September Crypto Slide

Find out our latest reports, listed below:

‍

• Bybit x Block Scholes Quarterly Report: What will drive crypto in Q3 2025?‍
• Bybit x Block Scholes July Volatility Review‍
• ‍Bybit x Block Scholes Quarterly Report: Altcoin season and the evolving role of Bitcoin

‍

Market Snapshot: Overnight Moves:

‍

‍

Daily Updates:

• Much had been said about BTC’s seasonality in September – historically a bearish month for crypto-assets. While BTC initially bucked that trend for the first half of the month, since the September FOMC meeting it has fallen from $117K and even slipped below $110K yesterday evening (See in Charts of the Day).
• Ether also slipped below the $4,000 mark and has fallen 12% on the week — that marks its lowest level since Aug 8, 2025.

‍

• Exchange-traded funds may have added fuel to the fire. Yesterday Spot Bitcoin ETFs sold $253.4M worth of bitcoins, and so far this week, three out of four trading days have had net outflows from the ETF products.
• The story is even more bearish for Ether — Spot ETFs have seen outflows every day this week, with yesterday’s outflows almost reaching an almost identical dollar amount to the outflow in their BTC counterparts (-$251.2M).

‍

• The sharp leg down in spot price was reflected in a spike higher in realised volatility for both major tokens. In the last 24 hours, 7-day delivered BTC volatility has risen from 21% to 27%, while realised volatility for Ether has jumped a higher 10 vol points. That explains the slight move up in implied volatility too. 7-day ATM BTC vol increased to 36% last evening before falling back down, and rose to 68% temporarily for similar-dated short-tenor ETH options. That was 14 percentage points higher than implied volatility at the start of the week.

‍

• Zooming out, however, we've emphasised the trend of BTC volatility over the past few months tending towards the lower bound of its historical distribution. We covered the low levels of realised volatility here, and in our July volatility review where we said “BTC continues to print new ATHs, and yet does so with historically low levels of realized and implied volatility”.
• Back in August we touted the idea that digital asset treasuries, such as Metaplanet who have been engaging in BTC options markets via strategies such as selling put options to generate yield, may be contributing to the dampened implied volatility backdrop.
• This effect may get even stronger — yesterday, BlackRock filed an application for its Bitcoin Premium Income ETF. According to Bloomberg’s Eric Balchunas, the proposed ETF is a “covered call bitcoin strategy in order to give btc some yield”.

‍

• The rout in crypto-assets is not in isolation however. US equities also closed lower for a third consecutive day. The S&P 500 fell 0.50% and the Russel-2000 declined 0.98%.
• Those moves came amidst data that showed the US economy grew in Q2 (April-June) at the fastest pace in nearly two years.

‍

• Inflation-adjusted GDP increased at a revised 3.8% pace (annualised) according to the BEA — that was 0.5 percentage points higher than the previous estimate and comes after a 0.6% contraction in the US economy in Q1.
• The decline in first quarter GDP was mainly attributed to a surge in imports into the US which subtract from GDP growth as businesses rushed to front-run President Trump’s tariffs. That trend reversed in Q2 — imports fell at a pace of 29% which contributed more than five percentage points to the increase in growth.
• The other main driver was an increase in consumer spending. That rose at a pace of 2.5%, up from 0.6% in Q1 quarter and far higher than the original 1.6% figure reported in August.
• On the other hand, a decline in private investment and business inventories, as well as spending and investment by the federal government contributed negatively to GDP growth.

‍

• Initial jobless claims benefits also decreased by 14,000 to 218,000 last week, the lowest since mid-July.
• Together the two data points helped temper fears that the US economy is still very resilient and businesses remain somewhat reluctant to lay off workers despite trade policy uncertainty.

‍

• Short-term treasury yields rose on the news, with the 2-year yield jumping up more than 6bps to 3.66%. Markets still remain fairly confident in the probability for an October rate cut which sits at 87.7% — though slightly lower than the 91.9% implied-odds priced in yesterday.
• Speaking on Bloomberg yesterday, Fed Governor Stephen Miran said “I don’t think the economy is about to crater”, but “I would rather act proactively and lower rates as a result ahead of time, rather than wait for some giant catastrophe to occur”.

‍

• President Trump is also once more doubling down on his tariff salvo. Yesterday the US president announced a slew of sector-specific tariffs. One such example is a 100% tariff on branded or patented pharmaceuticals products on Truth Social.
• “Starting October 1st, 2025, we will be imposing a 100% Tariff on any branded or patented Pharmaceutical Product, unless a Company IS BUILDING their Pharmaceutical Manufacturing Plant in America”.
• Trump also announced plans to impose a 25% tariff on heavy trucks made outside of the US beginning in October “In order to protect our Great Heavy Truck Manufacturers from unfair outside competition”.
• At the White House yesterday, the president claimed that his administration will use funds collected from tariffs to assist US farmers who have been hit by his trade policies.
• “We’re going to take some of that tariff money that we’ve made, we’re going to give it to our farmers, who are, for a little while, going to be hurt until it kicks in, the tariffs kick in to their benefit”.

‍

• AlphaTON Capital Corp (Nasdaq: ATON) has acquired around $30M worth of TON, becoming one of the largest corporate holders.
• This comes after closing a $71M financing round consisting of a private placement of approximately 6.32M ordinary shares at $5.73 per share, raising $36.2M and also securing a $35M loan facility with BitGo Prime, LLC.

‍

• Bitwise Investment Advisers has submitted a filing on Thursday with the U.S. Securities and Exchange Commission (SEC) seeking approval for an exchange-traded fund designed to track the performance of Hyperliquid’s native token, HYPE. The proposal, disclosed in an S-1 registration statement, marks the first ETF application tied directly to the Layer 1 blockchain.

‍

• Hashdex Asset Management, in partnership with Nasdaq Global Indexes, announced on Thursday that its flagship U.S. crypto exchange-traded fund will broaden its holdings to include additional digital assets. The move follows SEC's approval of new generic listing standards for crypto-based ETFs, which now allow these funds to expand beyon just Bitcoin and Ether.
• The Hashdex Nasdaq Crypto Index US ETF (NCIQ), which previously tracked only BTC and ETH, will now include Stellar (XLM), XRP, and Solana (SOL).
• Bt trading on traditional U.S. stock exchanges, the fund gives investors egulated exposure to a diversifies basket of cryptocurrencies – without the need to directly buy or store tokens on crypto exchange.

‍

‍

Crypto’s Wildcard:

What do you call a memecoin that supports your pocket and the wildlife? … sudeng

‍

• Amidst the wider risk-on asset selloff, there’s one memecoin which is up 22% today and 94% over the past month.
• sudeng (ticker HIPPO) is a memecoin on the Sui blockchain centered around Moo Deng, a baby pygmy hippo born at Thailand’s Khao Kheow Open Zoo in 2024.
• According to the token’s website, 30% of the project’s profits are directed towards wildlife conservation around the world — the first donation being to the zoo that houses Moo Deng.
• Who knew you could mix memecoins and philanthropy?

‍

This Week’s Calendar:

‍

‍

‍

Charts of the Day:

‍

‍

‍

‍

‍

‍

‍