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BTC ATM IV

ETH ATM IV

BTC at $77,751, ETH at $2,313. Two weeks ago we were at $71k and I told you bears make for good engagement, but bulls make money. BTC is up another 9.4% since then. ETH up 5.5%. The S&P 500 hit a new all time high on Friday at 7,165. The Nasdaq is at all time highs. The VIX is at 18.71. And someone tried to kill Donald Trump Saturday night. Just another week in 2026… insane, really.

Let's start there, because it happened 48 hours ago, over the weekend, and nobody is really processing it yet. A gunman tried to storm the White House Correspondents' Dinner on Saturday night while Trump, JD Vance, Kash Patel, journalists and officials were inside. Secret Service subdued him at the security checkpoint. One officer took a round to his vest, expected to fully recover. Trump was evacuated, held a press conference at the White House, called for unity… and then used it to promote the new ballroom he's building. The man is nothing if not consistent.

This is the third assassination attempt on Trump in less than two years. Butler, Florida, and now Washington. The suspect is a 31-year-old mechanical engineer from Torrance, California, who traveled by train through Chicago and wrote a manifesto calling himself the “Friendly Federal Assassin.” His sister had called the police minutes before the incident to warn them. The political violence in the US is escalating and I don't think people are fully grasping what that means for markets long term. When you can't keep the president safe at a media dinner, something is fundamentally broken.

Markets don't seem to care. Yet. Futures are flat to slightly positive this morning. The market has been conditioned to shake off assassination attempts after Butler in July 2024 barely caused a blip, but I'd keep an eye on this. If it triggers a security crackdown, executive orders, or any kind of emergency declaration, that reprices everything. For now, the market is focused on two things: Iran and the Fed.

Here's the thing about Iran. A deal might actually be coming. Today, literally as I'm writing this, Iran offered to reopen the Strait of Hormuz, if the US lifts its blockade and ends the war, with nuclear talks pushed to a later phase. Trump reportedly said Iran sent a “much better” proposal over the weekend after he canceled the envoy trip to Pakistan. The ceasefire from April 7th has been extended indefinitely. Brent is at $108, down from the $115+ peak we talked about in the last two newsletters. WTI is at $96. The oil market is pricing in resolution. Not certainty, but probability.

Look at what the Strait of Strait of Hormuz situation has become. Iran is running a selective passage system, letting Chinese, Russian, Indian, Pakistani, Malaysian, Thai, and Filipino vessels through while blocking everything else. The United States Navy is running a counter-blockade on Iranian ports. It’s a dual blockade, and it’s wild. The International Energy Agency called it “the largest supply disruption in the history of the global oil market.” Some 14.5 million barrels per day of Persian Gulf production are offline. Global inventories are drawing at 11-12 million barrels a day, which Goldman Sachs says is unsustainable. Something has to give: either a deal happens and oil collapses to $80-90, or this drags on and we test $147. The binary nature of this trade hasn’t changed, it’s just gotten closer to resolution.

And through all of this chaos, BTC pumped from $67,000 in newsletter #65 to $71,000 in #66 and $77,000 today. That's a 15% move in a month. Not bad for digital lead. Something to watch out for, a big 60k 26 JUN put traded 1,800 contracts.

Let's talk vol, because the surface is telling a completely different story than it was two weeks ago.

BTC vol got absolutely demolished. 1W ATM dropped from 43.13% in #66 to 37.12% today. That's a 6 vol drop on the front end. 1M went from 43.23% to 38.26%. 3M from 43.84% to 40.32%. The entire term structure has shifted lower and is now in mild contango 1W at 37.12% rising to 6M at 42.16%. This is the first time we've seen a properly upward sloping term structure since before the war started. Translation: the market is no longer pricing in near term tail risk. The panic is completely gone from the front end. Realized vol is probably running below implied right now, which means vol sellers are getting paid.

ETH vol also compressed, but the premium persists. ETH 1W dropped from 61.97% to 51.98%, and 1M from 64.02% to 57.05%. The ETH/BTC vol premium has narrowed slightly (from ~21 vols to ~19 vols across the curve), but it’s still massive. ETH 1M at 57.05% versus Bitcoin 1M at 38.26% is a 19-vol gap. The market still sees significantly more risk in ETH. Pectra upgrade noise, Foundation governance, L2 cannibalization—pick your narrative. It’s all in the vol.

Skew has normalized dramatically. This is the biggest change since the last newsletter. BTC 1W skew went from 5.90 to 2.09, and 1M skew from around 5.06 to 3.46. Two newsletters ago, in #65, BTC 1W skew was 10.75. We’ve gone from extreme put premium to near-neutral in a month. The crash-insurance trade is over. Traders have stopped paying up for puts, and skew is approaching fair value. ETH skew has normalized even more: 1W at 2.42, 1M at 3.44. There’s almost no put premium left in ETH. That’s remarkable given how much idiosyncratic risk the market still sees in ETH, based on ATM levels.

