ETH volatility at lowest since Trump Elected

Find out our latest reports, listed below:

• DeepBook - “The Backbone of Sui DeFi Liquidity”

• Premia x Block Scholes: Introducing Kyan

• 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?

Daily Updates:

• What positioning does remain in ETH markets is bearish in ETH.
• However, in contrast BTC options markets have erased the short-term bearishness that was priced in by volatility smiles. The skew of BTC’s 7-day volatility smile has moved to near 0% (in favour of neither puts nor calls) overnight from a decisive 3.5% skew towards puts.

• Dec 10’s FOMC meeting delivered a third consecutive cut to the Fed Funds rate, and subsequent releases of weaker-looking jobs market data and an unexpectedly lower (if misleading) CPI print
• However, futures currently price in a probability of 84.5% that the FOMC votes to make no change at their first meeting of 2026 on Jan 28.
• Markets still expect between 2 and 3 cuts to the FFR in 2026, with Trump ally (and suspected super dove) Kevin Hassett retaining his lead as the frontrunner candidate to replace Chair Jerome Powell in mid-2026.

• Hong Kong regulators have set a target of legislating virtual asset dealers and custodians next year, including the creation of a licensing framework. Initial comments on a consultation are expected on Jan 23.
• Regulatory clarity for custodians and dealers of virtual assets is a key foundational step for regulating crypto assets as it unlocks more complex use cases, such as exchanges, lending, and even access to crypto-assets via traditional, regulated rails.

• A Polymarket layer-2 (and potentially an accompanying token launch) is being speculated on. However, ecosystem developers have been quick to play down the possibility.

• American financial technology company SoFi has launched the SofiUSD stablecoin on the Ethereum mainnet network. SofiUSD is claimed to be fully backed by cash held at Sofi’s depositary institutions.
• SoFiUSD’s implementation is similar to JPMorgan’s JPM Coin: a tokenized bank deposit that distinguishes it from stablecoins like USDT, which are backed by cash (and other asset) reserves.

Market Snapshot: Overnight Moves