Bowman suggests that small crypto investments could improve Fed staff’s understanding of financial products
by VT Markets
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Aug 20, 2025
Bowman from the Federal Reserve believes that allowing staff to own small amounts of cryptocurrency would improve their knowledge of these financial products. He suggests that limiting Fed staff’s ability to invest could make it harder to attract and keep skilled examiners. His comments do not touch on monetary policy or economic issues.
We see the idea of permitting Fed staff to hold crypto not as a signal for monetary policy but as a big cultural change towards accepting these assets. This indicates that regulators consider digital assets a permanent part of finance that needs understanding. For us, this lowers the chances of a total ban, which has been a worry for the industry.
In the next few weeks, this news could stabilize the implied volatility for longer-term options. The BitVol index, which tracks Bitcoin’s expected 30-day volatility, has dropped to an average of 52 this year, a big change from the 70s we experienced during the regulatory uncertainty of 2024. We see this as a chance to sell cash-secured puts on BTC and ETH or create bull put spreads, taking advantage of the reduced fear.
This positive feeling is backed by strong institutional investments. Since the US authorized Bitcoin ETFs in 2024, they have gathered over $110 billion in global assets. This ongoing demand from traditional finance makes the Fed’s need for internal expertise more urgent and credible. As a result, we are looking at long-dated call options that expire after the first quarter of 2026 to prepare for steady growth driven by regulation.
We recall how seemingly small comments from regulatory bodies led to major market changes in 2023 and 2024. Such signals often indicate a significant shift in regulatory stance before any official rules are set. It suggests that the easiest path for digital assets in the US is toward integration rather than separation.
by VT Markets
Aug 20, 2025
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