Market Overview - Crypto markets experienced a significant rally, with Bitcoin surpassing $92,000 and Ether exceeding $3,100, indicating a return of risk appetite at the start of the year [1] - The rally is perceived as a potential shift in market regime rather than a temporary bounce, supported by a reduction in year-end tax-loss selling and renewed focus on policy options [2][7] Geopolitical Influences - Geopolitical events, such as the capture of Venezuelan President Nicolás Maduro by US special forces, contributed to market sentiment, with lower oil prices potentially providing a disinflationary effect [3] - Speculation regarding seized digital assets has sparked discussions about a possible "shadow" Bitcoin reserve, reflecting sovereign interest in crypto holdings [4] Derivatives Market Dynamics - The derivatives market has shown increased support, with a compression in put skew indicating reduced demand for downside protection and heightened interest in longer-dated upside exposure, including January 2026 $100,000 Bitcoin calls [4] - Demand for topside structures like straddles has also increased, although overall positioning remains cautious [4][7] Whale Activity - Large crypto holders transferred approximately $2.4 billion worth of Bitcoin and Ether to Binance, marking the exchange's largest net inflow in about a month, with deposits evenly split between the two assets [6]