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Last Updated:  
June 17, 2025
2 min read

Deescalation Hopes

Risk-on sentiment returned briefly as Iran reportedly signalled an openness to deescalate tensions, though that sentiment shifted once more in US equities as President Trump called for evacuations in Tehran. BTC dropped from near $109K to $106.7K, and ETH fell to $2.5K (-1.7%). ETH short-tenor implied volatility is currently nearly twice as high as similar-dated BTC options, while the ETH/ BTC 7-day realised volatility ratio is greater than 2. The Senate is set to vote today on the GENIUS Act and Trump Media has applied for a BTC-ETH ETF (75/25) while CoinShares has filed for a SOL ETF.

Daily Updates:

  • Signs of a risk-on environment were back on display yesterday across global markets as US equities climbed higher and gold prices fell to $3,380 / oz. The S&P 500 ended the day up 0.94%, while the tech-heavy Nasdaq-100 closed at +1.42%. 
  • That change in sentiment occurred as news reports circulated that Tehran planned to restart talks over its nuclear program and signalled intentions to de-escalate what is now the fifth day of conflict between Israel and Iran, as long as the US would not join in on the attack militarily.
  • That risk-on sentiment in US equities has changed once more as a few hours after the deescalation reports, President Trump posted on his Truth Social platform: “Iran should have signed the ‘deal’ I told them to sign… Everyone should immediately evacuate Tehran!” – a major contrast to the earlier optimism that tensions might not escalate any further. SPX futures dropped half a percent following that message from Trump. 
  • The FOMC’s fourth meeting of the year is expected to deliver a fourth consecutive pause in their rate cutting cycle.
  • However, attention will be on guidance for the four remaining meetings in 2025 after the headline CPI rate ticked up to 2.4% from 2.3%.
  • Futures-implied market expectations now put December’s rate at 3.9%, implying just under two 50 bps cuts before year end, with the first not expected until the anniversary of the start of the Fed’s cutting cycle in September.
  • BTC initially plunged in an almost vertical manner from close to $109K down to $106K as President Trump told Iranian citizens in the capital to evacuate, and now currently trades at $106.7K. ETH saw a similar fall from $2.7K down to $2.5K and is down more than 1.7% over the past 24 hours. 
  • ETH’s term structure of volatility has risen slightly compared to yesterday, as short-tenor options trade with a volatility premium of 73% and 90-day options have an implied volatility of 68%. 
  • That contrasts BTC’s term structure where volatility levels have abated slightly over the past 24 hours and 7-day BTC options trade with an IV of 37% – almost half the implied volatility of similar-dated ETH options.
  • We covered in our Bybit Volatility report for May that the peak in the ratio of ETH 7-day realised volatility to BTC 7-day realised volatility last month might have been a driver for the similar surge in the at-the-money implied volatility ratio between the two – currently, ETH 7-day realised volatility is upwards of 70%, relative to the 30% realised volatility in BTC spot price over the past 7 days. 
  • Funding rates for ETH are currently close to neutral, having been negative for most of the past week; however for BTC perpetual futures, the funding rate is currently slightly positive at 0.002% on an 8-hourly basis, meaning longs are paying funding to short traders. 
  • Today the Bank of Japan held its benchmark policy rate at 0.5%, as widely expected, though also unveiled a plan to decelerate the pace of its balance sheet drawdown from next year.
  • The central bank did not adjust its existing bond tapering plan which has it reducing government bond purchases by ¥400B ($2.76B) per quarter, but instead will halve the quarterly reduction amount from the fiscal year 2026 to ¥200B, such that monthly purchases fall to around 2T yen by March 2027. 
  • Cathie Wood’s Ark Invest has offloaded $51.7M worth of Circle shares, a fraction of their initial investment of an estimated $373M for 4.5M IPO shares. This comes as Circles stock hit an all-time high above $150.
  • The US Senate is set to vote on final passage of the GENIUS stablecoin bill today. 
  • This will be the last step before the legislation advances to the House for review and potential enactment. Although the bill is expected to clear the Senate, it could encounter additional challenges in the House, where legislators might push for more comprehensive cryptocurrency regulations.
  • JPMorgan Chase has submitted a U.S. trademark application for "JPMD," with the application citing a range of blockchain and digital asset services including “Providing trading, exchange, transfer, and payment services for digital assets”.
  • This signals an expansion of their digital services offering and has even boosted speculation that they may launch a stablecoin, with the “D” in “JPMD” possibly standing for “Dollar” rather than "Digital" and also given the timing in line with the GENIUS act.
  • Trump Media & Technology Group, the parent of Truth Social, has submitted a Form S-1 registration with the SEC to launch an ETF that directly holds both Bitcoin and Ethereum, allocating 75% to BTC and 25% to ETH.
  • Meanwhile, CoinShares has filed an S-1 registration with the SEC for a Solana (SOL) ETF.

