“What do you do if you’re driving in the fog?”

Find out our latest reports, listed below:

• 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?

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• Metaplanet Is Selling Vol, Who Is Next?

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• Bybit x Block Scholes August Volatility Review

Market Snapshot: Overnight Moves:

Daily Updates:

• As widely expected, the FOMC voted on Wednesday to lower the target range for the federal funds rate by 25bps to 3.75%-4%. The decision was not unanimous, however, (10-2) and was the first since September 2019 where two officials dissented in both directions (Stephen Miran opted for a 50bps cut, while Jeffrey Schmid voted for no change).
• The committee also voted to end the reduction of its asset purchase program, beginning December 1, 2025. 

• Most market participants are well familiar with the boilerplate language typically used in Jerome Powell’s opening statement – future monetary policy will be “based on the incoming data, the evolving outlook, and the balance of risks”.  
• However, Powell added an additional hawkish comment in his statement: “at this meeting, there were strongly differing views about how to proceed in December. A further reduction in the policy rate at the December meeting is not a foregone conclusion—far from it”. 

• That would foreshadow the tone regarding the December meeting for much of the proceeding Q&A:

“You know, I always say that it’s a fact that we don’t make decisions in advance, but this is, I’m saying something in addition here, is that it’s not to be seen as a foregone conclusion. In fact, far from it.” 

“We just don’t know what we’re going to get. If there is a very high level of uncertainty, then, you know, that could be an argument in favor of caution about moving.” 

“If you ask me could it affect the December meeting, I’m not saying it’s going to but, yeah, you could imagine that. What do you do if you’re driving in the fog? You slow down” (in reference to impact of the continued data blackout amidst the government shutdown)

• That last quote above is not one we haven’t heard from Chair Powell before either, or in fact from other Fed members. 
• Back in the Dec 18, 2024 meeting Powell said, “it’s kind of commonsense thinking that when the path is uncertain you go a little bit slower. It’s not unlike driving on a foggy night or walking into a dark room full of furniture. You just slow down”. Note that the Dec 18, 2024 cut marked the final rate cut for the September 2024-to-December 2024 cycle, until the Fed reduced interest rates again a year later in September 2025.

• Other notable highlights in the presser included Powell’s stance on inflation and the stock market. 
• Powell outright stated “you’ve seen goods prices increasing, and that’s really due to tariffs … On the other side of that, good news that housing services inflation has been coming down”. 
• He then said that “inflation away from tariffs is actually not so far” from the Fed’s 2% goal: according to estimates at the Fed, if core PCE is 2.8%, then “core PCE not including tariffs might be 2.3 or 2.4 … So that’s not so far from your goal.”
• In regards to the comparisons between the current US stock market and that of the 1990s, Powell said there was a “clear bubble” back then and this time “the companies that are so highly valued actually have earnings … So it’s a really different thing”. 

• That provided some comfort to risk-on sentiment in US equities which initially plunged lower following Powell’s “far from it” comment. The S&P 500 slowly pared most of those losses back, ultimately ending the day flat. Two-year treasury yields spiked to their biggest daily gain in four months, (up 10bps to 3.6%). 

• Bitcoin was not spared from the hawkish comments either — falling from $111K to $108K in the hours after the meeting. 

• It now trades back above $111K, following a return to a detente between the US and China. President Trump and Xi agreed on a number of terms following a 90 minute meeting: a one-year extension on the pause of the 100% tariff increase threatened by Trump ahead of the meeting which according to Trump will “be very routinely extended”, a halving in fentanyl related tariffs on Chinese goods from 20% to 10%, a pause from China on its export controls of rare-earths and a resumption of soybean and agricultural purchases by China from the US. 
• Aboard Air Force One, Trump said “I guess, on the scale from zero to 10, with 10 being the best, I would say the meeting was at a 12”.

• Despite a seeming pause in the tariff brinkmanship between the two largest economies in the world, positioning in crypto options markets continues to favour a bias towards puts. 25-delta put-call skew for one-week contracts in BTC and ETH trade at -3.4% and -4.0%, respectively. Additionally, ATM vol levels remain elevated for both assets at 40-45% and 64-69%, respectively. 

• Canton Network, a privacy focused layer 1 blockchain, are planning to raise approximately $500M for a publicly traded digital asset treasury fund that will hold Canton Coins
• DRW Holdings and Liberty City Venture are expected to lead the funding round alongside around $100M to $200M expected from outside investors.

• Ethereum is strengthening its reach to onboarding institutional clients and has launched a dedicated Ethereum for Institutions website. The site, created by the Ethereum Foundation’s Enterprise Acceleration team, provides resources to guide businesses adopting Ethereum and highlights the use cases for developers, builders and institutions.

• Ondo Global Markets, the largest tokenised securities platform by total value locked, has launched on BNB Chain, providing onchain access to over 100 U.S. stocks and ETFs through PancakeSwap integration.

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