Renewed US-Iran Escalation Sours Risk Sentiment as Crypto Volatility Jumps

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In Today's Note

• A weekend re-escalation of the US-Iran conflict soured risk sentiment, sending BTC back to just above $63K and opening US equity futures lower, reversing Friday's modest gains in the S&P 500 (+0.42%) and Nasdaq-100 (+0.33%). Brent crude jumped 4% toward $80, the 2-year Treasury yield rose to 4.24% and 7-day BTC ATM IV climbed to 35% as traders bid up put protection. Attention now turns to Tuesday's US CPI and Fed Chair Warsh's first congressional testimony.
• A bipartisan US housing bill became law that also bars the Federal Reserve from issuing a CBDC, while the DOJ is reportedly preparing to drop charges in the $722M BitClub mining-fraud case. SBI Group will launch a 3% yield product on its JPYSC yen stablecoin on July 16, and Michael Saylor teased Strategy's next bitcoin move days after the firm sold 3,588 BTC for about $216M.

Market Snapshot: Overnight Moves

Macro & Markets

• A re-escalation in the conflict between the US and Iran over the weekend has soured sentiment in crypto assets and US equities, contrasting moves at the end of last week.
• In last Friday’s trading session, the S&P 500 and Nasdaq-100 closed modestly higher, 0.42% and 0.33% respectively, while BTC traded as high as $64.5K.
• Today, BTC is hovering just above $63K, while US equity futures have opened negatively.
• Implied volatility in options markets has also jumped over the weekend. After falling to a low just below 30% on early Saturday morning, 7-day ATM IV moved up five vol-points to 35%, while traders pushed up demand for put options. The 25-delta put-call skew fell from -3% and currently trades at -6%.
• On Friday President Trump posted on his Truth Social platform that "The Islamic Republic of Iran has asked us to continue 'talks.' We have agreed to do so, but the United States has stated to them, in no uncertain terms, that the Cease Fire is OVER!"
• Additionally, after reports that there was a potential assassination plot on his life, Trump also threatened that the US has “1,000 missiles” that are “Locked and Loaded and aimed at the Islamic Republic of Iran, with thousands more to immediately follow, should the Iranian Government act on its threat, pronounced in many corners of the Globe, to assassinate, or attempt to assassinate, the sitting President of the United States of America, in this case, ME!”
• Iran rejected Trump’s message that peace talks could continue without a ceasefire however, claiming Washington must meet Tehran’s conditions for resolving transit issues through the Strait of Hormuz and normalising its exports of oil again. According to the Fars news agency, Tehran is looking for the US to implement “agreed-upon understandings” before any talks resume.
• On Sunday, US forces attacked targets in Iran for a fourth time in a week, prompting retaliatory attacks from Tehran, who also declared the Strait of Hormuz would be closed "until further notice” earlier in the weekend.
• The Islamic Revolutionary Guard Corps (IRGC) said it won't allow any vessels to pass until foreign interference ends, according to state-run IRIB News.
• The tit-for-tat attacks this weekend began after the Iranian military halted a Cyprus-flagged container ship after firing a warning shot because the ship aimed to transit the strait despite the warning.
• The US Central Command said President Trump had ordered a new wave of strikes targeting Tehran's ability to attack commercial vessels after the Iranian military struck the container ship.
• Iran responded by launching drone and missile assaults on at least five American ally nations across the Middle East, though no casualties were reported.
• Then on Sunday afternoon, CNN reported that the IRGC had once again fired at commercial ships in the strait.
• Brent crude prices have jumped 4% since their open today, trading close to $80 per barrel currently.
• The yield on the two-year treasury note rose three basis points to 4.24%, its highest level since February 2025 amidst the jump in oil prices and speculation that tighter Fed policy could be needed if the attacks continue.
• According to overnight-indexed swap contracts, traders are pricing in the next rate hike by October 2026, compared with December only a week ago.
• Looking ahead to the week, Kevin Warsh is expected to make his first appearance as Chairman of the Fed before the US Congress in a two-day testimony session beginning Tuesday 10am in Washington.
• His first session will be preceded by the BLS’s June CPI report, which is expected to show headline inflation recording its first month-over-month decline since the onset of the pandemic back in 2020.
• According to Bloomberg’s survey of economists, the drop in gasoline prices over the month of June has resulted in a median expectation of a 0.1% decrease in headline CPI MoM. Core CPI is expected to increase at a pace of 0.3% between May and June.
• This week’s calendar also contains a number of Fed speakers: Fed Governor Christopher Waller on Monday, remarks from New York Fed President John Williams on Wednesday, and speeches from Vice Chair Philip Jefferson, Dallas Fed President Lorie Logan, and Kansas City Fed President Jeff Schmid on Thursday.

DeFi / Web3 / Altcoins / Crypto

• The 21st Century ROAD to Housing Act, a bipartisan U.S. housing bill, became law without President Donald Trump’s signature after the 10-day constitutional window passed without a veto.
• The bill is mainly aimed at expanding housing construction and financing options, but it also includes a crypto-related provision banning the Federal Reserve, the U.S. central bank, from issuing a central bank digital currency.
• The U.S. Department of Justice (DOJ), is reportedly preparing to drop charges against Matthew Goettsche, the alleged operator of BitClub Network, a crypto mining investment scheme, in a case prosecutors said defrauded investors of $722M.
• The case, first indicted in 2019 and scheduled for trial in October, accused Goettsche of running a Ponzi-style crypto mining operation that rewarded investors for recruiting others while allegedly reporting fake mining profits.
• DOJ said the case had been pending for seven years and that the government is recovering a substantial amount for investors, while the reported dismissal comes amid the Trump administration’s broader pullback from crypto enforcement.
• SBI Group, a Japanese financial conglomerate, is set to launch a lending service this month that offers users a 3% annual yield on deposited JPYSC, its yen stablecoin.
• The 12-week fixed-term product will open for applications on July 16 through SBI VC Trade, the group’s crypto trading platform, less than a month after SBI launched JPYSC.
• SBI said JPYSC is part of its broader push into onchain finance, alongside recent investments in Gauntlet, a crypto risk management firm, EDX Markets, an institutional crypto trading platform, and its acquisition of Bitbank, a Japanese crypto exchange.
• Strategy’s Michael Saylor posted the company’s bitcoin acquisition tracker with the caption “Orange dots tell only part of the story,” days after Strategy, the largest corporate bitcoin holder, sold 3,588 BTC for about $216M.
• The post leaves open whether Strategy’s next disclosure will involve a new bitcoin purchase, further sales or another capital-management move, after the company adopted a broader framework allowing BTC sales to fund reserves, preferred dividends, debt interest and securities repurchases.
• The Bank of Thailand and Thailand’s Securities and Exchange Commission, are reportedly analyzing high-volume stablecoin transactions, especially USDT, to detect money laundering and other illicit activity.
• The reviews are part of a broader crackdown on Thailand’s shadow economy, with authorities also tightening controls on large cash deposits and withdrawals, gold trading and accounts linked to online gambling.

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