Crypto Derivatives and Lending Stress During the FTX Collapse

Summary

This market report examines how the FTX and Alameda crisis affected crypto lending, derivatives, liquidations, and decentralized finance. It describes lenders recalling loans or demanding more collateral, a sharp reduction in new lending, and volatile perpetual funding as traders moved positions and conserved capital. The authors expect lending liquidity to recover slowly, while noting that the extent of contagion and its duration were uncertain.

For BTC and ETH, the report tracks a surge in implied and realized volatility, a shift toward put premium, and changes in open interest by expiry and strike. Large liquidations occurred on both long and short sides, and option positioning showed reduced upside call interest alongside greater demand for downside puts. It also discusses heightened altcoin volatility and pressure on Solana DeFi, alongside increased activity on decentralized exchanges. These observations form a crisis snapshot based on market data; they do not establish causal estimates or a repeatable trading strategy, and the authors warn that forecasts for individual tokens were especially uncertain.

Key ideas

• The FTX crisis tightened crypto lending as lenders recalled loans and reduced new credit.
• Perpetual funding rates became volatile as traders transferred positions and reduced risk.
• BTC and ETH volatility rose sharply, with options skew shifting toward puts.
• Open interest changes showed reduced call exposure and increased downside put demand.
• Altcoin volatility and DeFi activity diverged as exchange confidence weakened, with outcomes remaining uncertain.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.