Paradigm Edge

Paradigm's Week In Review (August 10 - August 15) BTC and ETH traders' behavior was opposite this week, as BTC traders were net long delta and vega while ETH traders were net short the same greeks, despite ETH/BTC being up 2.6% since Monday • BTC - traders took advantage of 'cheap' vol to mostly buy calls, with the bulk of the volume at the $70k strike • ETH - traders' positioning was mostly bearish and short vol even though IV is in the yearly-low region This divergence is interesting because both assets are moving similarly on price and volatility, trading in a tight range with realized volatility compressing faster than IV. Both assets' VRP are in high percentiles YTD, with BTC at the 92nd percentile and ETH at the 87th percentile

Paradigm Session Recap - August 12th Traders took advantage of cheap vol at yesterday's session to build bullish positions as the market wasn't pricing a high risk of a hot CPI print Despite CPI data coming in line with expectations, both BTC and ETH gave back early-day gains and closed slightly down, at $63,392 and $1,877, respectively. DVOL is flat

Paradigm Session Recap - August 11th • BTC closed down 0.55% to $63,473; DVOL is up to 37 • ETH closed up 0.6% to $1,882; DVOL is flat at 48.9 Yesterday's session was quieter as the July CPI release is approaching. The market is not anticipating a bad print per the vol and skew data ATM vol is still in the lows range while the term structure is in contango. The 25-delta skew hasn't changed much, with most tenors sitting between 10 and 14 pp

Paradigm Session Recap - August 10th • BTC closed down 1.33% to $63,973; DVOL is up to 36.09 • ETH closed down 2.19% to $1,871; DVOL is up to 49.65 Volatility sits at historically low numbers, the only period worse was 2023, where BTC and ETH's vol were trending down for the best part of a year The top Paradigm trades in today's session are looking to take advantage of cheap premiums to bet on BTC's breakout of the current range to $70k in the next 45 days

Paradigm Session Recap - August 6th • BTC is flat at $64,256; DVOL is also flat at 34.98 • ETH is flat $1,901; DVOL is also flat at 47.90 As vol keeps trending down, today was a very calm day for the crypto market with only two trades over 100 BTC notional and no large trade for ETH IV is still at the bottom rank and percentile of the year, but BTC's VRP still carries 6pp while ETH carries 8pp *VRP calculated using DVOL vs. the last 30d realized volatility

Paradigm Session Recap - August 5th • BTC closed up 0.66% to $64,551; DVOL is flat at 34.65 • ETH closed up 2.14% to $1,906.8; DVOL is flat at 48.07 IV now sits at the bottom 0.5 percentile for BTC and ETH. IV rank for both assets sit at the bottom 2 percentile. The current vol trend is similar to 2023, where IV was making historical lows but still contained a fat risk premium compared to realized vol. Contrary to yesterday, the vast majority of ETH's top positions were long positions: 12.2k long calls opened today, mostly 4-5 DTE. • Nasdaq is down 0.83% to 26,363.44 • S&P is flat at 7,723.55

Paradigm Session Recap - August 4th • BTC is up 1.23% to $64,239; DVOL is slightly down to 34.06 • ETH is up 0.87% to $1,875; DVOL is down to 47.89 Both IV and realized volatility keep trending down on crypto majors while equity indexes bounce to new ATHs ETH flows featured mostly bear risk reversals for September and December's quarterly expiries, totaling 16.5k contracts • Spot Brent fell another 6% to $78.48, closing below $80 for the first time since July 10th • Nasdaq is up 2.59% at 26,584.99 • S&P is up 1.79% to a new all-time high of 7,736.52

Paradigm Session Recap - August 3rd • BTC closed the day flat at $63,435; DVOL is slightly down to 34.81 • ETH is down 1.37% to $1,859; DVOL is slightly down to 49.23 The IV Rank & Percentile for both majors keep trending lower, BTC sits at IV Rank 3.4 and IV Percentile 3, while ETH sits at IV Rank 4.7 and IV Percentile 3.8 The $70k call strike saw 3.3k new contracts opened today, the biggest change by any strike, with the bulk of it for the quarterly expiry on September 25th The 2026 window is closing for the Clarity Act's approval as the US Senate leaves for recess on August 11th, and there is still a deadlock over ethics. The prediction markets' odds of approval in 2026 sit at 27%. • Spot Brent closed down 5.67% at $83.10 • Nasdaq is up 2.13% at 25,913.90 • S&P is up 1.48% at 7,600.50

