Crypto holds up so far despite ongoing Middle East conflict

Despite escalating geopolitical tensions, crypto-asset spot prices have shown a sustained recovery in sentiment, with BTC briefly breaching $74K and  ETH flirting with $2,200. 

Overcoming a brief wick below $63K and $1,800 following the initial strikes ...

BTC and ETH spot prices have respectively shown significant resilience, amidst the worsened macro and geopolitical backdrop.

Demand for optionality ticked up following President Trump’s weekend announcement that the US had launched airstrikes against Iran, with the latter then retaliating across the Gulf region – which moderately inverted the term structure of volatility, though absolute implied volatility levels remain far lower than their highs in early February. Relative to delivered volatility, implied volatility is also trading lower, and the skew towards OTM puts is no longer as strong as it was.