Block Scholes x Bybit Crypto Derivatives August 15th

Key Insights

ETH stole the spotlight this past week, with a rally of over 20% that brought it within inches of its November 2021 (ATH). That’s not to say BTC has traded quietly, however — on Aug 14, 2025 it reached a new all-time high (ATH) of $124K, driving a sentiment shift in options markets toward OTM calls. ETH has been strongly supported by a wave of institutional buying from corporate digital asset treasuries, such as SharpLink Gaming and BitMine Immersion Technologies, Inc. as well as Spot ETH ETFs, which had their first $1B inflow day on Aug 11, 2025. This is significant because derivatives markets signal a strong bullishness for the rally to continue. 

Volatility smiles for 7-day ETH options are skewed 4.8% toward OTM call options, and perpetual swap funding rates are positive, showing a willingness from traders to pay for leveraged upside exposure. BTC rose to a record high on the back of a rally that began when the US president signed an executive order that will allow 401(k) plans to invest in digital assets (such as BTC).

Perpetuals: Open interest in perpetuals reached their highest levels so far in August, largely a result of a $2B increase in open interest for ETH contracts. 

Options: Sentiment in ETH options have U-turned from their −11% skew at the start of August, 2025, and now assign a near 5% premium toward short-tenor OTM call options. Meanwhile, ETH’s term structure briefly inverted earlier in the week amidst the rally in its spot price.

Block Scholes BTC Senti-Meter Index

Block Scholes ETH Senti-Meter Index

Block Scholes’s Senti-Meter Index aggregates the funding rate, future-implied yield and volatility smile skew into a single expression of sentiment in derivatives markets. See more in the methodology article here.

Macro, tech & regs

Macro calendar & recent events

• US Core Inflation Rate for July — Aug 12, 2025 — US core inflation rose in July 2025, 3.1% year-over-year and 0.3% month-over-month, representing the fastest monthly gain since January.

• US inflation rate for July — Aug 12, 2025 — US annual inflation was steady in July at 2.7% and met forecasts, with monthly CPI up 0.2% (slightly below June).

• UK unemployment rate for June — Aug 12, 2025 — The S&P Global US Composite PMI climbed to 55.1 in July 2025, exceeding the preliminary estimate of 54.6 and improving from 52.9 in June.

• US PPI for July — Aug 14, 2025— The US Producer Price Index for July is expected to have been flat, month-over-month, at 0.2%, with year-over-year expected to have risen to 2.5% from 2.3%.

• US Initial Jobless Claims for July — Aug 14, 2025— US initial jobless claims are expected to have risen by 2,000, from 226,000 to 228,000.

• US retail sales for July — Aug 15, 2025 — US retail sales are expected to have fallen to 0.4% month-over-month and 3.5% year-over-year, down from (respectively) 0.6% and 3.9%.

ETH spot returns overtake BTC — Following a bearish start to the year, ETH spot has regained momentum since mid-April, and is now back in positive territory. ETH, nearing 20%, has overtaken BTC’s approximately 12% YTD returns.

Trending news

• Decentralized oracle provider Universal Market Access (UMA) is tightening controls on Polymarket’s resolution process. On August 6, UMA’s community approved proposal UMIP-189, intended to replace its Optimistic Oracle V2 with the new Managed Optimistic Oracle V2 (MOOV2).

• Eden Network, a protocol focused on reducing the negative effects of maximum extractable value (MEV) on Ethereum, announced on Aug 14, 2025 that it’s winding down its operations.
  

Altcoin open interest surges

Key insights

The total market cap of cryptocurrencies has smashed past $4.1T for the first time in history, as altcoins (and ETH in particular) have outperformed BTC. That outperformance has occurred even as BTC just recently touched a new ATH of $124K. Open interest for perpetual swap contracts has risen from $13B to $17B over the past week, its highest level in two months. One major driver of that increase has been a rise in contracts for Ether. In addition, since Aug 6, 2025, perp open interest for BTC contracts has increased from $6.9B to $8B. That increase occurred in two phases — first, when BTC came within inches of its then-$123K ATH on Aug 11, 2025 (though open interest fell as BTC failed to hold that level), and second (more recently) as BTC broke past $124K. 

Nonetheless, open interest in ETH perps has risen at a much faster pace, from $3.4B to nearly $6B, as its spot price is trading 23% higher over the past week alone. This rally in ETH has also dented BTC’s dominance (its share of the overall crypto market cap), currently sitting at 57.2%. 

Trade volumes have been consistently above $15B so far in August (on most days, excluding weekends). However, more recently within the week, we’ve seen volumes that have more than doubled, reaching levels closer to the end of July, when BTC initially rallied to $123K.

BYBIT PERP OPEN INTEREST — Total open interest for perpetual contracts has reached an ATH of $15.7B.

