Brent Crude Jumped Back Above $111 After a Houthi Drone Attack on Saudi Arabia's Shaybah Oilfield

In Today's Note

• Brent crude is trading 2.6% higher at $111.64 after a Houthi drone attack on Saudi Arabia's Shaybah oilfield, while France's 10-year yield closed above 5% for the first time in more than 24 years.
• The OCC became the first agency to finalise rules implementing the GENIUS Act, prohibiting issuers from paying interest directly but removing proposed restrictions on third-party stablecoin rewards.

Market Snapshot: Overnight Moves

Macro & Markets

• US tech shares led equities higher on Wednesday, with the Nasdaq Composite rising 1.05% and the S&P 500 gaining 0.58%, while the Philadelphia Semiconductor sector index climbed 1.97% as the chip sector extended its rebound from last week's rout.
• That optimism faded after the close, as the first big-tech earnings of the season failed to calm nerves over AI spending. Tesla fell 3.3% after-hours despite beating earnings estimates, as operating income fell 56% year-on-year, while Lam Research dropped more than 7% on a weak outlook.
• Meta rose close to 3% after-hours after beating revenue estimates with $64.6B (+26% y/y), though it narrowed its 2026 capex guidance to $135-145B, from $130-145B previously.
• Asian chipmakers sold-off overnight, with SK Hynix down around 6%, Tokyo Electron down 5.9% and the Hang Seng falling 2.7%. Nasdaq-100 futures are trading 1.1% lower this morning, and S&P 500 futures are down 0.5%.

• BTC broke above the top of its two-week $80K-$84K range at the US open on Wednesday, triggering around $188M of short liquidations and peaking at $84.8K at 22:00 UTC. It has since given back the entire move, falling 3.6% to $81.8K as US equity futures and Asian chip stocks sold off.
• The breakout was supported by another day of strong ETF demand. US spot Bitcoin ETFs took in $528.4M on Wednesday, bringing inflows over the past three days to around $1.08B.
• ETH followed a similar path, rising to $2,513 before falling 4.3% to $2,406 this morning. US spot Ether ETFs recorded a net inflow of $15.0M on Wednesday, ending a five-day outflow streak.

• BTC's options market has barely reacted to the $3K reversal. 7-day at-the-money implied vol has risen only modestly, from 30.5% at 20:00 UTC yesterday to 32.3% this morning, while 30-day vol remains flat at around 35.7%.
• Demand for downside protection remains muted. BTC's 7-day 25-delta risk reversal sits at -1.2 vol points, close to neutral and well below the -4.6 put premium seen on Oct. 18, as traders have not rushed for puts despite spot falling back into its range.
• ETH's options market has shown more concern. Its 7-day 25-delta put premium widened from 1.2 to 3.2 vol points in the past hour as ETH fell below $2,410, while 7-day ATM vol trades at 44.7%.

• Oil prices jumped overnight after a Houthi drone attack on Saudi Arabia's Shaybah oilfield and reports of further attacks on vessels in the Gulf. Brent crude is trading 2.6% higher at $111.64 this morning, back above Tuesday's five-month high, with WTI up 2.3% at $99.39.
• US crude inventories fell by 3.06M barrels last week, more than the 0.82M draw expected.
• President Trump dismissed reports of mediation with Iran on Wednesday, telling reporters that "We are not negotiating with them. We are gonna have something one way or the other, it'll happen fairly soon."

• Gold has fallen 1.3% to around $4,090 this morning, with silver down 3% to $56.20 and copper down 1.5%.
• US Treasury yields ended Wednesday little changed, with the 10-year around 5.12%, before falling to 5.08% this morning as equity futures slid.
• Pressure on European government bonds intensified, with France's 10-year yield closing above 5% for the first time in more than 24 years, at 5.013%, and its spread over German Bunds widening to the widest since 2012.
• Fed policymakers remain in their blackout period ahead of next week's Oct. 27-28 meeting. A Reuters poll showed 94 of 100 economists expect the Fed to hold rates next week, while all 100 expect a hike in December.

