The bitcoin BTC$67,371.50 market has been stuck in a rut for over a month, and investors chasing yields may be partly to blame.

Since mid-February, BTC has traded in a range centred on $70,000. Some observers say counteracting forces have been at play. The Iran war-led haven demand has been supporting BTC around $65,000, while rising U.S. Treasury yields have been holding back big gains beyond $75,000.

But another factor appears to have been quietly keeping bitcoin trapped in its range, and it’s tied to investors using call options to generate additional yield on top of their spot market holdings.

“Throughout Q1, institutional participants have been systematically overwriting calls at higher strikes to harvest premium in a down/sideways market. That activity transferred significant gamma exposure to dealers, who have been hedging by buying into dips and selling into rallies to maintain delta neutrality,” James Harris, CEO at Tesseract, the MiCA-licensed, multi-strategy digital asset manager.

Options are derivative contracts that give you the right to buy or sell the underlying asset, in this case, BTC, at a preset price at a later date. A call option gives the right to buy and represents a bullish market bet. A put option offers protection against price slides in BTC.

Think of it like reserving a concert ticket today for a small fee. You can buy it later at the reserved price, even if the ticket goes up, or sell your reservation to someone else for a profit. The ticket seller, meanwhile, keeps the small fee.

That’s essentially what traders have been doing—they’ve become the ticket sellers. By selling call options, they collect premiums (the fee) while covering the call buyer on potential BTC price rallies. And they do this against their existing bitcoin holdings. That’s called the covered call strategy, a way of generating additional yield on top of spot holdings.

Now you might be wondering: what does this have to do with bitcoin’s range play? The answer lies in knowing that traders have been shorting, or selling, these calls to market makers – the firms that take the other side of these option trades.

By selling these calls, traders have left market makers with a position called positive gamma, which essentially means the market makers are forced to buy BTC as prices fall and sell BTC as prices rise to stay hedged. The result? A range-bound price action.

In other words, yield hunting by investors has been indirectly influencing market inflows in ways that limit price swings.

This also explains the decline in the bitcoin 30-day implied volatility index, BVIV, which stands in contrast to spikes in similar indices tied to equities, bonds and oil. The BVIV has declined 5% to 56% this month.

“The effect has been a mechanical suppression of realised volatility — the DVOL index has compressed by roughly six points this week despite the macro backdrop,” Harris said.

Lido DAO’s decentralized autonomous organization is weighing a one-off $20 million buyback of its governance token, LDO, in a bid to address a pronounced price dislocation relative to Ether. The plan would swap 10,000 stETH tokens from the treasury for LDO, with proponents arguing that the governance token is undervalued given the protocol’s fundamentals.

The proposal, submitted on Friday, outlines a staged approach: the treasury would acquire up to 10,000 stETH in smaller batches of 1,000 and swap each batch for LDO. Lido argues this move could restore alignment between LDO’s market price and the underlying health of the protocol, a gap it says has widened to historically large levels. As part of the process, each batch would require tokenholder approval, and results would be reported before the next tranche proceeds.

“This is not a routine fluctuation. It represents one of the most significant dislocations between LDO’s market price and its underlying protocol fundamentals in the token’s history.”

The time to act comes as LDO sits at an extended discount to Ether. Lido DAO notes LDO trades at about 0.00016 ETH, roughly 63% below its two-year median. At the same time, Lido remains the dominant force in Ethereum’s liquid staking market, holding about 23.2% of staked Ether, according to Dune Analytics data. That leadership has not come without controversy; previous assessments flagged the potential centralization risks tied to a single protocol’s dominance in securing a large share of the network’s staking.

Price and market metrics underscore the scale of the challenge. LDO is currently trading around $0.30, down about 95.9% from its peak near $7.30 in August 2021. Its market capitalization sits near $255 million, placing it around the 141st-largest token by value. The plan’s proponents argue that the proposed buyback could shore up sentiment by demonstrating active governance-driven capital allocation tied to the protocol’s real-world performance.

Key takeaways

• The Lido DAO proposal would execute a one-off $20 million buyback by swapping up to 10,000 stETH from the treasury for LDO, in batches of 1,000 stETH each, using limit orders or dollar-cost averaging to manage volatility.
• Approval for each batch would be required from tokenholders, and results would be disclosed after every tranche before proceeding.
• LDO trades at a steep discount to ETH (approximately 0.00016 ETH per LDO, about 63% below the two-year median), despite Lido’s leadership in Ethereum’s liquid staking sector.
• Lido’s dominance has been cited in the past as a potential centralization risk for the network, though the current governance move focuses on price alignment and treasury management.
• Revenue and fee dynamics in 2025 show Lido’s take rate rising to 6.1% even as staking fees declined, with total staking revenue dipping amid a broader market retrenchment.

Mechanics, governance, and investor considerations

The proposed buyback plan hinges on a staged governance process. If approved, Lido would execute batches of 1,000 stETH each, swapping them for LDO until the 10,000-stETH target is reached. The strategy emphasizes price discipline: Lido intends to use limit orders or a dollar-cost averaging approach to smooth entry and avoid abrupt price moves. Each batch would require a new round of tokenholder approvals, and the DAO would report results after every step to maintain transparency and accountability.