BYBIT PERP TRADING VOLUMES — Trade volumes doubled from levels earlier in the month, such as on Aug 13, 2025, during the run-up to BTC’s ATH of $124K.

Bullish funding rates 

In line with the current rally in spot prices and the growth of crypto’s total market cap to $4.1T, funding rates across most of the observed tokens are positive. That’s a bullish signal — suggesting that traders believe prices will rise, and are willing to pay a premium to keep their long positions in order to capitalize on that price rise. 

At the end of the first week of August, US equity markets were still reacting from the curve ball thrown at them as the US employment report came in weaker than expected, with significant job revisions over the months of May and June. The sinking of US equities took BTC down, too, as its price fell to $112K. However, despite this decline in spot price, funding rates have remained positive. Since then, BTC has made a new ATH and for most of the week has seen consistent positive funding rates. The same can be seen for ETH, which has been bolstered by insatiable demand from digital asset treasury firms and ETH Spot ETFs.

BTC options

Key insights

This week, BTC options reversed their downward trend in at-the-money (ATM) implied volatility since the start of August — but not until volatility had hit its lowest levels all month, at 24% on Aug 8, 2025. However, as BTC’s spot price broke through $116K (a level at which it had been trading sideways earlier in the week) and surged to $122K, short-tenor IV spiked higher to 34%. As has often been the case, that jump in short-tenor volatility wasn’t nearly enough to invert the term structure of volatility, and short-tenor IV fell back below 30%. 

Shortly after, we saw a second spike in front-end volatility as BTC exceeded its July ATH. Volatility smiles skewed toward OTM call options during the rally to $122K, but as BTC failed to hold at these higher levels, markets quickly reversed in their sentiment. Meanwhile, the 7-day put-call skew fell to −2.2% as traders bought up downside protection, though spot price didn’t fall drastically from $122K. Since BTC reached a new ATH, sentiment has once more shifted toward call options for 7-day tenors. 

The biggest news so far this week for BTC was President Trump’s signing of an executive order that will allow US retirement plans to invest in alternative assets, including digital assets such as BTC. That opens the digital assets sector to a roughly $8.7T market.

BYBIT BTC OPTIONS VOLUMES

BYBIT BTC OPTIONS OPEN INTEREST

BTC volatility

BYBIT BTC ATM TERM STRUCTURE — Unlike the compressed term structure for ETH, BTC’s term structure is maintaining a positive upward slope, similar to last week.

BYBIT BTC SVI ATM IMPLIED VOLATILITY — Short-tenor implied volatility fell to its lowest levels so far this month on Aug 8, 2025, touching just 24%.

BYBIT BTC IMPLIED AND REALIZED VOLATILITY — The decline in implied volatility over the past few months is perhaps unsurprising, given the overall downward trend in realized volatility.

ETH options

Key insights

This week, the spotlight in crypto has been on Ether. For much of this cycle, we’ve commented on ETH’s lagging moves and underperformance relative to BTC. However, this week it’s rallied 23% — and, over the past 30 days, a whopping 55%. This means that, year-to-date, ETH has outperformed BTC, and is now trading within a hair of its November 2021 ATH. Compared to that date — and despite being at almost the same price now — this time, the ETH rally has been supported by institutional interest via digital asset treasuries, Spot ETH ETF inflows (which had their first $1B inflow day on Aug 11, 2025) and government regulation, which is pushing stablecoin interest and tokenization toward the Ethereum network. 

As we commented last week, traders in ETH options are still far more willing to push the front end of the term structure higher during periods of spot market rallies (we saw evidence of this on Aug 10, 2025, as ETH’s term structure briefly inverted). Interestingly, despite huge moves in ETH’s spot price, we haven’t seen a major increase in options volumes, which have averaged $200 million per day this past week.

BYBIT ETH OPTIONS VOLUMES

BYBIT ETH OPTIONS OPEN INTEREST

ETH volatility

BYBIT ETH VOLATILITY TERM STRUCTURE — After a brief inversion, ETH’s term structure is flat at 66%.

BYBIT ETH SVI ATM IMPLIED VOLATILITY — ETH options are maintaining their 2x premium over BTC options, and are showing a much stronger willingness to push the front end of the term structure during big market moves — such as on August 10, when ETH’s price broke $4,300.

BYBIT ETH IMPLIED AND REALIZED VOLATILITY — Implied volatility for 30-day ETH options and 7-day realized volatility are matching, at just under 70%.

SOL options

The typical cycle of capital rotation in previous crypto bull runs has followed a path in which BTC rallies first, and then capital is rotated into ETH and other large-cap altcoins (such as SOL). Recently, the Solana network’s native token has caught a major bid, and is trading 23% higher over the past seven days (and 15% higher in the past 24 hours alone). As such, implied volatility across SOL options has rocketed higher, with 7-day SOL options trading with an IV of 76%. 

