Author: Imran Lakha
Translated by: Tim, PANews
Bitcoin Stabilizes: Benefiting from Capital Flows, Policy, and Macro Tailwinds
Bitcoin is once again approaching its all-time high, supported by returning investor attention and a favorable macro environment.
In April, spot Bitcoin ETFs attracted nearly $3 billion in net inflows, and from May to date, an additional $1.6 billion. CFTC data shows that leveraged funds have not significantly increased short positions, indicating that most capital flows are directional bets rather than arbitrage trades.
On the policy front, relevant developments are heating up. New Hampshire has become the first state to pass a strategic Bitcoin reserve law, with 19 other states considering similar bills. Meanwhile, Arizona is simultaneously advancing legislation in the areas of cryptocurrency custody and strategic reserves.
At the federal level, the Senate blocked the GENIUS Act, a stablecoin regulation bill, but the crypto market remains unfazed, with market risk appetite remaining solid.
The macro economy is also sending supportive signals. Trump's tariff policy revision is seen as a growth-promoting measure, boosting stocks and the US dollar while suppressing gold and the yen, and reducing recession probabilities. Market volatility has cooled, with the VIX index now falling back to its 12-month average level.
In short, Bitcoin is benefiting from three major factors: rising institutional demand, favorable policy environment, and warming macro landscape. In terms of position layout, investors are actively going long.
Bitcoin Hands Over Volatility Leadership to Ethereum
Bitcoin's realized volatility rebounded by about 8 percentage points and broke through the $100,000 mark again. Ethereum was even more eye-catching, with its realized volatility soaring to 90%, jumping 30% in just two days. Bitcoin's short-term implied volatility slightly decreased, while Ethereum's implied volatility spiked by 20 volatility points due to price volatility.
Bitcoin's holding cost returned to neutral, but Ethereum's holding cost turned deeply negative, with Gamma sellers suffering heavy losses.
Bitcoin's rally only broke through the implied high point once (at the $100,000 mark), while Ethereum achieved multiple upward breakthroughs. It seems Bitcoin has handed over momentum leadership to Ethereum, and whether this can continue remains to be seen.
Bitcoin Volatility Term Structure Flattens, Call Option Premium Reappears
As the market rebounds, the skew curve flattens, and call option premiums recover.
Bitcoin's volatility skew remains around 2-3 volatility points across the entire term structure, indicating the presence of bullish capital flows betting on price increases, but the implied volatility level remains relatively low.
Ethereum option volatility skew has shifted downward, showing a moderate bearish tendency (except for short-term contracts). If Ethereum can maintain its recent gains and effectively break through the $2,800 mark, the market may see a resurgence of sustained call option buying. At this stage, investors remain cautious.
In the long term, Ethereum still has gaps to bridge compared to Bitcoin.
Front-End Volatility Spread Expands Sharply
ETH/BTC surged 33% in the past week and is currently testing the key 0.025 downward trend resistance level. With Ethereum's extremely outstanding performance in realized volatility, its short-term volatility premium has soared to 35 volatility points.
Meanwhile, its long-end volatility spread remains around 15 volatility points, indicating little reaction, which supports the view that long-term VEGA (volatility risk exposure) may be suitable for selling at current levels.
Despite Ethereum's significant volatility, the volatility skew of short-term options has further tilted towards put option premiums. This suggests that the options market has not yet fully accepted this rally.
