How the 2025 Crypto Selloff Reshaped Derivatives Pricing

Summary

This weekly market recap describes how BTC and ETH derivatives reacted to a sharp October 2025 selloff following escalating US–China trade tensions. It reports that BTC had first reached a new high, then fell alongside ETH as more than $19 billion in positions were liquidated on Friday. The report tracks futures implied yields, perpetual funding rates, at-the-money implied volatility, and 25-delta risk reversals to characterize the move.

Its observations include a rare inversion in BTC’s volatility term structure, elevated short-dated volatility in both assets, and a pronounced shift toward put demand during the decline. BTC futures yields turned negative, while BTC perpetual funding stayed positive and ETH funding fell before rebounding. These are descriptive market snapshots, not a tested strategy or causal analysis; the text provides no full chart data or method for reconstructing the reported measures.

Key ideas

• The report links a major BTC and ETH selloff with extensive liquidations and abrupt derivatives repricing.
• Short-dated implied volatility rose enough to invert the BTC and ETH volatility term structures.
• Options smiles shifted toward puts as traders priced greater demand for downside protection.
• BTC futures yields turned negative while its perpetual funding rate remained positive during the selloff.
• The recap reports market conditions but does not establish a trading strategy or causal model.

Tags

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