governmental acceptance: These acts establish frameworks for the safe issuance of stablecoins, and may potentially lead to significant institutional demand for Bitcoin. Stablecoins could dramatically scale in adoption. More speculative bills, such as the BITCOIN Act, could position the US government among the largest holders of Bitcoin globally.
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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.
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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.
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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).
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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“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.
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"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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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PREMIUM
Institutional
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.
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PREMIUM
Institutional
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.