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
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Daily Updates:

  • Signs of a risk-on environment were back on display yesterday across global markets as US equities climbed higher and gold prices fell to $3,380 / oz. The S&P 500 ended the day up 0.94%, while the tech-heavy Nasdaq-100 closed at +1.42%. 
  • That change in sentiment occurred as news reports circulated that Tehran planned to restart talks over its nuclear program and signalled intentions to de-escalate what is now the fifth day of conflict between Israel and Iran, as long as the US would not join in on the attack militarily.
  • That risk-on sentiment in US equities has changed once more as a few hours after the deescalation reports, President Trump posted on his Truth Social platform: “Iran should have signed the ‘deal’ I told them to sign… Everyone should immediately evacuate Tehran!” – a major contrast to the earlier optimism that tensions might not escalate any further. SPX futures dropped half a percent following that message from Trump. 
  • The FOMC’s fourth meeting of the year is expected to deliver a fourth consecutive pause in their rate cutting cycle.
  • However, attention will be on guidance for the four remaining meetings in 2025 after the headline CPI rate ticked up to 2.4% from 2.3%.
  • Futures-implied market expectations now put December’s rate at 3.9%, implying just under two 50 bps cuts before year end, with the first not expected until the anniversary of the start of the Fed’s cutting cycle in September.
  • BTC initially plunged in an almost vertical manner from close to $109K down to $106K as President Trump told Iranian citizens in the capital to evacuate, and now currently trades at $106.7K. ETH saw a similar fall from $2.7K down to $2.5K and is down more than 1.7% over the past 24 hours. 
  • ETH’s term structure of volatility has risen slightly compared to yesterday, as short-tenor options trade with a volatility premium of 73% and 90-day options have an implied volatility of 68%. 
  • That contrasts BTC’s term structure where volatility levels have abated slightly over the past 24 hours and 7-day BTC options trade with an IV of 37% – almost half the implied volatility of similar-dated ETH options.
  • We covered in our Bybit Volatility report for May that the peak in the ratio of ETH 7-day realised volatility to BTC 7-day realised volatility last month might have been a driver for the similar surge in the at-the-money implied volatility ratio between the two – currently, ETH 7-day realised volatility is upwards of 70%, relative to the 30% realised volatility in BTC spot price over the past 7 days. 
  • Funding rates for ETH are currently close to neutral, having been negative for most of the past week; however for BTC perpetual futures, the funding rate is currently slightly positive at 0.002% on an 8-hourly basis, meaning longs are paying funding to short traders. 
  • Today the Bank of Japan held its benchmark policy rate at 0.5%, as widely expected, though also unveiled a plan to decelerate the pace of its balance sheet drawdown from next year.
  • The central bank did not adjust its existing bond tapering plan which has it reducing government bond purchases by ¥400B ($2.76B) per quarter, but instead will halve the quarterly reduction amount from the fiscal year 2026 to ¥200B, such that monthly purchases fall to around 2T yen by March 2027. 
  • Cathie Wood’s Ark Invest has offloaded $51.7M worth of Circle shares, a fraction of their initial investment of an estimated $373M for 4.5M IPO shares. This comes as Circles stock hit an all-time high above $150.
  • The US Senate is set to vote on final passage of the GENIUS stablecoin bill today. 
  • This will be the last step before the legislation advances to the House for review and potential enactment. Although the bill is expected to clear the Senate, it could encounter additional challenges in the House, where legislators might push for more comprehensive cryptocurrency regulations.
  • JPMorgan Chase has submitted a U.S. trademark application for "JPMD," with the application citing a range of blockchain and digital asset services including “Providing trading, exchange, transfer, and payment services for digital assets”.
  • This signals an expansion of their digital services offering and has even boosted speculation that they may launch a stablecoin, with the “D” in “JPMD” possibly standing for “Dollar” rather than "Digital" and also given the timing in line with the GENIUS act.
  • Trump Media & Technology Group, the parent of Truth Social, has submitted a Form S-1 registration with the SEC to launch an ETF that directly holds both Bitcoin and Ethereum, allocating 75% to BTC and 25% to ETH.
  • Meanwhile, CoinShares has filed an S-1 registration with the SEC for a Solana (SOL) ETF.

