ATH Again

In case you missed it! Our recap of last week’s reports:

• DeFi Analytics 8th August 2025
• Bybit x Block Scholes Quarterly Report: Altcoin season and the evolving role of Bitcoin
• Block Scholes x Bybit Crypto Derivatives

Daily Updates:

• Bitcoin rallied to an all-time high of $124K earlier today, before paring back some of those gains to trade at $121K. 
• Back in February, in our Bybit x Block Scholes: The Altcoin Rotation report, we wrote: 

“This also demonstrates the dynamic we introduced in the previous section: contrary to what is often thought, Bitcoin doesn’t need to top out completely before altseason begins, and generally has enjoyed an appreciation in its absolute price alongside the altcoins’ rally.”

• While a full altcoin season has yet to come, Ether (the token that has historically been the first beneficiary of an altcoin rally) continues to surge. Earlier today it touched $4,785 — bringing it ever closer to its November all-time high of $4,891. 
• Altcoins in general have been rallying recently – SOL is up 21% over the past week, ADA is up 34%, while SUI has increased 14%. These moves in large-cap or ‘blue-chip’ altcoins matched with a declining BTC dominance (has fallen from 61% to 56% over the past month) has been a historical setup for the altcoin rotation of past cycles. 

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• The rally in ETH continues to be backed by Spot ETFs, which had another huge day of inflows yesterday. Collectively, they bought $729.1M of Ether. 
• In fact, looking at inflows between BTC and ETH yesterday and on Tuesday, Spot ETFs have bought 7-8x as much as ETH as they have BTC. 

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• The funding rate on perpetual swap contracts for BTC and ETH shot up over the past 24 hours, with long traders paying a premium to short traders in anticipation of a continuation in the rally of both assets. ETH funding rates rose to 0.04%, while BTC funding rates are at 0.03%. 
• Interestingly however, the move to a new all-time high for BTC was not matched with a significant upwards move in put-call skew. 7-day volatility smiles for BTC show only a slight 0.5% premium to OTM call options, while 14- and 30-day smiles continue to be skewed towards puts. 
• For ETH, volatility smiles across the term structure remain bullish, though the premium to out-of-the-money call options compared to OTM puts has dropped from 5% to 2.7% over the past 24 hours. 

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• Bitcoin’s record high also follows recent record highs set by US equities. The S&P 500 rallied 0.3% yesterday and the Russell 2000 — an index of smaller cap US firms — jumped 2%. The bid on risk-on assets across the board coincides with continued bets from traders that the Fed will cut interest rates in their next meeting in September. Market-implied odds for a 75bps of cuts, by December 2025 is at 54.8%, up from 26.4% just one month ago.

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• Indeed Treasury Secretary Scott Bessent is piling on the pressure for some jumbo-sized rate cuts. On Bloomberg TV, he made his most explicit call yet for the Federal Reserve to execute a more aggressive cycle of rate cuts — “I think we could go into a series of rate cuts here, starting with a 50 basis-point rate cut in September”. 
• Bessent added "If you look at any model” it suggests that “we should probably be 150, 175 basis points lower.”
• That follows comments earlier in the week where Bessent told Fox Business that had the Fed seen the original jobs report numbers prior to the major revisions, “I suspect we could have had rate cuts in June and July.”
• During an event in Washington yesterday, President Trump said that he believes interest rates “should be three or four points lower”. 

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• Coinbase has partnered with crypto payments provider Mercuryo to reduce on-ramp fees for USD Coin (USDC) users accessing the network via MetaMask. The initiative applies to both new and existing users moving funds onto Base, Coinbase’s Ethereum Layer 2 network, with Mercuryo estimating costs could fall by around 50%.
• The announcement comes shortly after Circle, USDC’s issuer, revealed plans to build a stablecoin-native Layer 1 blockchain where USDC will serve as the gas token. 

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• Tron founder Justin Sun has filed a lawsuit in US District Court, Delaware, to block Bloomberg from revealing detailed crypto holdings.
• Sun claims Bloomberg promised confidentiality for inclusion in its Billionaires Index but later drafted a profile exposing asset data.

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• Terraform Labs co-founder Do Kwon has pleaded guilty in New York courts to conspiracy to defraud and wire fraud over the $40B TerraUSD and Luna collapse.
• This change of plea comes after he initially pleaded not guilty in January 2025. Do Kwon will be sentenced on Dec 11, 2025 and faces up to 25 years in prison for misleading crypto investors.

This Week’s Calendar:

Charts of the Day:

Figure 1. BTC at-the-money implied volatility across selected tenors. Source: Deribit, Block Scholes

Figure 2. ETH at-the-money implied volatility across selected tenors. Source: Deribit, Block Scholes

Figure 3. BTC 25-delta put-call skew ratio across selected tenors. Source: Deribit, Block Scholes

Figure 4. ETH 25-delta put-call skew ratio across selected tenors. Source: Deribit, Block Scholes