For vol traders, the setup has completely flipped from where it was in #65 and #66. Back then, I said selling front-end put skew against longer-dated longs was the play if you thought resolution was coming. That trade worked beautifully: front-end vol crushed 14 points, from 51% to 37%, while skew normalized from 10.75 to 2.09. If you were running that, congrats. The question now is: what’s next? With the term structure back in contango and skew near neutral, the easy money in vol compression is gone. From here, you’re looking at:

The Federal Open Market Committee meeting is this week, April 28-29. Everyone expects a hold at 3.50-3.75%, and they’re right. CME Group has it at a 94.8% probability. This is Jerome Powell’s second-to-last (or maybe last) meeting as chair before Kevin Warsh presumably takes over. The war complicates everything for the Federal Reserve. Oil at $96-108 is adding an estimated 0.8 percentage points to headline CPI. GDP forecasts have been revised down to 0.9% for 2026. They’re stuck between inflation from the oil shock and slowing growth. The dot plot says one cut in 2026. The market says maybe December. Nobody is trading Fed expectations right now, they’re trading Iran.

AI continues to eat the world and dominate the conversation. Microsoft just announced it’s ending its exclusive partnership with OpenAI. That’s massive. The entire AI landscape is shifting from exclusive deals to open competition. Meanwhile, the S&P 500 hit all-time highs, driven largely by tech, with the Nasdaq Composite up 1.63% on Friday alone. Intel jumped 23% on earnings. The AI infrastructure buildout is real, and it’s showing up in numbers, not just hype. We may be in a bubble, but the bubble is still growing.

I always like to leave readers with something to think about, and since most of you are traders, here’s some actual alpha buried in this long-form ramble. None of this is financial advice.

The BTC vol compression trade played out perfectly: from 51.26% to 37.12% on 1W ATM in a month, and from 10.75 to 2.09 on skew. If you were positioned for this, you crushed it. The question now is whether we’re setting up for a vol expansion event or continued compression. The Iran deal is the catalyst. If Strait of Hormuz reopens, vol compresses further toward 30-35%, and BTC probably tests $85k. If talks collapse and the blockade intensifies, vol spikes back above 50%, and we give back the rally. Position sizing matters here more than direction.

The S&P 500 at all-time highs is the tell. The equity market has decided the war doesn’t matter anymore, or at least that it’s priced in. When equities are making new highs with oil at $96, the CBOE Volatility Index at 18.71, and a president who just survived an assassination attempt, that’s a market that wants to go higher. Risk-on is back. And when risk-on is back, BTC tends to outperform.

iShares MSCI Brazil ETF pulled back, but the thesis holds. Brazil is still printing. Selic at 15% is a magnet for carry-trade capital. Petrobras is still a cash machine at these oil prices. Emerging markets aren’t going anywhere.

FOMC April 28-29. Expected hold. Watch Powell's language on oil-driven inflation versus growth. If he leans dovish, BTC gets a bid. If he leans hawkish because of energy prices, risk assets give back gains.

Iran's Hormuz Proposal. The offer is on the table as of today: Hormuz reopening in exchange for lifting the US blockade. Trump called it a “much better” proposal. If this develops into actual negotiations this week, oil dumps and crypto rips. Keep your notifications on.

Warsh Confirmation. Kevin Warsh's Fed Chair confirmation hearing has been floated for mid-May. The transition from Powell to Warsh in the middle of a war-driven energy crisis is a wild card nobody is pricing.

Post Assassination Attempt Fallout. Watch for executive orders, security declarations, or policy shifts. Trump has already used it to promote his White House ballroom project. But if this triggers anything broader (emergency powers, media restrictions, security spending), that could move markets.

Goldman's Updated Oil Call. Released today: Brent expected to average $90 in Q4, up from $80 previously. If the war drags on, $147+ is still on the table. If resolved, sub-$80 by year-end.

BTC at $77,751. Up 15% in a month. Vol crushed from 51% to 37%. Skew normalized from 10.75 to 2.09. The S&P 500 is at all-time highs. The CBOE Volatility Index is below 19. The ceasefire is holding. Iran just proposed reopening Strait of Hormuz. And someone tried to kill the president at a media dinner.

None of this is normal. All of it is tradeable.

Two newsletters ago, I said BTC was failing the digital gold test. One newsletter ago, I said bears make for good engagement, but bulls make money. Today, I’m saying the vol surface has completely flipped, the market is risk-on, and the next move depends entirely on whether the Iran deal materializes. If it does, I’d expect $85k+ in May. If it doesn’t, it’s back to $70k, with vol spiking back above 50%.

Something to remember: those 60k puts traded, people are still protecting downside risk. And this is crypto, the last free market. We move first, and we move the most. Don’t get caught offside. And as always, none of this is financial advice.

The easy money in the vol compression trade is gone. The next phase is about direction, not vol. Pick your side, size accordingly, and don’t get married to it.

That’s all for this one. Stay safe out there, apparently even at dinner parties now. Keep your head on a swivel, and as always… stay pimpin’.

Notes: Email sign ups get the newsletter 20ish minutes before. Kyan is live on Arbitrum Mainnet. Options, perps, portfolio margin, combo trades, and liquidity are available!

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

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

Twitter: https://twitter.com/VeloData?s=20

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