Daily Updates:

  • Signs of a risk-on environment were back on display yesterday across global markets as US equities climbed higher and gold prices fell to $3,380 / oz. The S&P 500 ended the day up 0.94%, while the tech-heavy Nasdaq-100 closed at +1.42%. 
  • That change in sentiment occurred as news reports circulated that Tehran planned to restart talks over its nuclear program and signalled intentions to de-escalate what is now the fifth day of conflict between Israel and Iran, as long as the US would not join in on the attack militarily.
  • That risk-on sentiment in US equities has changed once more as a few hours after the deescalation reports, President Trump posted on his Truth Social platform: “Iran should have signed the ‘deal’ I told them to sign… Everyone should immediately evacuate Tehran!” – a major contrast to the earlier optimism that tensions might not escalate any further. SPX futures dropped half a percent following that message from Trump. 
  • The FOMC’s fourth meeting of the year is expected to deliver a fourth consecutive pause in their rate cutting cycle.
  • However, attention will be on guidance for the four remaining meetings in 2025 after the headline CPI rate ticked up to 2.4% from 2.3%.
  • Futures-implied market expectations now put December’s rate at 3.9%, implying just under two 50 bps cuts before year end, with the first not expected until the anniversary of the start of the Fed’s cutting cycle in September.
  • BTC initially plunged in an almost vertical manner from close to $109K down to $106K as President Trump told Iranian citizens in the capital to evacuate, and now currently trades at $106.7K. ETH saw a similar fall from $2.7K down to $2.5K and is down more than 1.7% over the past 24 hours. 
  • ETH’s term structure of volatility has risen slightly compared to yesterday, as short-tenor options trade with a volatility premium of 73% and 90-day options have an implied volatility of 68%. 
  • That contrasts BTC’s term structure where volatility levels have abated slightly over the past 24 hours and 7-day BTC options trade with an IV of 37% – almost half the implied volatility of similar-dated ETH options.
  • We covered in our Bybit Volatility report for May that the peak in the ratio of ETH 7-day realised volatility to BTC 7-day realised volatility last month might have been a driver for the similar surge in the at-the-money implied volatility ratio between the two – currently, ETH 7-day realised volatility is upwards of 70%, relative to the 30% realised volatility in BTC spot price over the past 7 days. 
  • Funding rates for ETH are currently close to neutral, having been negative for most of the past week; however for BTC perpetual futures, the funding rate is currently slightly positive at 0.002% on an 8-hourly basis, meaning longs are paying funding to short traders. 
  • Today the Bank of Japan held its benchmark policy rate at 0.5%, as widely expected, though also unveiled a plan to decelerate the pace of its balance sheet drawdown from next year.
  • The central bank did not adjust its existing bond tapering plan which has it reducing government bond purchases by ¥400B ($2.76B) per quarter, but instead will halve the quarterly reduction amount from the fiscal year 2026 to ¥200B, such that monthly purchases fall to around 2T yen by March 2027. 
  • Cathie Wood’s Ark Invest has offloaded $51.7M worth of Circle shares, a fraction of their initial investment of an estimated $373M for 4.5M IPO shares. This comes as Circles stock hit an all-time high above $150.
  • The US Senate is set to vote on final passage of the GENIUS stablecoin bill today. 
  • This will be the last step before the legislation advances to the House for review and potential enactment. Although the bill is expected to clear the Senate, it could encounter additional challenges in the House, where legislators might push for more comprehensive cryptocurrency regulations.
  • JPMorgan Chase has submitted a U.S. trademark application for "JPMD," with the application citing a range of blockchain and digital asset services including “Providing trading, exchange, transfer, and payment services for digital assets”.
  • This signals an expansion of their digital services offering and has even boosted speculation that they may launch a stablecoin, with the “D” in “JPMD” possibly standing for “Dollar” rather than "Digital" and also given the timing in line with the GENIUS act.
  • Trump Media & Technology Group, the parent of Truth Social, has submitted a Form S-1 registration with the SEC to launch an ETF that directly holds both Bitcoin and Ethereum, allocating 75% to BTC and 25% to ETH.
  • Meanwhile, CoinShares has filed an S-1 registration with the SEC for a Solana (SOL) ETF.