The White House will release its cryptocurrency policy report on July 30. This comes after the President’s Working Group on Digital Assets finished a 180-day review based on an executive order from January. A major part of the report is the Strategic Bitcoin Reserve. This reserve will serve as a stockpile of Bitcoin for the U.S. government. The report will likely include details about current Bitcoin holdings, mostly obtained through legal seizures, and discuss how to formalize this reserve in the national digital asset strategy.

Federal Regulatory Framework

The report is also expected to suggest a federal framework for regulating digital assets. This framework will address how digital assets are issued, managed, and utilized in financial markets. It could significantly influence future policies and market structures. The report’s release date was initially set for July 22 but has now been moved to July 30. With these upcoming policy decisions from Washington, derivative traders should prepare for increased market volatility. Previous regulatory announcements, like the SEC’s actions against crypto companies, have caused the Deribit Volatility Index (DVOL) to increase by 20-30% within days. We recommend buying options straddles or strangles to capitalize on big price changes, regardless of their direction. The Strategic Bitcoin Reserve is an important topic. The U.S. government is one of the largest Bitcoin holders, with estimates suggesting over 214,000 BTC from seizures tied to Silk Road and the Bitfinex hack. If any policy hints at selling part of this reserve, it could overwhelm the market. Thus, protective puts would be wise to safeguard against a sudden price drop.

Broader Federal Regulations

New federal regulations, like the FIT21 bill that recently passed the House, will favor some digital assets while disadvantaging others. This makes long-dated options on specific assets more appealing, as it allows time for the market to absorb the complex regulations. We are positioning ourselves to benefit from the uncertainty over which agency, the SEC or CFTC, will take main control. The reported delay in the release has become a trading signal. It indicates possible disagreements and rising market anxiety. This unease raises options premiums, providing an opportunity to sell covered calls against existing positions for income. This strategy allows traders to profit from heightened market fear while waiting for a final decision. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now