Taiwan Considers Bitcoin for National Reserves – A Bold Move in 2025

Taiwan's central bank sparks global attention with its exploration of Bitcoin as a reserve asset. Could this be the next domino to fall in sovereign crypto adoption?

Breaking from tradition: The island nation joins a growing list of governments diversifying beyond fiat and gold. Analysts note the move aligns with Taiwan's tech-forward reputation—but warn of volatility risks.

Wall Street snark: 'Finally, a reserve asset that can lose 20% before lunch,' quipped one skeptical trader. Yet the potential upside has crypto bulls cheering.

In today’s increasingly challenging cryptocurrency market, institutional investors are displaying significant divergence in their options strategies. Faced with growing uncertainties around Bitcoin$101,765, many are opting for volatility-focused strategies, while others adopt opposing positions with XRP. Recent block transaction data from Deribit highlights a clear separation in risk perception between these two assets, suggesting that price movement expectations are now being defined by asset-specific dynamics.

Bitcoin’s Rising Volatility Expectations

Data from Deribit shows a notable increase in directionless strategies within the Bitcoin options market. In the past week, strangle trades accounted for 16.9% and straddle trades for 5% of block transactions. Combined, these strategies made up over one-fifth of total flows, underscoring the investors’ acknowledgment of potential severe price movements, despite the direction remaining uncertain. According to Deribit CEO Luuk Strijers, both market makers and major portfolio managers anticipate sustained uncertainty, adopting flexible positions in response.

For those unfamiliar, strangle and straddle positions allow positioning against dramatic movements beyond expected ranges. When bitcoin is priced around $104,700, executing a long strangle by purchasing $105,000 call and $104,400 put options simultaneously keeps costs low while taking advantage of broad price fluctuations. Institutional investors can anonymously manage their risks through over-the-counter block trades, supported by Bitcoin’s options market with an open position size exceeding $44 billion.

Meanwhile, the predominant strategy for Ethereum$3,417 in the past week was the put diagonal spread, with volatility-focused positions contributing around 8% of total block flows. This trend signals a more balanced outlook for Ethereum, suggesting a less aggressive directionality than Bitcoin while capitalizing on time value.

Investors Rely on Calm XRP Price Range

Though the XRP options market remains relatively small, large-scale block trades occasionally impact the market significantly. Institutional investors’ over-the-counter transactions—despite a modest $67.6 million open position size—highlight current price expectation confinements. Notably, a short strangle position recorded through Paradigm and reported on Deribit involved selling 40,000 units each of $2.2 call and $2.6 put options, reflecting an anticipated narrow price band. The average premium earned was 0.0965 USDC, suggesting investors expect price stability within this range.

According to Lin Chen, Deribit’s Asian business development manager, XRP’s at-the-money volatility soared above 80, pricing in macro uncertainties. The ongoing U.S. government processes and contentious December rate cut debates are pushing major investors to seek returns through options premiums. Investors choosing short strangle strategies anticipate prices remaining within the $2.2–$2.6 range, aiming for high premium returns. However, unexpected increases in volatility could theoretically result in unlimited losses, making this strategy suitable only for professionals with high-risk appetites.

The expectation of a narrow range for XRP contrasts sharply with Bitcoin’s potential for dramatic movements. This divergence reveals two distinct market structures under which institutional investments are assessed; Bitcoin leans toward directionless but volatility-focused positions, while XRP aims for premium earnings based on anticipated price stability.