With Trump’s Crypto Plan Missing the Mark, Bitcoin, Ether, and Solana Traders Turn to Risk Protection, While XRP Stands Strong.

Crypto Traders Hedge as Trump’s Digital Asset Reserve Falls Short

Bitcoin (BTC), Ether (ETH), and Solana (SOL) traders are turning to downside protection, with short-term put options trading at a premium over calls, signaling growing concerns about near-term price action, according to Block Scholes.

On Thursday, U.S. President Donald Trump signed an executive order establishing a digital asset reserve to hold BTC and altcoins seized in enforcement actions. However, the reserve will not make new purchases, disappointing traders who had hoped for fresh buying momentum.

With no immediate buying support from the government, traders are increasing their hedging activity, particularly in BTC, ETH, and SOL options, according to Deribit data analyzed by Block Scholes. XRP, however, remains an outlier, showing signs of strength amid the broader uncertainty.

Demand for Put Options Signals Bearish Caution

Put options, which give traders the right to sell an asset at a set price, are commonly used as hedging tools during uncertain market conditions.

Market skews—measuring the difference in implied volatility between puts and calls—indicate that short-term BTC, ETH, and SOL puts are commanding a premium, reflecting traders’ concerns about potential downside.

“Short-dated skews for BTC, ETH, and SOL continue to favor puts, signaling defensive positioning. However, longer-term expiries past April still lean bullish for BTC and ETH, while XRP options maintain a positive skew across all durations beyond one week,” said Andrew Melville, research analyst at Block Scholes.

He added that derivatives markets are reacting to the underwhelming nature of Trump’s executive order, which fell short of the buying activity some traders had anticipated.

BTC and ETH volatility structures are also adjusting, with front-end implied volatility dropping by over 10 points as traders reassess risk heading into key macroeconomic events.

Market Eyes White House Crypto Summit and Jobs Report

With regulatory uncertainty still in focus, attention now turns to Friday’s White House Crypto Summit, where traders hope for clearer policy direction.

“The summit could be pivotal for the regulatory outlook, with discussions around token classifications, enforcement policies, and tax incentives potentially shaping market sentiment. Clearer guidelines could provide institutional investors with more confidence to enter the crypto space,” said Ryan Lee, chief analyst at Bitget Research.

Lee noted that traders will be closely watching for signals from SEC Commissioner Mark Uyeda and any legislative backing that could ease restrictions on crypto firms. A supportive stance could drive a bullish shift, while vague or unfavorable policies could introduce new volatility.

Additionally, the U.S. nonfarm payrolls (NFP) report for February, set for release at 13:30 UTC, is another key event on traders’ radar. Analysts expect job growth to rise to 160K from 143K in January, with the unemployment rate holding at 4%. Wage growth is expected to slow slightly to 0.3% month-over-month from January’s 0.5%.

A weaker-than-expected jobs report could fuel speculation about multiple Federal Reserve rate cuts this year, which could provide tailwinds for BTC and risk assets.

Fed Policy Uncertainty and Inflation Risks

Despite rising market hopes for interest rate cuts, some analysts remain cautious.

“Traders now anticipate three rate cuts in 2025 instead of just one, but the Federal Reserve will likely take a wait-and-see approach given the potential inflationary impact of Trump’s tariffs. The central bank may need months to assess the full effect,” said Markus Thielen, founder of 10x Research.

Thielen also pointed out that under a Trump administration, the “Fed put”—the threshold at which the central bank steps in to stabilize markets—could be lower than under a Democratic presidency, meaning policymakers might tolerate greater market volatility before intervening.

As traders navigate regulatory shifts and economic data, the crypto market remains on edge, bracing for potential catalysts that could define its next major move.

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