Sentiment Dips

In case you missed it! Our recap of last week’s reports:

• DeFi Analytics 8th August 2025
• Bybit x Block Scholes Quarterly Report: Altcoin season and the evolving role of Bitcoin
• Block Scholes x Bybit Crypto Derivatives

Daily Updates:

• After bursting to a record high early Thursday morning, Bitcoin fell to a low of $117K by the middle of the day, amidst signs of inflationary pressure in the US at the wholesale level.

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• The Producer Price Index (PPI) measures the average change over time in selling prices received by domestic producers of goods and services — therefore, it measures price change from the perspective of the seller, compared to CPI which measures price change from the purchaser's perspective. 
• Yesterday, the BLS’s PPI report showed the PPI for final demand increased 0.9% in July from a flat 0% reading in June, and far higher than expectations of 0.2%. Compared to a year ago, PPI rose 3.3%, once more exceeding expectations of a 2.5% reading. 
• Additionally, the core PPI rose 3.7% year-over-year, the highest increase since March 2022. 
• A higher than expected PPI figure alongside what markets took as a relatively soft CPI report recently suggests businesses are so far absorbing the cost of tariffs and have not yet passed all the costs onto consumers; regardless this week’s CPI report did show some passthrough effects, which we covered here.

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• Despite the PPI numbers, market-implied odds for a September rate cut remain at 92.6%, meaning the wholesale rise in prices was not enough to deter market participants from their expectations of at least a 25bps cut at the next FOMC meeting. 

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• Risk-on assets including altcoins and US equities all pulled back following the release. The S&P 500 dropped 0.3% though recovered later in the trading session to end the day flat. The Nasdaq 100 equally posed a rebound and ended yesterday slightly below its open. 
• Altcoins however are not all back to their pre-PPI levels. ETH is down 1.7% over the past 24 hours, trading below $4,700, while SOL dipped below the $200 mark and trades at $197 currently. 

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• Sentiment in derivatives markets has pulled back sharply over the past 24 hours. Both ETH and BTC funding rates have dropped from 0.03% to neutral levels, remaining just slightly above 0%, while ETH’s futures term structure has disinverted as 7-day spot yields collapsed from 10% down to 5%. 
• In options markets, a fall in the OTM call side of the volatility smile and a slight increase in the implied volatility of OTM put options over the past 24 hours has resulted in the put-call skew ratio turning negative. Prior to the PPI release, put--call skew for 14 day options was at 4.57% and has since fallen to -1.03%. 
• However, longer-tenor options beyond 30 days until maturity remain skewed towards call options for ETH. 

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• Despite the more negative sentiment in options markets, Spot Ethereum ETFs continued to record significant inflows of $639.6M, marking an eighth consecutive day of positive net flows of $3.71B.
• BlackRock’s ETHA led with $519.7M, followed by $60.7M for Grayscale’s Ethereum Mini Trust and $56.9M for Fidelity’s FETH. The momentum follows Monday’s record $1.02B inflow. 
• Crypto prices were also negatively impacted by comments from Treasury Secretary Scott Bessent who signalled that the US would not be purchasing Bitcoin for its Strategic Reserve.
• During an interview with Fox Business, Bessent said “We've also started to get into the 21st century, a bitcoin strategic reserve. We're not going to be buying that, but we are going to use confiscated assets and continue to build that up."
• That reserve of seized BTC is currently worth $15-20B according to Bessent. 

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• The Treasury Secretary's comments however do not confirm anything new. In March when President Trump first announced the Strategic Bitcoin Reserve, his executive order stated “the United States Government shall not acquire additional Stockpile Assets other than in connection with criminal or civil asset forfeiture proceedings or in satisfaction of any civil money penalty imposed by any agency without further executive or legislative action.”
• Later on X however, Bessent posted: “In addition, Treasury is committed to exploring budget-neutral pathways to acquire more Bitcoin to expand the reserve, and to execute on the President’s promise to make the United States the ‘Bitcoin superpower of the world.’”

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• BTCS Inc. (Nasdaq: BTCS), a publicly traded blockchain technology firm, now holds 70,140 ETH valued at over $321M, according to its Q2 earnings report. The Ethereum-focused firm posted $4.46M in first-half 2025 revenue — a 341% year-over-year increase — driven largely by its Builder+ gas-optimising block-building service, which grew from $76,000 to $2.51M over the past year.
• The firm plans to raise up to $2B through share sales to acquire more ETH, advancing its “flywheel” strategy aimed at scaling operations and boosting ETH generation.

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• Coinbase has officially closed and completed its acquisition of crypto options exchange Deribit. 
• The deal follows Deribit’s record breaking monthly performance of  $185B trading volume and around $60B open interest in July 2025, amid a growth in institutional flow.

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• US based cryptocurrency mining company TeraWulf is expanding into AI infrastructure hosting, signing a 10-year lease agreement with Fluidstack expected to generate $3.7B over the period.
• Google is backing Fluidstack’s $1.8B lease obligations and providing debt financing in exchange for 41M WULF shares, which is around an 8% stake of TeraWulf.

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