Crypto markets remain stable despite continued geopolitical uncertainty as the US indicates it may militarily intervene in the Middle East within the next two weeks. Volatility continues to decline — ETH 7-day at-the-money implied volatility has dropped to 63% while IV for 7-day BTC options has fallen to 33%. Despite ETH's recent term structure inversion now resolved, ETH still maintains a volatility premium over BTC. Skew remains slightly put-tilted for short tenors, while longer-dated ETH options show a stronger call skew than BTC. The Bank of England held rates at 4.25% with a more divided vote than expected, while the Swiss National Bank cut rates to 0%. Arizona has revived a Bitcoin reserve bill which was initially rejected in the House and Kraken has added BTC staking to their offering via Babylon.

The Federal Reserve kept interest rates unchanged at 4.25%-4.5%, with most officials expecting two rate cuts this year but a more hawkish stance overall. Economic growth projections were lowered slightly, while inflation forecasts were revised higher, remaining above the 2% target through 2027. Chair Powell emphasized a cautious, data-driven approach, citing tariff uncertainties and a solid labor market as reasons to hold steady. Markets reacted cautiously, with equities ending flat and Treasury yields rising slightly. Meanwhile, cryptocurrency activity showed steady BTC inflows and a cooling in ETH accumulation, alongside notable developments in stablecoins and blockchain investment funds.

The US Senate has now passed the GENIUS Act, the first stablecoin and crypto legislation in the US in a 68-30 vote; the bill now also needs to pass in the House. Risk-on sentiment continues to be fragile across crypto and US equity markets amid escalating Middle East tensions. BTC briefly hit $103K yesterday before paring back some losses as President Trump posted that the US has “total control of the skies over Iran”. ETH volatility has dropped at the front end over the past 24 hours though still holds nearly a 2x premium to BTC implied volatility for similar dated options. ETH Spot ETF inflows remain strong while staked ETH hit a record 35M tokens. Ark Invest sold another $44.8M in Circle shares.