Bybit Report Bitcoin Surges 11% Ethereum 6% on US-Vietnam Trade Deal

Bybit, the world’s second-largest cryptocurrency exchange by trading volume, has released its latest crypto derivatives analytics report with Block Scholes, highlighting significant movements in the crypto markets last week. The report noted that the market experienced a breakout moment on July 2, driven by a tariff truce between the U.S. and Vietnam. This event led to a surge in Bitcoin (BTC) prices, which climbed above the $110,000 threshold, while Ethereum (ETH) pushed past $2,500. This price action resulted in heightened short-term volatility expectations, with BTC’s weekly implied volatility briefly surging.

The derivatives landscape revealed several interesting anomalies. Despite recent ETF launch approvals, SOL perpetual funding rates remained unexpectedly negative. Additionally, ETH options maintained roughly double the implied volatility levels of BTC equivalents throughout both the upward move and any retracements. This dynamic suggests a higher level of market optimism and risk appetite for ETH compared to BTC.

Key insights from the report include the unusual quiet period in BTC options markets, where 7-day implied volatility dropped to just 26% on June 27 – the lowest level since mid-2023 at the $30,000 mark. This breakdown below typical support levels was quickly reversed by the rally on July 2, which pushed volatility back up to 35% amid broader market optimism following the US-Vietnam trade agreement. ETH significantly outperformed BTC during the July 1-2 period, climbing from $2,400 to over $2,500 before surging another 6% on trade deal news. This price action drove ETH’s 7-day at-the-money implied volatility up by a 10-point daily increase. Throughout this period, ETH options consistently maintained roughly double the implied volatility of comparable BTC.

The volatility term structure for ETH and BTC remained relatively balanced through most of the week due to limited price movement. ETH displayed a more dramatic shift than BTC, with 7-day options now pricing in a 1.3% premium for out-of-the-money calls, completely reversing from the previous day’s -1.9% put skew. This shift indicates a bullish sentiment towards ETH, with investors expecting further price appreciation.

The recent developments in the cryptocurrency space have been marked by significant institutional interest, particularly in Ethereum. On July 3, U.S. Spot Ethereum ETFs recorded a combined net inflow of $148.21 million, highlighting a growing institutional appetite for Ethereum and signaling a pivotal moment for the cryptocurrency market. Major asset managers like BlackRock and Fidelity played a significant role in these inflows, with BlackRock's ETHA garnering $85.01 million and Fidelity's FETH securing $64.65 million. These figures indicate a strong institutional conviction in Ethereum’s long-term value proposition and its role in the decentralized finance (DeFi) ecosystem. The competition among major players is driving innovation and offering investors more diverse options.

Grayscale's ETHE experienced a net outflow of $5.35 million, while their mini ETH saw a positive inflow of $3.9 million. This dynamic reflects a natural part of market maturation as capital seeks the most efficient and attractive investment vehicles. The consistent flow of capital into Spot Ethereum ETFs has profound implications for Ethereum’s price and the broader crypto market. Sustained inflows can act as a significant tailwind, increasing demand for the underlying asset and potentially pushing prices higher. This mirrors the impact seen with Bitcoin ETFs, which contributed to Bitcoin’s rally post-launch.

Beyond price, these inflows signal a broader shift in market sentiment, representing a growing acceptance of cryptocurrencies as legitimate investment assets. This institutional embrace could unlock a new wave of capital, not just for Ethereum but for the entire digital asset ecosystem. It validates the foundational technology and the utility of smart contract platforms like Ethereum, paving the way for more widespread adoption and innovation in DeFi, NFTs, and Web3.

While the outlook is overwhelmingly positive, potential challenges remain. Market volatility and regulatory scrutiny could still present hurdles for future product launches or expansions. Furthermore, competition among ETF providers will intensify, potentially leading to fee wars that could impact profitability for asset managers but benefit investors. Looking ahead, the success of Spot Ethereum ETFs could pave the way for similar products for other major altcoins, further diversifying the institutional crypto investment landscape. The sustained growth in ETH inflows is a strong indicator that institutional capital is here to stay, cementing Ethereum’s position as a cornerstone of the digital economy. This trend suggests a future where digital assets are seamlessly integrated into traditional financial portfolios, offering new avenues for wealth creation and technological advancement.