Bitcoin and S&P 500 fear gauges surge by 10%, reflecting risk aversion
Implied volatility indexes, often referred to as fear gauges, for both bitcoin (BTC) and the S&P 500 spiked sharply on Monday as concerns over technology stocks weighed on global markets. Bitcoin's 30-day implied volatility index (BVIV) jumped nearly 10% to 46.5%, according to data from Volmex. The index, which tends to move inversely to bitcoin's spot price, reflects growing demand for options protection. Meanwhile, the VIX, the S&P 500's 30-day implied volatility gauge, surged 16.5% to 20.0, its highest level in recent weeks. These moves indicate increased demand for options to hedge against further downside. Global equities came under pressure, with Nasdaq futures down around 3% in early trading, while South Korea's Kospi index plunged as much as 10%, hammered by sharp losses in memory-chip shares. The synchronized rise in volatility across traditional and crypto markets underscores a broad risk-off sentiment, with investors bracing for continued turbulence in tech-heavy sectors.
The VIX is often called the "fear index" because it measures the market's expectation of volatility over the next 30 days. A reading above 20 is considered elevated, signaling heightened anxiety among equity investors. Similarly, bitcoin's BVIV captures the cost of options protection in the crypto space. Historically, spikes in both indexes have preceded periods of sharp sell-offs. For example, during the March 2020 crash, the VIX briefly topped 80, while the BVIV surged past 100. While current levels are far lower, the simultaneous rise suggests that investors are preparing for potential downside risk in both asset classes. The trigger appears to be renewed selling in large-cap technology stocks, which have led the broader market for years. Names like Apple, Microsoft, and Google have seen declines, dragging down index futures.
Adding to the cautious tone, Bank of America released a research note on Monday revising its forecast for the Federal Reserve. The bank now expects three 25-basis-point rate hikes by the end of 2026—in September, October, and December—which would lift the Federal Funds rate to a range of 4.25% to 4.5%. The revision stems from stronger-than-expected economic data and what analysts described as a more hawkish Fed "reaction function." Bank of America noted that core personal consumption expenditures (PCE), the Fed's preferred inflation gauge, could reach 3.5% in May, about 70 basis points above its level a year earlier. Policymakers seem increasingly concerned that inflation pressures are becoming more persistent. The bank also expects the Fed to keep rates unchanged through 2027, arguing that inflation is likely to remain sticky and prevent real interest rates from becoming overly restrictive. This hawkish outlook has strengthened the U.S. dollar, with the Dollar Index (DXY) climbing above 101, and pushed the 10-year Treasury yield back above 4.5%. A stronger dollar typically weighs on risk assets like bitcoin and gold, as it reduces liquidity and makes dollar-denominated investments more attractive.
SpaceX drops another 16.5%, closing in on return to IPO price
Losses for Elon Musk's SpaceX (SPCX) accelerated into the close on Monday, with the stock shedding another 16.5% to $154.60. SpaceX went public 10 days ago at $135 and quickly ran higher to as much as $225 in subsequent sessions. However, it has been straight down since, with even today's news of a multi-billion dollar deal to provide computing resources to AI startup Reflection AI failing to stem the decline. The Nasdaq closed near its session low, down 1.3%, while the S&P 500 lost just 0.35% and the DJIA actually gained 0.3%. SpaceX's sharp reversal has drawn comparisons to other high-profile stocks that surged after their IPOs only to face profit-taking and valuation concerns. The company, which dominates the space launch market with its reusable Falcon rockets and Starship program, had been valued at over $200 billion in private markets before going public. Public investors initially drove the price higher, but doubts about the company's ability to sustain its growth trajectory amid increasing competition from Blue Origin and other players may be weighing on sentiment. The stock is now only about 14% above its IPO price, raising questions about whether it will hold above that level.
