Block Scholes x Bybit Crypto Derivatives May 9 2025

Key insights

Further sideways spot price activity has led both BTC and ETH to trade within their respective bounds of $94–97K and $1.7K–$1.8K. In response, their respective implied volatility levels continued dropping off for most of the past seven days before each bounced off its own 18-month floor after it was announced that the US and China would be having their first trade talk following a long game of cat and mouse, which saw neither side back down. In turn, we saw a near recovery of ETH skew from OTM puts and a bullish bounce toward calls from neutral levels for BTC. 

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Perpetuals: ETH funding rates have mostly registered positive values, whereas funding rates for BTC have fluctuated between −0.1% and +0.1% as spot prices have traded sideways. 

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Options: Implied volatility for BTC and ETH leaked lower for most of the past seven days before a bounce on May 6 after positive tariff developments. Open interest and volumes for calls are dominating puts for ETH, as ETH’s spot price has outperformed BTC’s over the past week as of the date of this report (May 7, 2025).

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

• S&P Global US Services PMI for May — May 5, 2025 — The S&P Services PMI came in at 50.8, slightly below the forecast of 51.0 and down from the previous value of 51.4.

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• ISM Non-Manufacturing Index for May — May 5, 2025 — The ISM Non-Manufacturing Index came in at 51.6, beating the forecast of 50.4 and up from the previous reading of 50.8.

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• US trade deficit for March — May 6, 2025 — The US trade deficit widened 14% from the prior month to a record $140.5 billion.

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• China PBOC 10-point stimulus plan — May 7, 2025 — The PBOC announced a slew of stimulus measures, including a cut to the seven-day reverse repo rate and a 50 bps cut to the reserve requirement ratio for banks.

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• US initial jobless claims for May 8, 2025 — May 8, 2025 — Jobless claims by workers filing for the first time are expected to come in at 230,000, slightly down from the previous figure of 241,000.

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• Back to track? — Having shown signs of decoupling from US equities in the aftermath of April’s tariff announcements, BTC has returned to tracking the movements of the S&P 500 index.

Trending news

• Pectra, a major upgrade to Ethereum’s Mainnet, is now live with a successful activation and the completion of testing.
• The US state of Florida’s strategic Bitcoin reserve bill, which proposed allowing public funds to be invested and managed in Bitcoin, has been “indefinitely postponed and withdrawn from consideration.” 
• Strategy (MSTR) has expanded its Bitcoin holdings with the purchase of an additional 1,895 BTC between Apr 28–May 4, 2025, at an average price of $95,167 per coin.

Open interest for perpetual swaps drops off

Key insights

Open interest in perpetuals has dropped by around $1.15B from its May 1, 2025 high as BTC spot continues to consolidate within a tight band of $94K–$97K. So far, in May 2025, any subsequent rally or drop in price action has seen BTC rise or fall to one extreme of that band. 

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Most recently, the announcement of a trade meeting between the US and China later this week resulted in BTC moving up toward the ceiling of the range ($97K). Weekend activity continues to remain 50% lower than weekdays in perp trade volumes, with Sunday volumes consistently outperforming that of Saturdays. Additionally, 60% of open interest across the tracked tokens consistently remains in BTC perps. 

BYBIT PERP OPEN INTEREST — Open interest for the nine tracked tokens has trended downward since a late April high of $8.9B, settling in the past week below $8B.

BYBIT PERP TRADING VOLUMES — Trade volumes hit highs of $25.7B at the start of the month, when US growth data disappointed, but have dropped below $13B throughout the past week.

Range-bound spot and funding rates

BTC is up 4.73% since May 1, 2025, consolidating above $90K and trading just shy of the psychological wall of $100K once more. Recent spot price rallies have been met with either flat funding rates, or (as was the case of last week) counterintuitively negative funding rates. Sideways spot price action for the majority of the past week has resulted in a mix between the two, with traders not meaningfully committing to either back or fade the recent leg up. 

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The consistently positive funding rates observed with ETH last week have continued into this week, while another metric of derivatives sentiment, the put/call skew for ETH, has nearly recovered to neutral. Toncoin is down 5% over the past week and has seen some negative funding rates after being firmly positive at the tail end of April.

BTC options

Key insights

Throughout the past week, BTC implied volatility continued to tail off toward the floor of 35% that it’s consistently bounced off of for more than 18 months. This week saw a similar story: implied volatility for short tenors reached that floor, and have bounced five points since, now trading close to 40%. This bounce in implied volatility has been accompanied by a flat level of realized volatility (close to 30%), its own respective floor. 

