Bitcoin is consolidating near $78,500 this morning after pulling back from Monday’s $81,000 rejection, with three events over the next 48 hours that will likely determine whether the rally continues or stalls. First: PCE inflation data lands at 8:30am this morning — the Fed’s preferred price gauge — and a hotter-than-expected reading could revive September rate-hike fears and push BTC back below $75,000. Second: Nvidia reports earnings after the close today; given a 90-day correlation above 0.5 between BTC and NVDA, a big beat or a miss will likely move crypto. Third: Fed Chair Kevin Warsh speaks at Jackson Hole on Friday, with markets watching to see whether he backs the Treasury’s bond buyback program or takes a harder line on inflation. A $6.4 billion bitcoin options expiry also falls on Friday, which could magnify whatever direction the market is moving. Stay alert.
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L1.co Disclosure: This material is for informational purposes only, and the content contained herein should not be considered investment advice or a solicitation, offer, or recommendation to sell or buy any asset, strategy, or product. Investing in digital assets involves a high degree of risk, including the loss of principal.
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The three catalysts that could define bitcoin’s next move.
Bitcoin’s next directional move will be shaped by three events packed into the next 48 hours. The first lands this morning at 8:30am: July PCE inflation, the Federal Reserve’s preferred inflation measure. Economists expect core PCE at 3.2% year-on-year and 0.18% month-on-month, slightly above June’s 3.3% and 0.13% readings respectively. A hotter-than-expected number would revive concerns about a September rate hike, putting pressure on risk assets. Bitcoin has already pulled back from Monday’s high near $81,000, and its 14-day RSI reading above 70 signals overbought momentum that tends to precede a pause. Bond markets currently price in roughly a 38% chance the Fed raises rates 25 basis points in September — not a base case, but enough probability to matter if PCE surprises. The second catalyst arrives after the close today: Nvidia Q2 earnings. The 90-day rolling correlation between BTC and NVDA has held above 0.5 since early 2025, meaning Nvidia’s report has real potential to move crypto. A large earnings beat could ease concerns about AI capital spending cycles and lift risk appetite across markets; a miss could do the reverse. The third is Friday’s Jackson Hole keynote by Fed Chair Kevin Warsh — his first in the role. Treasury Secretary Bessent has been trying to suppress long-dated yields through expanded bond buybacks; Warsh has historically preferred letting markets set rates freely. The question markets are asking is whether Warsh will align with the Treasury’s interventionist approach or signal a harder line on inflation. That speech is also the same day as the $6.4 billion bitcoin options expiry, concentrating risk into a single session.
A massive $6.4 billion bitcoin options expiry on Friday could amplify volatility either way.
Friday’s options expiry is shaping up to be one of the most consequential since bitcoin crossed $80,000. A total of 81,700 bitcoin option contracts — representing approximately $6.44 billion in notional value — expire on Deribit at 08:00 UTC, covering roughly 20% of the exchange’s total bitcoin open interest. The positioning is bullishly tilted: 44,639 calls versus 37,061 puts, a put-to-call ratio of 0.83. The two most favored call strikes are $75,000 (the largest call open interest at $236 million in notional) and $80,000 ($157 million). Max pain — the price at which the most option buyers lose money — sits at $68,000, far below where the market is currently trading. The week’s rapid price move from $62,000 to $80,000 has pushed a large number of call options into profit (in-the-money), which creates a specific mechanics problem for market makers who sold those calls. Market makers who sell options offset their exposure by buying or selling the underlying asset as the price moves — a process called delta or gamma hedging. When a large amount of call options sits near the current price, even small spot price moves force market makers to adjust those hedges more aggressively. The net effect, according to Deribit’s Chief Risk Officer Shaun Fernando, can be either “pinning” — the price gravitating toward a dominant strike like $80,000 — or amplified moves if the price breaks decisively through it. Beyond the mechanics, the market’s sentiment backdrop has also shifted sharply. Bitcoin’s implied volatility index DVOL rose 30% on a relative basis last week. The volatility term structure flipped from backwardation to contango. The call-put skew went from negative (more demand for downside protection) to positive (more demand for upside calls). All three shifts reflect a market that re-priced from defensive to offensive in days.
BlackRock cut its bitcoin ETF swap minimum from $25 million to $1 million.
BlackRock has dramatically lowered the barrier for large bitcoin holders to swap their self-custody coins directly into shares of its IBIT exchange-traded fund, cutting the minimum in-kind swap from $25 million to $1 million in July, according to a Bloomberg report. Bitwise made a similar move, reducing its threshold from $100 million to $3 million. The mechanism involved is called in-kind creation: rather than selling bitcoin for cash and then purchasing ETF shares (which triggers capital gains tax), a holder hands over bitcoin directly to the fund and receives IBIT shares in return. The tax efficiency of that approach — combined with the security, liquidity and regulatory clarity of holding an exchange-traded fund rather than managing self-custody — has made it attractive to a growing pool of large holders. The scale of the activity is notable: IBIT alone has processed more than $5 billion of these swaps since the ETF launched, up from $3 billion as of October, according to Robbie Mitchnick, BlackRock’s head of digital assets. What’s driving it: crypto-related crime. “People see things happen in the outside world — crypto kidnappings, hacks, and custody failures — that motivate them to make this switch for all or some of their holdings,” Mitchnick told Bloomberg. Lowering the threshold from $25 million to $1 million opens the mechanism to a substantially larger pool of eligible holders — not just institutional balance sheets and family offices, but high-net-worth individuals sitting on long-term coin positions. The trend is spreading beyond bitcoin: Grayscale and VanEck now offer in-kind swap programs for ether. The structural significance is meaningful — each swap converts a self-custody holding into regulated ETF demand, reducing circulating supply while increasing institutional ownership of the underlying asset.
CoinDesk Disclosure: The information contained in this newsletter, and any information linked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. You should seek additional information regarding the merits and risks of investing in any cryptocurrency or digital assets.
L1.co Disclosure: This material is for informational purposes only, and the content contained herein should not be considered investment advice or a solicitation, offer, or recommendation to sell or buy any asset, strategy, or product. Investing in digital assets involves a high degree of risk, including the loss of principal.
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