Franklin Templeton launches crypto division after closing 250 Digital acquisition
Franklin Templeton on Monday completed its acquisition of crypto investment firm 250 Digital and formally launched Franklin Crypto, a new division focused on active digital asset management for institutional investors. Christopher Perkins, co-founder of 250 Digital, will lead Franklin Crypto as head of the division. Seth Ginns will serve as chief investment officer alongside Franklin Templeton digital assets executive Tony Pecore. The group will report to Sandy Kaul, the firm's head of innovation. Franklin Crypto will offer actively managed cryptocurrency investment strategies through Franklin Templeton's global distribution network. The launch builds on Franklin Templeton's existing digital asset business, which includes research, portfolio management, and institutional risk oversight capabilities. This move reflects a growing trend among traditional asset managers to expand into digital assets. Other firms like BlackRock, Fidelity, and Invesco have also launched crypto-related products, including spot bitcoin ETFs. However, Franklin Templeton's approach is more hands-on, offering active management rather than passive index tracking. The acquisition of 250 Digital, a firm known for its quantitative strategies, gives Franklin access to sophisticated trading and risk management tools. Institutional interest in crypto has remained strong despite the market's recent volatility, as many see digital assets as a long-term diversification tool.
'Steady lads?' Strategy's CEO just bought $1 million of STRC
"I bought $1 million of STRC today," said Strategy CEO Phong Le on X earlier on Monday. "Will hold it until it reaches par, likely longer." A cynic might call the second part of that post curious. If Le truly believes in STRC, why would he suggest he's just buying it for a trade instead of collecting the tax-deferred 11.5% (or higher) yield in perpetuity? A bigger cynic might note that Le's post sounds similar to Do Kwon's infamous May 2022 Twitter post written days before TerraUSD's ultimate collapse: "Deploying more capital — steady lads." STRC ended the day up 1.2% to $89.68. STRC is Strategy's high-yield preferred stock, which pays a dividend of around 11.5%. It has been under pressure recently, falling as low as $82.53 on Thursday before rebounding. The stock's yield is attractive to income-seeking investors, but the recent drop suggests concerns about the company's ability to maintain the dividend amid its aggressive bitcoin buying and rising interest rates. Strategy (formerly MicroStrategy) has been the largest corporate holder of bitcoin, with the latest purchase adding 520 BTC for $35 million, taking total holdings to 847,363 BTC. The company also raised its cash reserve to $1.4 billion, which backs the dividends on STRC. CEO Phong Le's personal purchase is an attempt to signal confidence, but the market remains skeptical.
Crypto shares give up gains, turn lower alongside Nasdaq and bitcoin
Monday morning's early rally faded as bitcoin (BTC) headed back to the $64,000 area and the Nasdaq slipped to a session low, down 1.2%. Google, Amazon, Microsoft, Broadcom, and Oracle were leading the Nasdaq lower, though some AI favorites like Intel, Micron, and AMD held onto gains. Up sizably early in the day, Strategy (MSTR) ended lower by 2.7%, while Coinbase (COIN) returned to flat after also being up big. Circle (CRCL) and Galaxy Digital also turned lower. Among those holding gains were Bullish (BLSH) and MARA Holdings (MARA). The reversal in crypto shares reflects the broader market's risk-off mood. Despite early optimism driven by a Micron-Anthropic partnership that boosted AI infrastructure stocks, the selling pressure from tech giants proved too strong. The correlation between bitcoin and the Nasdaq has remained elevated, with both assets sensitive to changes in interest rate expectations. The hawkish Fed outlook has particularly hurt high-growth and speculative assets.
U.S. Dollar strength pressures bitcoin as yields rise and risk assets retreat
The U.S. Dollar Index (DXY) climbed above 101 on Monday, pressuring risk assets across markets. The move higher in the dollar was accompanied by a 1.2% rise in the U.S. 10-year Treasury yield, pushing it back above 4.5%. Bitcoin briefly traded above $65,500 early in U.S. hours before retreating to around $64,700. Strategy (MSTR) fell more than 7% intraday, after reaching a session high of $120 before dropping to $111. Earlier, the company announced the purchase of an additional 520 BTC and increased its cash reserves by $300 million, bringing total U.S. dollar holdings to $1.4 billion. Gold fell over 1% below $4,200, Brent crude dropped 2.5% below $74 per barrel, while the Nasdaq 100 and S&P 500 both slipped modestly into negative territory. The strength in the dollar has been a persistent headwind for bitcoin, which is priced in dollars and tends to fall when the greenback appreciates. Higher yields also make traditional fixed-income assets more attractive, drawing capital away from riskier investments. The combination of a strong dollar and rising yields has kept bitcoin trapped in a range roughly between $60,000 and $67,000 for weeks.