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Meanwhile, open interest for BTC options continues to be stronger in puts than in calls (as we also saw last week). The demand for puts may be a sign of traders protecting themselves from a reversal in the relief rally, should tariff negotiations between the US and its partners disappoint, or perhaps instead fading a further move up in spot price.

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BYBIT BTC OPTIONS VOLUMES

BYBIT BTC OPTIONS OPEN INTEREST

Volatility remains steep

BYBIT BTC ATM TERM STRUCTURE — The term structure of volatility is exhibiting a nearly linear shape, as volatility has ended the past week in the same place it began.

BYBIT BTC SVI ATM IMPLIED VOLATILITY — Implied volatility had continued to leak down toward an 18-month floor of 35% in May 2025 until a more recent bounce back up to 40%.

BYBIT BTC IMPLIED AND REALIZED VOLATILITY — Realized volatility moved sideways at its own 18-month floor of 30% over the past week, as BTC’s spot price remained range-bound.

ETH options

Key insights

Whereas open interest for BTC has been dominated by puts, the opposite is true for ETH. Open interest is now $39M greater for ETH calls than for puts, and options volumes are dominated by calls as well. Over the past week, ETH has outperformed BTC on the way up (+4%), though currently it’s still a distance away from $2K, a level it last saw back in early March 2025. 

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Volatility expectations for ETH remain higher than for BTC, and Ether’s term structure is positively sloped upward. That matches the positive futures curve and the mostly positive funding rates over the past week. However, the put/call skew, another measure of sentiment for ETH, is now tilted toward OTM puts at short tenors from its previously neutral value.

BYBIT ETH OPTIONS VOLUMES

BYBIT ETH OPTIONS OPEN INTEREST

ETH realized volatility falls

BYBIT ETH VOLATILITY TERM STRUCTURE — ETH’s term structure has steepened as lower realized volatility has caused short-tenor volatility expectations to fall.

BYBIT ETH SVI ATM IMPLIED VOLATILITY — ETH’s implied volatility across the term structure recently jumped, although it remains three points lower at the front end as compared to this time last week.

BYBIT ETH IMPLIED AND REALIZED VOLATILITY — Compared to BTC, ETH’s realized volatility fell around 10 points before experiencing a slight rebound.

SOL options

Open interest for SOL options has moved almost monotonically upward, having now recovered from a big expiration at the end of April that saw $2M of open interest in calls expire. Currently, calls dominate puts in both open interest and volume, despite SOL performing worse over the past week than majors BTC and ETH (up only 2.5%). 

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Implied volatility for Solana has continued to drop, with May 2, 2025 marking a local bottom. Since that bottom, short-tenor implied volatility has spiked up 12 points before dropping off slightly. SOL funding rates have mostly seen long positions pay fees to those with short positions over the past seven days, and skew has bounced from a bias toward OTM puts, to now close neutral (though still slightly negative).

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SOL volatility continues to drop

BYBIT SOL VOLATILITY TERM STRUCTURE — Unlike the slight increase for BTC, implied volatility across SOL’s term structure has dropped by five points for the 7-day tenor.

BYBIT SOL SVI ATM IMPLIED VOLATILITY — Implied volatility has continued April’s downward trend, more recently bouncing off a 63% low to range sideways at 70%.

BYBIT SOL IMPLIED AND REALIZED VOLATILITY — Thirty-day implied volatility and 7-day realized volatility levels have both moved sideways for most of the past week. Realized volatility is 10 points lower than that implied by the 30-day tenor.

Skew drops and recovers

Key insights

BTC’s volatility smiles were skewed toward calls for most of the past week before a brief drop to neutral, with a subsequent bounce back up toward calls (currently 2%) on May 6, 2025. That came following an announcement that US Secretary of the Treasury Scott Bessent would be meeting with Chinese Vice Premier He Lifeng to discuss trade policy. The skew of ETH smiles, which in contrast to BTC has been toward puts over the same period, has moved 3 percentage points to now nearly 0%. 

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Over a longer horizon, both BTC and ETH sentiment is more bullish. While ETH’s skew hasn’t quite recovered a bullish tilt at shorter maturities, other measures of directional sentiment suggest some bullish expectations from traders. For example, futures yields have risen from their April lows, and remain positively sloped, and funding rates have also mainly been positive. 

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.

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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.

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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.

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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.

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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.

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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.

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