The broader context includes a look at Lido’s earnings trajectory. In 2025, Lido’s revenue declined by about 23% to roughly $40.5 million, driven largely by a drop in staking fees to about $37.4 million. Despite the revenue dip, the protocol’s take rate—defined as the percentage of staked ETH rewards retained as fees—improved from about 5% to just over 6% in 2025. Lido argues that the core fundamentals remain robust even amid a wider market pullback and a 13% cost improvement in 2025 versus 2024.

The idea of a buyback is not entirely new within Lido’s ecosystem. In November, a member proposed an automated buyback mechanism to support LDO’s price, but that proposal has not been implemented. The current plan reframes the concept as a one-off, governance-driven initiative tied directly to the treasury’s assets and the DAO’s long-term interests.

Implications for holders and the broader ecosystem

If the proposal advances, the immediate effect could be a temporary lift in LDO’s trading dynamics, especially if the market interprets the buyback as a signal that the DAO is willing to put treasury-backed resources toward balancing token price with protocol fundamentals. For investors, the move highlights a visible attempt to align incentives between token economics and the platform’s operational strength, particularly given Lido’s entrenched position in Ethereum staking and its influence on validator economics.

However, the plan also introduces governance risk and execution risk. The need for multiple rounds of tokenholder approvals means outcomes will be contingent on community sentiment and turnout. Moreover, the market’s reaction will hinge on how the buyback intersects with broader SEC-like scrutiny, market liquidity conditions, and the pace at which LDO could absorb new supply without dampening demand for the token’s governance role.

Looking ahead, observers will be watching whether the DAO proceeds with the proposed schedule, how each batch performs relative to market conditions, and whether this approach invites further debates about token economics, centralization concerns, and the resilience of Ethereum’s staking architecture as it evolves post-merge.

Readers should monitor Lido DAO’s governance votes and the market’s reaction to any announced results from each tranche, as these steps will illuminate how the community weighs treasury-backed interventions against the need to maintain decentralization and protocol integrity in a challenging macro environment.

The war just got bigger. Bitcoin briefly got smaller.

Bitcoin dipped to $65,112 early Monday morning, its lowest level since the February crash, before recovering to $67,402 as Asian markets opened.

The 24-hour range of $65,112 to $67,389 reflects a market that sold hard on overnight escalation headlines and found buyers near $65,000, a level that hasn’t been tested since the war’s opening weekend five weeks ago.

Ethereum recovered 2% to $2,044, Solana gained 0.9% to $83.48, and XRP added 1.4% to $1.35. The 24-hour green across the board masks a rougher weekly picture though. BTC is still down 1% on the week, ETH 0.9%, XRP 1.9%, and SOL 3.7%. Tron is the one name sitting in green, up 2.6% in a day and 4.6% on the week, quietly outperforming the entire majors complex.

The escalation this time came from multiple directions simultaneously. Iran-backed Houthi forces entered the conflict, opening a new front beyond the direct U.S.-Israel-Iran theater. Additional U.S. troops arrived in the Middle East, fanning fears of a ground operation.

The Wall Street Journal reported Trump is weighing a military operation to extract uranium from Iran, though no decision has been made. And Iran attacked two aluminum production sites in the region, sending the metal up as much as 6% and extending the war’s economic damage beyond oil and into industrial commodities.

Brent crude rose 2.5% to around $115 a barrel, now up roughly 90% year-to-date. Asian equities fell sharply, with South Korea’s benchmark down 3.2% on a technology stock selloff and Japan’s Nikkei dropping 3.4%. S&P 500 futures pared losses and were trading roughly flat, suggesting some stabilization after the initial reaction.

The $65,112 low matters technically. That level is within range of the $64,000 low from Feb. 28, the day the war started. Bitcoin has spent five weeks building a pattern of higher lows on each escalation, from $64,000 to $66,000 to $68,000 to $69,400 to $70,596.

Monday’s dip below $66,000 is the first time in weeks the floor has moved lower rather than higher. Whether it recovers and re-establishes the uptrend or marks the beginning of a break below the range that has held since the war began is the question for the rest of the day.

Meanwhile, oil at $115 and aluminum spiking on direct attacks on production facilities means the inflationary impact is broadening beyond energy into industrial supply chains. That makes the Fed’s position even harder and the rate cut timeline even more distant.

A Polymarket trader turned $676 into $67,608 on Saturday by capitalizing on a rare mistake during a UFC heavyweight bout, where the wrong fighter was initially announced as the winner. 

The trader, known as LlamaEnjoyer on Polymarket and Verrissimus on X, watched the live fight between Tyrell Fortune and Marcin Tybura and suspected that a mistake may have been made when UFC presenter Bruce Buffer announced Tybura as the winner.

During that time, Polymarket shares for Fortune fell to one cent, and LlamaEnjoyer was able to place the $676 bet moments before Buffer corrected himself and declared Fortune the winner. 

LlamaEnjoyer profited roughly $67,000 from the UFC’s brief blunder, allowing him to capture a near 100x return.

The incident shows the speed at which odds on prediction markets can whipsaw during live events. 

Related: NYSE parent ICE completes new $600M investment in Polymarket

LlamaEnjoyer almost lost $100,000 initially

Speaking about the incident, the Polymarket trader said they almost put $100,000 on Tybura at 99 cents, presumably once the initial decision was made before realizing that something “was off.”

“Cancelled my order, scooped up 1c shares instead. the UFC corrected the winner seconds later. easiest 100x ever.”