Micron-Anthropic deal sparks broader AI infrastructure rally
Micron Technology (MU) and Anthropic announced a strategic partnership aimed at advancing next-generation AI infrastructure. The collaboration includes joint development of AI memory and storage architectures, a multi-year supply agreement, and enterprise deployment of Anthropic's Claude models. MU shares soared to a new record high above $1,200 on the news, before pulling back to $1,188, still higher by 4.8% for the day. The partnership fueled gains across AI infrastructure and data center plays, with WhiteFiber (WYFI) up 13%, KEEL Holdings (KEEL) gaining 14%, and Hive Digital (HIVE) jumping 23%. Micron is one of the world's largest memory chip makers, and its collaboration with Anthropic signals growing demand for specialized hardware to run large language models. Anthropic, an AI safety startup, has been competing with OpenAI in developing advanced AI systems. The deal underscores the broader trend of technology companies investing heavily in AI infrastructure, which has provided a bright spot amid the market's otherwise cautious tone.
Strategy raises its cash reserve to $1.4 billion and buys 520 more bitcoin
Strategy (MSTR) lifted its USD reserve by $300 million to $1.4 billion and bought another 520 bitcoin for $35 million, taking its holdings to 847,363 BTC, the company said in a Monday filing. The cash reserve, which backs the dividends on the preferred shares it markets as Digital Credit, has now grown by $400 million in two weeks while the bitcoin stack barely moved. Strategy said it will keep replenishing the reserve to support the credit quality of those securities, consistent with recent weeks when it funded both the cash cushion and its bitcoin buying through stock sales. The company's strategy of issuing equity and debt to buy bitcoin has been controversial but has attracted a dedicated following of investors who view it as a proxy for bitcoin exposure. However, the premium of MSTR over its net asset value has shrunk as bitcoin's price has stagnated. The addition of cash reserves may help reassure preferred shareholders that dividends will be paid, but it also reflects the difficulty of generating returns from bitcoin alone in a sideways market.
Robinhood raises $2 billion through convertible notes
Robinhood (HOOD) announced plans to raise $2 billion through a private offering of convertible senior notes due 2029, with an option for investors to purchase an additional $200 million. The company said the capital raise is intended to enhance strategic flexibility and support future growth initiatives. Approximately $300 million of the proceeds will be used for share repurchases, while part of the funds will finance capped call transactions designed to limit shareholder dilution up to a targeted 125% premium to the stock's pricing date. Following the announcement, Robinhood shares fell roughly 2% in premarket trading. The convertible note offering is a common way for growth companies to raise capital without immediately diluting existing shareholders, as the notes can be converted into stock at a later date. Robinhood has been expanding its crypto offerings and recently launched a new wallet for self-custody of digital assets. The capital raise will provide a buffer to fund further expansion and innovation.
Bank of England drops stablecoin holding limits, sets £40 billion cap
The Bank of England scrapped plans to limit how much stablecoin consumers and businesses can hold, replacing the proposal with a temporary £40 billion ($50.6 billion) cap on the total issuance of any single systemic stablecoin. The move follows criticism from lawmakers and the crypto industry, which argued the restrictions would hurt innovation and competitiveness. The central bank also eased reserve requirements, allowing issuers to hold up to 70% of backing assets in short-term U.K. government debt. While interest payments to stablecoin holders remain banned, transaction-based rewards will be allowed. The framework is expected to support a regulated stablecoin launch in 2027. Stablecoins are digital tokens pegged to a fiat currency, typically the U.S. dollar, and are widely used in crypto trading and decentralized finance. The Bank of England's approach reflects a desire to foster innovation while maintaining financial stability. The removal of consumer holding limits is a significant concession to the industry, as it allows for broader adoption. However, the cap on total issuance could limit the growth of any single stablecoin, encouraging diversity in the market.
