Why Bonds Win: Call Options, Volatility, and the Crisis of Trust in the Crypto Market

The cryptocurrency market is experiencing a wave of uncertainty. Over the past 24 hours, Bitcoin has shown sluggish activity, fluctuating within a narrow range, while 10-year US Treasury bonds steadily attract investor capital. The paradox is evident: the conservative bond instrument has outperformed cryptocurrencies this year, despite massive purchases of Bitcoin by government agencies and institutional investors. Call options on Bitcoin remain a subject of debate among traders regarding where genuine demand is forming in the market.

Nighttime Bitcoin Stagnation Amid Bond Strength

As of February 1, 2026, Bitcoin is trading at $78,390, down 6.16% over the last day. Against this shift, the CoinDesk 20 index, tracking major crypto projects, remains nearly unchanged, demonstrating a loss of momentum. Meanwhile, the broader CoinDesk 80 index maintains a modest positive trend, indicating pockets of strength in the altcoin segment, although they remain weak.

The contrast between cryptocurrencies and traditional assets is becoming more pronounced. While Bitcoin has fallen significantly since the start of the year, US 10-year bonds have risen, offering investors a safe haven amid growing uncertainty. This suggests that conservative asset allocation in bonds has proven more prudent than aggressive positions in cryptocurrencies — a sad conclusion for decentralization advocates.

Capital Flows into Bonds and Threats to Risk Assets

Capital outflows from spot Bitcoin ETFs into bonds may serve as an early warning of a more serious macroeconomic correction. The US dollar index (DXY), reflecting the relative strength of the US currency, shows remarkable resilience, staying above its 200-day simple moving average (SMA) despite a series of weak economic data from the US. This is a classic sign that the market is ignoring bad news — behavior often preceding significant moves in risk assets, including stocks and cryptocurrencies.

Investors are beginning to reassess risk. Bonds are not attractive from a yield perspective, but they offer control over volatility. When investors start accumulating in bonds, it signals a decrease in risk appetite and that the market is preparing for increased volatility.

Call Options, Hedging, and Trading Uncertainty

Options flow analysis reveals an intriguing picture of trading activity. Early in the week, there was a surge in hedging activity focused on put options with an $80,000 strike price, indicating traders’ fears of a decline. However, shortly after, a large block trade occurred, hinting at a possible recovery above $100,000 by the end of the year.

The situation became more complex with active buying of call options with a $220,000 strike, initially appearing as a bullish position. But this was immediately offset by purchases of call options with a $40,000 strike, indicating traders are betting on extreme volatility rather than a directional rise. Call options are becoming tools not for expressing confidence in growth but for speculating on uncertainty.

This trading activity demonstrates increasing market confusion. Traders are unsure whether to go up or down, so they bet on volatility. This is a sign of a transitional period when the market loses direction and becomes a hunt for short-term spikes in volatility.

Banking Rules: The First Glimmer of Hope

A positive development that has gone largely unnoticed is a new rule for US banks, reducing capital requirements for bonds and other low-risk assets. This reduction could free up liquidity in the banking system, potentially stimulating lending and enabling bond dealers to more actively support the market during stress periods.

James Thorne, Chief Market Strategist at Wellington-Altus Private Wealth, described this move as a clear sign of “upcoming deregulation.” Such signals could reshape the short-term landscape, although their impact on cryptocurrency remains uncertain.

Key Events to Watch

Crypto Innovations: Bitwise’s Dogecoin ETF (BWOW) is preparing to begin trading on NYSE Arca, attracting speculative interest in meme coins. The first satellite group based on Spacechain Protocol (SPACE) will start operations from a US Space Force airbase in California, opening a new front for decentralized technologies in space.

Macro Calendar: UK Chancellor of the Exchequer will present the budget statement, which could influence global markets. The US will release data on durable goods orders and unemployment claims, which may strengthen or weaken the case for Fed rate cuts.

Conferences: The Finance Magnates Summit in London, a digital securities conference in Frankfurt, and the International Digital Banking Summit in Amsterdam provide platforms to discuss the future of financial infrastructure.

What Markets Show: Volatility as the New Normal

Key Cryptocurrency Indicators:

Bitcoin is trading at $78,390 with a 6.16% daily decline. Ethereum fell 10.06%, showing weaker momentum. Bitcoin dominance remains steady at 58.61%, although the ETH-BTC ratio is decreasing, indicating capital outflows from altcoins.

Bitcoin hash rate stays at 1.04 EH/s, demonstrating network security stability despite price fluctuations. CME futures open interest stands at 131,460 BTC, indicating significant institutional activity in derivatives.

ETF Capital Flows:

Spot Bitcoin ETFs recorded a daily net inflow of $128.7 million, reflecting ongoing institutional interest despite overall market weakness. Total net inflows reach $57.59 billion. Ethereum ETFs saw a net inflow of $78.6 million with accumulated inflows of $12.83 billion, though these figures highlight a slowdown in new fund inflows.

Technical Outlook: Market Ignores Bad News

The dollar index chart shows a classic bullish scenario: the price remains above the 200-day SMA despite weak macroeconomic data, including employment reports and rising probabilities of Fed rate cuts. This suggests the market is preparing for another scenario — possibly more significant deflation or geopolitical shocks that will keep investors holding dollars regardless of interest rates.

Major stock indices closed positively: Dow Jones up 1.43%, S&P 500 up 0.91%, Nasdaq Composite up 0.67%. However, beneath the surface, this strength appears fragile, masked by rising bond volatility and tangled options flows.

Conclusion: Bonds Raise Questions at the Table

Current dynamics clearly show that bonds have displaced cryptocurrencies as the preferred safe asset. While call options and other derivatives indicate growing speculation on volatility, the main message is simple: investors are losing risk appetite.

New banking rules may provide short-term relief, but long-term dynamics require restoring confidence. As long as bonds continue to attract capital and call options remain tools for speculation on uncertainty, cryptocurrencies will struggle to regain the investment community’s focus.