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BTC ATM IV

ETH ATM IV

When I wrote the last newsletter, the US and Israel had just launched strikes on Iran and crypto was ripping. BTC was at $69,600, the digital gold narrative was alive and well, and I told you this might be the moment the story gets tested for real. Well... it got tested. And it failed. BTC is now at $67,473, down another $2,100 since last time, and it's day 31 of a full blown war. The Strait of Hormuz is effectively closed. Oil is above $115 a barrel. Gold hit $5,500+ in January before pulling back to $4,567 today. And BTC? BTC just sat there. Then drifted lower. Digital gold? More like digital lead. I hate saying it because I'm still long term bullish, but we need to have an honest conversation about what happened here.

The geopolitical situation has escalated way beyond what anyone expected. Supreme Leader of Iran, Ali Khamenei, was killed in the initial strikes on February 28th. Iran has retaliated with hundreds of missiles and drones hitting Israel, US bases across the Gulf, and even reaching places like Dubai. The Pentagon just deployed 3,500 Marines on the USS Tripoli. There's talk of seizing Kharg Island, which handles 90% of Iran's oil exports. Trump is saying Iran has agreed to “most of” his 15-point demand list and that a deal is close, but Iran is calling the demands “largely excessive, unrealistic, and unreasonable.” The war is spreading to Lebanon, which is covered less by the media. Many innocent people have been killed. This is not a drill and honestly, it’s quite sad.

I said last time that I can't fix the war, but we can trade around it. That's still true. I also said that if BTC fails to push to new heights during this kind of chaos, the experiment has failed. I'm not ready to call the whole experiment dead, but the safe haven narrative took a massive hit this month and the data backs it up.

Let's talk vol.

BTC term structure is sitting remarkably flat around 49-51% across the board. 1W ATM at 51.26% is actually down from 54.30% when I last wrote. 1M at 50.08% is roughly flat from 49.33%. The term structure is showing a very slight smile. 1W and 6M slightly elevated over the belly at 3M (48.86%). Nothing dramatic. The market is not pricing in a vol event for BTC, which tells you everything you need to know about sentiment. Nobody thinks BTC is going anywhere.

ETH is a completely different story. ATM vol is running a massive 20 vol premium to BTC across the entire term structure. ETH 1M at 70.86% versus BTC 1M at 50.08%. That gap actually widened since the last newsletter. ETH 1M was 67.35% before and is now 70.86%, while BTC 1M barely moved. The market sees significantly more idiosyncratic risk in ETH. Whether that's the Layer 2 cannibalization narrative, the Foundation drama, thinner liquidity, or just the fact that ETH has been an absolute dog this cycle, it's all priced into that 20 vol premium and then some.

The skew is where it gets really interesting. BTC 25 delta puts are bid 9.25 vols over calls at the 1M tenor. That means 25d put IV at 56.54% versus 25d call IV at 47.29%. The market is paying up aggressively for downside protection. It’s even worse on the front end. 1W skew is -10.75. Traders are buying crash insurance, not upside lottery tickets. ETH skew is actually less steep than BTC at -5.79 for 1M, which is somewhat counterintuitive, given the higher ATM level. The read here is that BTC holders are more nervous about a specific downside catalyst than ETH holders are, probably because BTC is the one that's supposed to be holding up and isn't.

For the vol traders out there, the combination of flat term structure, steep put skew, and compressed realized vol creates some interesting setups. If you think the Iran situation resolves and Hormuz reopens, selling front-end put skew against longer-dated longs is the play. You're collecting that -10.75 skew at 1W while staying long vega further out. If you think this drags on or escalates, buying 25d put spreads in BTC is relatively cheap given how compressed the belly of the term structure has gotten relative to the wings. If this global situation unwinds for the better, it will be fast. NFA.