Paradigm Session Recap - July 30 • BTC is up 1.27% at $64,754; DVOL is down 2pp at 35.52 • ETH is up 1.36% at $1,933; DVOL is down 1.5pp at 50.9 The frontend of the curve got crushed by as much as 10v after the FOMC, with tomorrow's July 31 expiry falling 10.1v for BTC and 13.2v for ETH. The curve is now in contango from the Aug 7 expiry. Tomorrow's expiry is a big one, $11.99B of BTC OI and $1.66B of ETH OI, 33.4% and 29% of the respective totals. Roughly 91% of BTC and 81% of ETH's OI are OTM and will probably expire worthless. 78.1% of BTC's OI is at least 5% OTM while 64.9% of ETH's is 5% or more OTM. The IV Rank % Percentile for both majors are in extremely low values: • BTC sits at IV Rank 4.4 and IV Percentile 5.2 • ETH sits at IV Rank 7 and IV Percentile 5.5 ETH's tape had interesting positioning today as the two biggest positions are a $35.7M put bought for August's monthly expiry and a $13.5M bull call spread for August 7. There was some relief on the market after the news of Citadel acquiring Leopold's Situational Awareness public equities book. The VIX is down over 4 points today after the relief in AI-related stocks and the fear of the FED hiking passed • Spot Brent is flat at $87.01 • Nasdaq is up 2.78% at 25,122.18 • S&P is up 1.66% at 7,473.63

Paradigm Session Recap - July 29 • BTC is flat at $63,881; DVOL is also flat at 37.48 • ETH is flat at $1,903; DVOL is also flat at 52.61 The FED kept rates unchanged on a 9-3 vote. It was the first time since 2016 that there were three dissents in the same direction The bond market didn't like Warsh's press conference as the 30Y yields went up 0.061 points during the interview, now at 5.212%, the highest since 2007. The 10y is up 0.073 points in the day, nearing its 1-year highs at 4.687% Meta tumbles 9% in the after-hours after missing earnings forecast • EPS $6.18 vs. $7.14 y/y - 13% below expectations • Revenue $60.80B, est. $60.24B The KOSPI closed -5.98% on the day, now 40% off the highs as the country's broad deleverage continues • Spot Brent is up 4.25% to $87.91 • Nasdaq is down 1.744% at 24,442.94 • S&P is down 1.52% at 7,316.15 Despite everything that is happening in the traditional markets, major crypto assets' volatility has been non-existent while memory stocks such as Micron and Sandisk are trading on over 100% realized vol It is still not clear if crypto's recent lack of volatility and outperformance against Trad markets is relative strength or just a lag before following it downward

Paradigm Session Recap - July 28 • BTC is flat at $63,880; DVOL is also flat at 37.25pp • ETH spot closed at $1,921; up 1.58%; DVOL is up 1pp at 52.9 Frontend volatility in BTC and ETH is trading rich relative to the 1M tenor, with the term structure inverted through late July and early August as markets price in uncertainty around tomorrow's FOMC rate decision. Beyond the 28AUG expiry, the curve normalizes into contango. The KOSPI closed another -10% day, now more than 35% off the highs SK Hynix missed earnings by ~5% • SK HYNIX 2Q SALES 79.32T WON, EST. 83.85T WON • SK HYNIX 2Q OPER PROFIT 60.54T WON, EST. 64.22T WON • Spot Brent closed 3.68% down to $82.02 • Nasdaq is down 0.22% at 24,876.91 • S&P is up 0.21% at 7,428.78

Paradigm Session Recap - July 27 • BTC spot closed at $63,820; 2.48% down; DVOL is flat at 37pp • ETH spot closed at $1,890; 3.34% down; DVOL is flat at 51.9pp Today two factors scared the market: • Rate hike odds on FedWatch are at 38%, the higher it has been in a long time • News on China's first mass-production of DUV chipmaking tools were responsible for tanking the memory big names such as: ASML, AMD, Micron and Sk Hynix all went down 7%+ CXMT's IPO was the most successful IPO of the year at China, raising U$8.6b and closed the day up 466%, becoming the largest public company at the Shangai Stock Exchange • Spot Brent closed 8.94% down to $84.97 • Nasdaq is down 0.18% • S&P is flat

Paradigm Session Recap – July 23 Spot is down, with BTC at $64,900 and ETH at $1,900 as of this writing. Tesla shed $214.5B in market capitalization, marking the largest one-day market cap loss in the company's history. Intel shares rallied in after-hours trading following stronger-than-expected quarterly results. BTC put skew widened while ETH skew flipped back to puts. Flows were mixed, with BTC 24 Jul puts lifted and ETH 31 Jul calls and call spreads bought.

