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In less than a week, President Trump and his administration went from:
Meanwhile, the crypto industry also jumped a major regulatory hurdle earlier this week after the SEC, along with the CFTC, issued a joint interpretation guideline clearly defining how federal securities laws apply to crypto assets and crypto transactions.
Despite the regulatory advance, spot and options markets have largely continued to trade at the helms of geopolitical headlines.
Spot price has recovered in a V-shaped manner amidst the headlines, while options markets are slowly pricing out much of their bearish positioning.
If history is any guide, past escalations between the US and Iran have largely been faded by markets; with BTC’s median return 100 days after military conflicts against Iranian forces close to +26%.
Block Scholes’ Risk Appetite Index measures the level of euphoria (above 1) or panic (below -1) in the spot market. Momentum in this index shows a strong relationship to spot returns.
As the war enters its fourth week, it’s perhaps timely to revisit historical precedence that may offer some longer-term optimism for crypto traders.
The chart below compares BTC’s spot price 30 days before and 100 days after periods when the US undertook major hostile measures against Iran.
Key events, for example, include:
October 2023: US military’s airstrikes on facilities in Syria used by Iran’s Islamic Revolutionary Guard Corps (IRGC)
February 2024: US military’s airstrikes in Iraq and Syria against the IRGC
June 2025: "Operation Midnight Hammer” - most comparable to current war
In all three cases, BTC spot price traded higher 100 days after the attacks began.
Despite such episodes in recent years, of course, it must be stated that the current Middle East conflict is unprecedented in many ways.
What makes the current conflict unique is both its duration and the effective closure of the Strait of Hormuz – something never before implemented by Iran.
Nonetheless, across the three cases, BTC’s median return 100 days after the date that the escalations began was +26%.
So far, since President Trump’s Feb 28, 2026 announcement that the US had struck Iran, BTC is up 8%% at the time of writing, below the +16% median this many days into past escalations.
In BTC options markets, Trump’s apparent willingness to bring an end to the war has resulted in traders pricing out some of their expectations for volatility over the short-term.
The 7-day at-the-money implied volatility level has fallen from 60% to 50% and trades far lower than the early-February highs of 104%.
Additionally, as spot price hovers around $70K, much of the premium towards OTM put contracts across the volatility surface has eroded. 7-day put-call skew has risen from -11% to -4%.
As we have come to expect for most of this year, however, the small upwards repricing in spot price has not been enough to shift traders bullish yet, as both BTC and ETH options markets continue to assign volatility premiums for downside protection.