Crypto Options Volatility and Skew Around the January 2025 Inauguration
Summary
This market commentary examines Bitcoin and Ether derivatives around the January 20, 2025 U.S. presidential inauguration. It describes how expectations of executive actions, including speculation about a Strategic Bitcoin Reserve, coincided with inverted volatility term structures, elevated perpetual swap funding, and a premium on short-dated futures. After the event produced fewer announcements than traders had anticipated, those conditions eased and at-the-money implied volatility moved back toward early January levels.
The report also highlights persistent out-of-the-money call skew in Bitcoin options, while short-dated Bitcoin smiles remained somewhat put-skewed after a spot rally. Ether volatility structure also inverted and then flattened, but its short-tenor skew did not show the same bullish shift described for Bitcoin. The evidence is qualitative commentary and referenced charts whose numerical details are not included in the text. It captures a specific event window and offers no tested strategy or evidence that these patterns predict future returns.
Key ideas
- Expectations around the inauguration coincided with inverted BTC and ETH volatility term structures.
- Perpetual swap funding and short-dated futures premiums eased after anticipated announcements did not materialize.
- Bitcoin options retained out-of-the-money call skew across maturities, while short-tenor skew also showed some put demand.
- Ether’s short-tenor options skew did not share Bitcoin’s reported increase in bullishness.
- The commentary describes a short event window and does not establish predictive signals.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.