Paradigm Session Recap – July 22 Spot is down, with BTC at $66,100 and ETH at $1,900 as of this writing. Treasury yields continued to climb alongside oil prices, pushing the 10-year yield near its 2026 intraday high of 4.69%. Alphabet reported 24% revenue growth in Q2, driven by its cloud business, but free cash flow turned negative as AI data center spending accelerated. Shares traded lower after hours. BTC vols were largely unchanged while ETH skew flipped to calls. Flows featured the 7 Aug 70k call again, alongside the 25 Dec 58k put at 43v. ETH also saw OTM activity, with the 25 Dec 3.5k trading at 58v.

Paradigm Session Recap – July 21 Spot is up, with BTC at $66,600 and ETH at $1,900 as of this writing. Stock indexes moved higher as chip stocks rebounded. Coinbase shares rallied after the Clarity Act cleared a key hurdle, with the White House and a group of senators led by Sen. Cynthia Lummis (R., Wyo.) and Sen. Bernie Moreno (R., Ohio) reaching an agreement on an ethics provision that had stalled the bill. Fed Funds Futures now price a 25% probability of a rate hike at next week's FOMC. ATMs were again largely unchanged while put skew continued to ease. BTC flows featured calls rolled and outright buying, including the 7 Aug 70k bought at 38v. ETH flows were further out the curve, with the 28 Aug 2.5k lifted at 53v.

Paradigm Session Recap – July 20 Spot is up, with BTC at $65,300 and ETH at $1,900 as of this writing. Q2 earnings season continues this week, with results due from Alphabet, Tesla, IBM, and Intel. It is a light week for macro data, and no Fed speakers are scheduled as policymakers are in the blackout period ahead of the next FOMC meeting. ATM term structures were once again largely unchanged while ETH skew eased. BTC flows featured a Dec 56k/40k put spread sold, while ETH 7 Aug 2.1k calls were lifted. SOL also saw notable activity, with the 31 Jul 85 outright call bought and a 31 Jul 73/77/83 seagull traded.

Paradigm Session Recap – July 16 Spot is down, with BTC at $63,700 and ETH at $1,900 as of this writing. Dallas Fed President Lorie Logan said the Federal Reserve should raise rates to combat elevated inflation, signaling a potential dissent if the FOMC holds rates steady later this month. ATMs were largely unchanged while ETH skew eased. BTC flows featured puts lifted across the curve, from the 20 Jul 62.5k at 33v to the 25 Sep 50k at 49v. ETH flows, meanwhile, featured calls lifted, including the 31 Jul 2.3k at 54v and the 7 Aug 2.1k at 48v. There were also a few HYPE prints such as the 28 Aug 52 put and the 31 Jul 80 call.

Paradigm Session Recap – July 15 Spot is flat, with BTC at $64,700 and ETH at $1,900 as of this writing. ASML reported record quarterly orders and raised its sales guidance. Shares in Amsterdam rallied before trimming gains as U.S. semi stocks sold off. Following softer inflation prints, Fed Funds Futures now lean toward a hold at the 29 Jul FOMC. Fronts are down slightly and put skew eased. BTC flows featured the 31 Jul 70k/72k call spread lifted in 10,000x, while the ETH 28 Aug 2.4k call was sold. There were also notable SOL and XRP prints. A strong session with $1.8B traded via Paradigm, totaling 54% market share.

Paradigm Session Recap – July 14 Spot is up, with BTC at $64,900 and ETH at $1,900 as of this writing. Treasury yields slipped after June inflation came in at 3.5%, cooler than expected. During congressional testimony, Fed Chair Kevin Warsh cautioned that one month of softer inflation data does not mean "mission accomplished." Fronts and put skew eased. Flows featured a 15 Jul/17 Jul calendar and the 31 Jul 60k put lifted at 39v. The 24 Jul 1875 straddle was bought at 46v.

Paradigm Session Recap – July 13 Spot is down, with BTC at $62,200 and ETH at $1,700 as of this writing. After soaring on Friday, SK Hynix shares closed down 15% in Seoul, their steepest decline on record. U.S. chip stocks followed, weighing on the Nasdaq. Fed Funds Futures now price a 40% probability of a rate hike by month-end. Tomorrow brings bank earnings, June CPI, and Fed Chair Kevin Warsh's monetary policy testimony before the House. Warsh is scheduled to testify before the Senate on Wednesday. Vols were largely unchanged. Flows featured puts lifted, with the 17 Jul 62k at 39v and the 31 Jul 1550 at 57v. The SOL 15 Jul 76/77 strangle was sold.