DeFi / Web3 / Altcoins / Crypto

• The Office of the Comptroller of the Currency (OCC), a US banking regulator, has become the first agency to finalize rules implementing the GENIUS Act, establishing stablecoin issuance, reserve, redemption and custody requirements effective January 18, 2027.
• The final rule prohibits stablecoin issuers from paying interest directly but removes proposed restrictions on third-party rewards arrangements, leaving platforms such as Coinbase able to offer yields subject to case-by-case regulatory review.
• The American Bankers Association criticized the decision, warning that allowing crypto platforms such as Coinbase to offer stablecoin yields could divert deposits away from banks and reduce lending.
• The Blockchain Association welcomed the change as consistent with the law, while investment bank TD Cowen warned that case-by-case enforcement leaves uncertainty over which stablecoin rewards arrangements are permitted.

• Utah has filed a lawsuit against Kalshi, a prediction market platform, and two Susquehanna trading firms, alleging they operate an illegal gambling business through event-based betting contracts.
• The two firms, Susquehanna International Group and Susquehanna Government Products, allegedly acted as market makers on Kalshi, taking the opposite side of customer bets and profiting from losing positions.
• Utah estimates Kalshi collected between $30.6M and $61.2M in fees from local users and is seeking to block sports, election and other betting markets while recovering allegedly unlawful proceeds.

• Solana has activated Anza's Alpenglow consensus upgrade on mainnet, reducing transaction finality from approximately 12.8 seconds to 150 milliseconds by replacing its original TowerBFT protocol.
• The upgrade streamlines transaction confirmation into a single step, while Solana developer Anza is also working on Rotor to improve block propagation and Quantumglow to introduce post-quantum cryptographic security.

• Dogecoin Labs, a new company backed by the Dogecoin Foundation, has launched under CEO Jordan Jefferson, bringing together the MyDoge wallet, DogeOS blockchain application platform and Such App payments service.
• The company aims to expand DOGE's use in payments, commerce, decentralized finance and gaming, building on MyDoge's reported 500,000-plus users and DogeOS's EVM-compatible testnet.
• The initiative comes as Dogecoin seeks demand beyond meme-driven trading, following weak investor interest that prompted Bitwise to announce the closure of its Dogecoin ETF.

• Standard Chartered, a UK-headquartered multinational banking group, has signed definitive agreements to acquire 100% of digital asset custodian Zodia Custody, including its regulated operations in Singapore, Hong Kong, Australia, the UAE and Luxembourg, subject to regulatory approval.
• Zodia's custody operations will be integrated into Standard Chartered's Securities Services division, while its software and professional services business will become a separate company, Zodia Solutions, under the bank's venture arm, SC Ventures.

• The SEC has received more than 100 comments on its proposed Regulation Crypto Assets, which would exempt certain crypto offerings from securities registration, including startup raises of up to $5M and fundraising of up to $75M over one year.
• The Hyperliquid Policy Center, a crypto policy advocacy group, supports the proposal but wants clearer exemptions for free token airdrops, while the Alternative Investment Management Association called for stronger disclosures of investor rights and risks.
• Wall Street trade group SIFMA also urged tighter investor protections under the SEC's separate five-year innovation exemption, which allows certain tokenized stock trading venues and liquidity providers to operate outside standard exchange and dealer registration requirements.

This Week's Calendar

Charts of the Day

Figure 1. Block Scholes BTC Risk-Appetite Index (white, left-hand axis) and BTC spot price (orange, right-hand axis).

Figure 2. Block Scholes ETH Risk-Appetite Index (white, left-hand axis) and ETH spot price (purple, right-hand axis).

Figure 3. BTC at-the-money implied volatility across selected tenors. Source: Deribit, Block Scholes.

Figure 4. ETH at-the-money implied volatility across selected tenors. Source: Deribit, Block Scholes.

Figure 5. BTC 25-delta put-call skew ratio across selected tenors. Source: Deribit, Block Scholes.

Figure 6. ETH 25-delta put-call skew ratio across selected tenors. Source: Deribit, Block Scholes.

Block Scholes is an FCA-regulated institutional crypto derivatives analytics platform. Live data, IV surfaces, and backtesting available via blockscholes.com.

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