Deribit Exchange Reports Bitcoin Traders Hedging Downside Despite Fed Rate Cut

Bitcoin traders are aggressively hedging against downside risks even after the Federal Reserve's 25 basis point rate cut and signals of further easing by year-end. Deribit CEO Luuk Strijers notes persistent demand for put options across all time frames, with skew remaining flat to negative—a rare divergence from historical patterns where bullish sentiment typically dominates post-rate cuts.

The SEC's new generic listing standard for crypto ETFs could accelerate approvals, yet Deribit's DVOL index languishes near 24%, a two-year low for implied volatility. Market participants continue to prioritize downside protection over upside bets, with call overwriting flows suppressing upward momentum.

As the dominant force in crypto options with 80% market share, Deribit's metrics reveal a cautious institutional stance. The put premium persists despite macroeconomic tailwinds, suggesting traders anticipate potential volatility ahead of key regulatory milestones and macroeconomic shifts.