Bitcoin options expiry worth $10.5 billion looms
About $10.5 billion in bitcoin options are set to expire for June on Friday on Deribit, making it one of the largest expiries of the year. Bitcoin is currently trading around $64,000, while the options market's max pain price sits at $72,000—the level at which option holders would experience the greatest aggregate losses at expiry. Market positioning remains relatively balanced, with a put-to-call ratio of 0.83, indicating slightly stronger bullish sentiment. The largest concentration of put open interest is at the $60,000 strike, suggesting a key downside support level, while the highest call open interest is clustered at $80,000, highlighting a major upside target for traders. Options expiries often lead to increased volatility as traders roll positions or adjust hedges. The large notional value of this expiry could amplify price moves in either direction. The max pain level of $72,000 is significantly above the current spot price, implying that options sellers may try to push the price higher toward that level to minimize their payouts. However, given the bearish macro environment, such a rally seems unlikely without a catalyst.
UK markets show limited reaction to Kier Starmer's resignation
U.K. Prime Minister Keir Starmer announced he will step down, paving the way for Britain's sixth leader in seven years, with a successor expected to be in place before Parliament returns in September. Markets appear to have largely priced in the political transition, with GBP/USD slipping just 0.15% to $1.32 and the 10-year gilt yield edging up to 4.85%. Political instability in the UK has become somewhat routine in recent years, and investors have become accustomed to changes in leadership. The new prime minister is expected to come from the Labour Party, but the exact direction of policy remains uncertain. The market's muted reaction suggests that economic fundamentals, such as inflation and growth prospects, are more important than political changes at this point.
A weekend trade betting on a HYPE rally to $150
Onchain options platform Derive saw a massive "bull call spread" in HYPE over the weekend, signaling expectations of a rally to $150 by year-end. A trader moved 50,000 contracts targeting the December 2026 expiry by buying the $100 strike call while simultaneously selling (writing) calls at the $150 strike. The so-called bull call spread is essentially a bet that HYPE is headed higher, with a specific "ceiling" of $150 in mind. The trader wants the asset to settle well above $100 but ideally stay just under the $150 mark. This multi-leg strategy is a classic way to reduce the cost of a bullish bet while still capturing a significant move higher. "Combined, the two legs form a bull call spread, reflecting a view that HYPE settles above $100 but below $150 by expiry," data tracking platform Laevitas noted. As of this writing, HYPE changed hands at $67, so a move to $150 would represent a more than doubling in price. Such a bet suggests that some traders see strong fundamentals or upcoming catalysts for HYPE.
Bitcoin is stuck near $64,000 as ETF outflows reach a sixth week
Bitcoin is trading around $64,000, still searching for a catalyst strong enough to break the range it has held for weeks. Selling from spot bitcoin ETFs has eased from earlier this month, but fresh institutional demand has yet to return. U.S. spot bitcoin ETFs have now posted a sixth straight week of net outflows, data shows, with only a sparse few days of green. The scale has narrowed, but the absence of any sustained inflow shows institutions remain defensive as markets reassess the Federal Reserve's interest-rate path. A bigger weight is the rebounding dollar. After the June meeting, the Fed's cautious message weakened expectations for near-term rate cuts, lifting the Dollar Index to the 100.6-100.8 area while keeping Treasury yields high. With liquidity still tight, capital favors assets with steadier yields over volatile ones like bitcoin. Easing geopolitical tension after the U.S.-Iran deal has improved risk appetite, a short-term support, but it has not been strong enough to offset the firmer dollar and the cautious flows. Bitcoin will likely hold a $60,000 to $67,000 range in the near term, according to market analysts. The market is "balanced between supportive and restrictive forces," with eased ETF selling and better sentiment on one side and an unsupportive Fed and unconfirmed institutional flows on the other. A sustainable recovery in the second half would need more time to accumulate, a return of ETF inflows, and stronger institutional demand. Until then, the current rebounds look technical rather than the start of a new uptrend.
Source: Coindesk News