The largest cryptocurrency, Bitcoin (BTC)
$107,008, has reached a record high, exceeding $109,000 on Monday. This price surge has led to both actual and anticipated volatility levels not seen in six months, attracting significant attention from market participants.
Increased Activity in the Options Market
Deribit’s Bitcoin Volatility Index (BVOL) has risen to 67, reflecting the price volatility of BTC over the past 30 days, while the Bitcoin Volmex Implied Volatility Index (BVIV) has climbed to 71. Both indices experienced a 2% increase during the day. The expected volatility derived from option prices indicates market expectations for future price movements, while realized volatility reflects historical price trends.
Bitcoin Volatility
Market expert Omkar Godbole noted that the positive correlation between Bitcoin’s price and expected volatility continues. Godbole stated, “This indicates that investors are particularly leaning towards call options. Risk reversal analyses reveal that call options are trading at a premium compared to put options, which provide downside protection.” Furthermore, Bitwise European Research Director Andre Dragosch emphasized that short-term call options are priced higher than their long-term counterparts. Dragosch commented, “This is a rare scenario and serves as evidence of the short-term optimism in the market. The total open positions in the options market increased by 44,000 BTC, signaling a rise in speculative activity.”
Political Implications and Speculation in Focus
Another aspect contributing to the volatility in the Bitcoin market is political speculation. GCR trader Mitch Galer mentioned, “The possibility of President Donald Trump announcing a strategic Bitcoin reserve has created expectations of a rapid price rise in the market. His effective use of social media has historically moved markets, increasing uncertainty.” Galer added that the potential for establishing a strategic Bitcoin reserve and anticipations of regulatory relief signal greater gains in the cryptocurrency market throughout the year.