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Amid ceremonial cannon fire and a star-studded Capitol Hill, Trump’s inauguration sparked speculation about crypto-related executive orders. Sentiment drove volatility buyers to push front-end vols significantly higher, creating massive vol-of-vol, with Friday expiry trading in a 25v range over 24 hours.

When Trump’s speech failed to mention crypto, the sell-off was gradual but still significant, wiping out $816 million in long positions. The BTC vols curve remains firm at the front end, holding in backwardation.

Markets received a stark reminder of life under President Trump, with more volatility-inducing rhetoric. His threat to impose tariffs of up to 25% on Canada and Mexico is a case in point.

Crypto Outlook

While markets await Trump’s move on a potential national strategic Bitcoin stockpile, states are acting independently. According to Bloomberg, eight states, including Texas and Massachusetts, have proposed crypto reserves, with five more poised to follow.

More short term volatility likely looms for BTC which explains the elevated front-end vols, especially with MicroStrategy shareholders set to vote at 10 a.m. NY time on authorizing a substantial increase in share count.