On August 7, the U.S. Treasury Department announced the issuance of $58 billion in 3-year Treasury notes, with a winning yield of 3.810%, slightly below the pre-auction trading level of 3.812%. Except for the 2-year Treasury notes, benchmark yields rose slightly to mid-session highs. Yields are nearing the end of inversion, and the 10-year Treasury yield has erased the decline that occurred after the non-farm payroll data release last Friday, now standing at 3.908%.

In contrast, the Bank of Japan has reverted to a dovish stance. Deputy Governor Uchida Shinichi stated that there would be no rate hikes during periods of market instability, and certain factors have made the central bank more cautious about raising interest rates, putting pressure on the yen to fall.

Source: Investing U.S. 10-year Treasury yield; USD/JPY exchange rate

In the realm of digital currency, Ripple and the SEC reached a settlement, significantly reducing the fine from the SEC’s initial proposal of $2 billion to $1.25 billion. Following the announcement, market confidence surged, with XRP trading volume increasing by 254% to $5.3 billion, and its price rising by 20%.

Regarding BTC, after rebounding from $56,000 to $57,000 the day before yesterday, the convergence of actual volatility led to a brief bear steepening in implied volatility (IV). However, the price did not maintain its peak for long, and a new downward trend began after 10 PM, finding support around $54,800. The price rallied again with the start of the Asian session, recovering all lost ground, accompanied by a significant increase in daily volatility and an overall rise in implied volatility.

Source: TradingView

The continuous rise in the implied volatility of further expiration dated BTC needs more attention due to uncertainties brought on by the U.S. presidential election and the subsequent Federal Reserve’s interest rate hike path. Both factors have led the market to increase its bets. Compared to the trend of ETH, this change is noticeably distinct. Yesterday’s volatility resulted in a significant flattening of ETH IV, with the front end, like 1-week to 1-month, increasing by about 4.5%, while the distant end, such as December, only moved by 0.94% (compared to 3.07% for BTC). On the other hand, a further decline in coin prices has led to increased demand for put options, with a comprehensive decline in the volatility skew for both coins.

Source: Deribit （As of 8AUG 8:00 UTC）

Source: SignalPlus

Source: SignalPlus, Vol Skew has experienced a comprehensive decline

Data Source: Deribit, Overall Distribution of ETH Trading

Data Source: Deribit, Overall Distribution of BTC Trading