Institutional crypto derivatives analytics firm Block Scholes said the US-Iran interim peace deal has caused traders to cut the implied probability of a Federal Reserve rate hike by year-end to 75%, down from 100% two weeks ago, according to Fed Funds futures.
The firm’s June 16 note said a plunge in oil prices following the deal eased one key inflation input, reducing the case for further tightening. Brent crude fell to around $80 a barrel on the day, down 3.73% and extending a four-session decline, Trading Economics data shows.
Bitcoin briefly touched $67,000 after dropping earlier in June to a low last seen in October 2024, Block Scholes said, while ETH reclaimed $1,700. Short-dated options markets also cooled, with 7-day BTC ATM implied volatility trading around 33%, only a few points above the year-to-date low of 28%.
“We’ve seen this pattern of seasonality over the past three years, with demand for options falling to lows over the summer period between the months of May and September since 2023,” said Thahbib Rahman, Research Analyst at Block Scholes.
As recently as mid-May, traders had priced the Fed’s next move as a hike for the first time in the current cycle, following a string of multiyear-high inflation readings.
