A Temporary Bounce

Find out our latest reports, listed below:

• How did options markets react to the crypto selloff?

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• Metaplanet Is Selling Vol, Who Is Next?

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• Bybit x Block Scholes August Volatility Review

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• Bybit x Block Scholes Quarterly Report: What will drive crypto in Q3 2025?

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Market Snapshot: Overnight Moves:

Daily Updates:

• The bounce in crypto spot prices yesterday proved to be a temporary one, as from 11PM UTC, BTC and the rest of the market began to sell off. 
• That sell off has seen BTC once more test the $111K level, falling from $115K, while ETH now trades below $4,000, falling from $4,200 late yesterday night. 

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• The plunge lower in crypto prices occurs amidst the backdrop of the renewed tit-for-tat trade war between the US and China. 
• The Chinese Ministry of Commerce announced yesterday that it had imposed curbs on the American units of Hanwha Ocean Co., one of South Korea’s biggest shipbuilders, in a bid to hit back at US measures against the Chinese shipping sector.

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• After a brief disinversion yesterday, the term structure of ATM volatility for ETH has once more inverted. 
• Despite short-dated tenors outperforming longer-dated contracts over the past 24 hours, ATM vol has nonetheless increased uniformly across the term structure. One-week contracts currently trade with an IV of 77%. 
• The increased volatility is a reflection of a renewed demand for downside protection — since 12AM UTC, the put-call skew ratio on contracts with a maturity in less than 30 days tilted from neutral-to-modestly positive levels towards a 6% vol premium for put options. 
• Volatility smiles at short-dated tenors for BTC have also turned more bearish. Over the past 24 hours, the smile on 1-week options has shifted an additional 3.6 vol points towards OTM puts, with the put-call skew ratio now at -4.8%. 

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• Wall Street did not react to the initial weekend drama in the same manner as crypto. In yesterday’s trading session, the S&P 500 surged from the open, and closed 1.56% higher. 

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• Nonetheless, the US administration has given mixed signals: on Sunday JD Vance said that “It’s going to be a delicate dance, and a lot of it is going to depend on how the Chinese respond.”
• Yesterday however, Treasury Secretary Scott Bessent said on Fox Business that Trump “will be meeting with party chair Xi in Korea, I believe that meeting will still be on”. 
• He warned that “we will not let these export restrictions and monitoring go on. And I believe that China is open to discussion on this.”
• When asked what the US might do to leverage China into a deal, Bessent said “we’re willing to do whatever it takes and to adopt whatever posture it takes” but is "optimistic that this can be de-escalated”. 

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• According to a statement from China’s Ministry of Commerce today, “China's position is consistent. If there's a fight, we'll fight to the end; if there's a talk, the door is open.”
• The statement also said that the US and China “have maintained communication within the framework of the China-US Economic and Trade Consultation Mechanism, and even held working-level talks yesterday.” 

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• Bhutan has announced the transition of its blockchain based National Digital Identity system from Polygon to Ethereum with the goal of “further strengthening the security of our digital identity.” according to Jigme Tenzing, the Secretary of the GovTech Agency.
• The roll out is expected to be completed by early 2026, with support from The Ethereum Foundation, led by President Aya Miyaguchi, who announced it will help Bhutanese developers take ownership of Ethereum initiatives in the country and source local talent.

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• Prediction market platform Kalshi has teamed up with oracle provider Pyth Network to bring its market data on-chain. 
• This collaboration allows developers to build smart contracts, derivatives such as perpetuals and other financial products using Kalshi’s market data which spans across elections, central bank decisions, sports and more.

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• CME has expanded its CFTC-regulated Crypto options to include Solana (SOL) and XRP, which went live yesterday. The exchange now offers monthly and weekly option expirations for SOL, Micro SOL, XRP, and Micro XRP, adding to its existing lineup of Bitcoin, Micro Bitcoin, Ether, and Micro Ether options.
• However, first day uptake remains limited with a total of 5 contracts executed yesterday on each of the SOL and XRP option markets. 

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This Week’s Calendar:

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Charts of the Day:

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