Another Bout of De-risking

Another Bout of De-risking

Find out our latest reports, listed below:

• DeepBook - “The Backbone of Sui DeFi Liquidity”

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• Premia x Block Scholes: Introducing Kyan

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

• How did options markets react to the crypto selloff?

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Market Snapshot: Overnight Moves

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Daily Updates:

• In a previous edition of our daily market commentary, we highlighted a spike in Japanese government bond yields to multi-decade highs coinciding with a broader macro de-risking and spike in crypto options market volatility. 
• The month of December has begun with very similar market moves to what we described in that commentary. 
• In early Asian trading hours today, BTC fell to a low of $85K and is down 5% over the past 24 hours. That occurred alongside a 6% drop in Ether’s spot price which fell to $2,800, while other majors including XRP and SOL are down close to 7%. 
• The selloff in crypto asset prices which began following the $19B leverage unwind of October 10 appeared to have subsided last week as BTC recovered above $90K in thin-Thanksgiving trading — however today’s early market moves once more highlight the fragility of that recovery.  
• Today’s selloff has inspired a steepening in the term structure of ATM BTC volatility, which had sharply declined last week from its November highs. 7D vol has jumped 5 vol points to 49%, flattening the term structure. While not as high as the 70% levels seen in November, that’s a nearly 10 point increase over the weekend. 
• ETH ATM vols also jumped by a similar amount, with ETH’s vol term structure now also compressed at 71% across all tenors. 
• Last week’s recovery to $90K was accompanied by options markets showing tentative signs of a recovery in sentiment — BTC’s vol smiles priced in an equal demand for puts and calls at similar moneyness, expressed by a neutral put-call skew ratio. That has since been priced out and markets are now once more bearishly positioned, with the 25-delta put-call skew ratio indicating an 8 vol point premium for OTM put options relative to calls. 

• US stock futures have accompanied the plunge in crypto also, with contracts on the S&P 500 falling 0.5% while futures on the Nasdaq-100 dropped more than 0.6%. 

• There are a number of potential reasons behind the risk aversion in crypto and US equity prices. Firstly, the two-year yield on Japanese government notes is now trading above 1% – its highest level since 2008 – while the yen has rallied against the US dollar amid signs that the Bank of Japan (BoJ) is considering an interest-rate hike. 
• Across the curve, JGB yields have moved higher, with the five-year and benchmark 10-year yield climbing 4bps to 1.35% and 1.845% respectively. 
• Bank of Japan Governor Kazuo Ueda made his clearest indication that the central bank may consider hiking interest rates in their December meeting — in a speech earlier today he said the bank “will consider the pros and cons of raising the policy interest rate and make decisions as appropriate.”
• According to Bloomberg, traders now see a 76% chance of a rate hike in the Dec 19 meeting, up from 30% only two weeks ago, while pricing in a higher 90% chance for at least one cut before the end of January next year. 

• More specific to crypto markets, another headwind dragging on crypto prices was a comment from Strategy Inc.’s CEO Phong Le, who said on Friday that the firm could sell its BTC holdings if its mNAV ratio turned negative. 
• On a podcast last week, Le said “We can sell Bitcoin and we would sell Bitcoin if we needed to fund our dividend payments below 1x mNAV”. Currently, Strategy is the largest DAT holder of BTC, amassing a $56B war-chest of the asset, with a current mNav of 1.19.
• Le caveated his comments by adding that the selling of BTC would be a last resort and not a policy shift — "I don't want to be a company that sells bitcoin”. 
• Additionally, U.S. spot bitcoin ETFs saw roughly $3.5B in net outflows in November, the largest monthly pullback since February.

• Another source of uncertainty was a weekend message from the People’s Bank of China, reaffirming the central bank’s view on digital assets, particularly stablecoins. 
• The PBOC held a meeting with a group of top regulatory and law enforcement agencies  in the country, such as the Ministry of Justice and the China Securities Regulatory Commission, on how to regulate virtual currencies further while promising to quash any illicit activities related to stablecoins. 
• According to a statement released by the central bank on Saturday, “Business activities related to virtual currencies constitute illegal financial activities”. 
• Additionally, “Stablecoins are a form of virtual currency, and currently cannot effectively meet requirements for customer identification and anti-money-laundering”. 
• The statement also emphasised that "Virtual currencies do not hold the same legal status as fiat currency and cannot be used as legal tender in the market”. 

• CoinShares has scrapped plans for three U.S. spot ETFs in XRP, Solana (with staking) and Litecoin, and will also close its leveraged bitcoin futures ETF, as it pivots strategy ahead of a planned $1.2B SPAC merger with Nasdaq-listed Vine Hill Capital. 

• The first US spot Chainlink ETF could launch this week by Grayscale according to ETF Institute’s Nate Geraci and Bloomberg’s Eric Balchunas. Grayscale filed on 8 Sep, 2025 to transform its Chainlink Trust into a Chainlink Trust ETF, seeking a listing on NYSE Arca under the ticker GLNK.

• Sony Bank is preparing to launch a U.S. dollar-pegged stablecoin as early as fiscal 2026 via a new U.S. subsidiary, using Bastion as its infrastructure partner. The token is aimed at U.S. users paying for Sony games, anime and subscriptions, offering an alternative to card rails and their fees.
• The strategy builds on Sony’s Soneium Ethereum Layer 2 and aligns with Japan’s broader push to grow both dollar- and yen-denominated stablecoin markets.

• Ethereum’s next major upgrade, Fusaka, is set for Dec 3, 2025. 
• It lowers the per-transaction gas cap to 2²⁴ (~16.78M gas) to promote fairer gas distribution across transactions within a block and to reduce the risk of a Denial-of-Service attack, where an attacker could slow or disrupt the network by having a single transaction consume most or all of the block’s gas.
• Fusaka also headlines PeerDAS (EIP-7594), enabling up to 8× more data throughput via data sampling. Instead of each full node having to store all of the blob data, blobs are uniformly randomly distributed across nodes in the network with each holding only 1/8th of the data, therefore enabling theoretical scale up to 8x. This means rollups benefit from cheaper blob fees, more data capacity, and lower user costs. 

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This Week’s Calendar:

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Charts of the Day:

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