Similar to ETH, however, this rally in spot price hasn’t been met with a major increase in options volumes to the levels seen in late July — a month when SOL and most altcoins also rallied significantly. Open interest for SOL continues to be dominated heavily in call options, as has now become the norm.

BYBIT SOLUSDT OPTIONS VOLUMES

BYBIT SOLUSDT OPTIONS OPEN INTEREST

SOL volatility

BYBIT SOL VOLATILITY TERM STRUCTURE — Outright volatility levels are between 8 and 16 percentage points higher across the term structure as compared to last week.

BYBIT SOL SVI ATM IMPLIED VOLATILITY — 7-day options implied volatility has jumped higher, in line with a rally in SOL’s spot price past $200.

BYBIT SOL IMPLIED AND REALIZED VOLATILITY — After falling through the tail end of July, 30-day implied volatility has generally moved higher through August from a low of 58% to 75%.

ETH and BTC sentiment turn bullish

Key insights

ETH’s options market sentiment has turned around completely since the beginning of August 2025. At the start of the month, ETH skew fell to lows of −11% in the aftermath of the weak US jobs report. That meant short-tenor OTM put options carried an 11 percentage-point implied volatility premium over OTM calls of similar maturity. Since then, ETH’s spot price has rallied significantly, and now looks poised to touch its November 2021 ATH of $4,878. 

That rally has been strongly supported by institutional appetite for ETH: BitMine, a Bitcoin mining firm–turned–digital asset treasury for ETH, has become the largest holder of the token, with over 1 million Ether held in its reserves. More recently, the firm filed with the SEC to expand its ATM equity program of $4.5B by another $20B to fund further ETH purchases. Other corporate treasuries such as SharpLink Gaming raised $900M in capital over the past week to buy more ETH. This demand crunch is being further amplified by Spot ETH ETFs, which purchased $1B worth of ETH in a single day on Aug 11, 2025. 

This strong demand has helped support ETH’s rally to $4,700 and pushed ETH skew to 4.8% in favor of calls for short-tenor options — a strong bullish signal. The same bullish flick is apparent for BTC, too: During the most recent run to a new ATH of $124K, put-call skew sharply shifted from its −1.89% levels, assigning as much as a 3.85% volatility premium to out-of-the-money call options.

BYBIT BTCUSDT PUT-CALL SKEW

BYBIT ETHUSDT PUT-CALL SKEW

Volatility by exchange

BTC, 1-MONTH TENOR, SVI CALIBRATION

ETH, 1-MONTH TENOR, SVI CALIBRATION

Bybit volatility surface

Constant maturity smile

Data & methodology

Data acquisition, composition & timeline

Open interest and trading volume data are sourced “as is” from the Bybit exchange platform API exclusively, and as such do not represent a comprehensive picture of the sum of trading activity across all derivatives markets or exchanges. The data visualized in this report consists of hourly and daily snapshots, recorded over the previous 30 days. Daily (hourly) snapshots of trade volume record the total sum of the notional value of trades recorded in the 24H (1 hour) period, beginning with the snapshot timestamp.

If not explicitly labeled as derived from another exchange, the input instrument prices to all derivatives analytics metrics in this report are sourced from the appropriate endpoints of Bybit’s public exchange platform API. In the event that data is labeled or referred to as representing the market on another exchange source, that data is sourced from the appropriate endpoint of each respective exchange’s public API.

Macroeconomic charts and data are sourced “as is” from the Bloomberg Terminal. Exchange data is sourced “as is” from publicly available exchange APIs. Block Scholes makes no claims about the veracity of public third-party data.

Open interest & volume dollar denomination

After acquisition of underlying-denominated raw data for open interest and trading volume on the Bybit exchange platform from Bybit’s API endpoint, equivalent dollar-denominated figures are calculated using the concurrent value of Block Scholes’s Spot Index for the relevant underlying asset.

Block Scholes’s Spot Index represents the aggregate Spot mid-price for a given currency across the top five CEXs by volume (with USD-quoted markets). It considers the proportion of total volume in the instrument on the exchange, as well as the deviation of a data point from those on other exchanges.

Block Scholes–derived analytics metrics

Futures prices are used for Block Scholes’s futures-implied yields calculation services in order to derive the constant-tenor annualized yields displayed in the Futures section of this report.

Options prices are used for Block Scholes’s implied volatility calculation services in order to calibrate volatility surfaces, from which all derivatives volatility analytics displayed in the BTC Options and ETH Options sections of this report are calculated. Volatility smiles are constructed by calibrating to mid-market prices observed in Bybit options markets. As part of the calibration process, prices go through rigorous filtration and cleaning steps, which ensures that the resulting volatility surface is arbitrage-free and has exceptional fit to the market observables.