Crude is the real story right now and it's bleeding into everything. Brent at $115, WTI above $101. This month's 51% surge is the largest monthly gain on record, beating the Gulf War spike in 1990. Goldman has a $14-18/bbl geopolitical risk premium baked in and says if Hormuz stays closed, we could blow past the 2008 all-time high of $147. Iran has been running a yuan-based toll system for passage through the strait. Let that sink in. Gas in California is approaching $9 a gallon. Australia just made public transport free in two states, because people can't afford to drive. If this continues, it’s going to get quite bad for the average Joe.

Gold corrected hard this month: down about 15% from the January highs near $5,500 to around $4,567 today. The Fed signaling only one rate cut in 2026 crushed the gold rally. Higher real yields, stronger dollar, and forced selling to cover margin calls in other assets. But even with that correction, gold still did exactly what BTC was supposed to do earlier this year: It front-ran the conflict. It rallied when uncertainty spiked. It acted like a safe haven. BTC didn't.

BTC sitting at $67,473 is down roughly 46% from the ATH of $126k set in October 2025. Only 57% of supply is in profit, a level historically associated with early bear markets. ETF flows flipped negative with $171 million in outflows on March 26th alone, reversing the $2 billion inflow momentum from earlier in the month. If you're here for the long run, I would probably set your spot bids lower and come back when the spotlight returns. We're still being outshined by AI and now we're being outshined by crude oil too.

Emerging markets continue to be the play. I told you about EWZ last time when it was up 22% YTD. It's now up 15.5% YTD after some pullback, but still up 48% over the last year. Petrobras (PETR4) and Rio's own Prio (PRIO3) is printing money with oil above $100. Brazil's Selic rate at 15% is attracting foreign capital. Druckenmiller is publicly building positions in Brazilian equities. When billionaires start moving into your trade, you know you're onto something. The US markets are still there and the S&P is at 6,381 with the VIX above 30, but the rest of the world isn't sitting around waiting for Washington to figure itself out. When the US is in chaos, the world looks eslewhere.

Equity perps on crypto platforms are getting more liquid by the week. The Iran crisis actually accelerated institutional adoption of 24/7 equity trading, because people got caught offsides on weekend gaps they couldn't hedge. Once traditional equity markets go 24 hours (and it's coming), the lines between crypto infrastructure and TradFi will blur completely. Something worth keeping an eye on as that infrastructure builds out.

AI is still in every conversation. Retail is spinning up agents with zero guardrails and getting wrecked. The infrastructure buildout is real, but the revenue to justify it is still a question mark. Sound familiar? We said the same thing about crypto in 2017. Some of those bets paid off enormously. Most didn't. The future of war is clearly becoming more autonomous and we're watching that play out in real time right now. I'm not sure how I feel about that.

April is going to be absolutely wild. Here's what's on the calendar that could move everything.

One more thing worth watching: The SEC and CFTC just signed a crypto coordination pact and the CLARITY Act is still potentially in play. Any regulatory green light can add fuel. The market loves certainty even more than it loves rate cuts.

Day 31 of the US-Israel war with Iran. Oil above $115. Gold correcting, but still up massively YoY. BTC flat to lower, failing the digital gold test in real time. The vol surface tells the story: flat term structure, steep put skew, ETH running a 20 vol premium to BTC, and nobody positioning for upside. The options market is bearish and the flow backs it up.

But here's the thing. April 6th is 7 days away. Trump says a deal is close. If Hormuz reopens and the war winds down, everything changes overnight. That's the binary setup right now. You could see a 20% move in either direction and both would make perfect sense. This is a trader's market. Don't get married to a direction. Watch the headlines, watch the skew, and keep your risk tight. The next week might be the most important week for macro markets since 2008.

What did Trump say? “Don’t be a Panican.” Let’s see if he stands on BIDness.

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Kyan Code: Special-7ftv9x-arb

Vol data from Block Scholes: https://www.blockscholes.com

Charts from Velo Data: https://velodata.app/

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