5th May 2025 > > Arizona, GENIUS, & a bet.

tl;dr

Arizona jettisons a golden opportunity because of one person’s prejudice. Some other prejudices on display are less likely to have an impact, as evidenced by the sizeable open interest on some June BTC OTM calls struck at $300k.

Market Snap

Market Wrap

On Wednesday we get the next instalment of the monthly charade during which the Fed will decide in which direction it wishes to manipulate the short end of the rates markets.

Curious Cryptos’ Commentary – Arizona

Very recently the Arizona legislature voted to add BTC to the state’s treasury reserve which is undoubtedly splendid news, except that Governor Katie Hobbs threatened to piss on the party:

https://www.curiouscryptos.com/post/29th-april-2025-price-predictions-arizona

What we can say about Hobbs is that she is true to her word:

Curious Cryptos’ Commentary – Hobbs is not the only one

The Genius Act (Guiding and Establishing National Innovation for US Stablecoins) holds the promise of being the first of many new pro-crypto initiatives to become law in the US. It has been through its committee stage with some amendments, and is due to be debated on the floor of the House next week and beyond. Pleasingly, it had attracted bi-partisan support. Less pleasingly, it had attracted bi-partisan support until now:

That’s a weaselly political statement that seems to imply the authors always intended to try to torpedo the act’s passing into law.

Curious Cryptos’ Commentary – Deribit

Here’s an interesting graphic:

The two most popular BTC call options on Deribit for June expiry are priced at $110k and … wait for it … $300k.

The $110k is not unreasonable – given BTC’s vol it isn’t far from the implied forward price. But what’s with the $300k price point? Students of derivatives markets know that for OTM (out of the money) puts and calls, though they might look superficially cheap, the volatility smile required by the failure of the Black-Scholes model to accurately predict OTM options prices using today’s implied vol means that they are relatively expensive.

Perhaps the potential announcement of a US federal level strategic BTC reserve – despite the twin stories above of entrenched, unenlightened opposition to the crypto revolution – is a likely driver of this horde of buyers of call options on BTC struck at $300k with just two months to go.

I know that we all fervently hope that this bet pays off for those who are showing the courage of their convictions.