Bitcoin Option Traders Are Bracing for Uncertainty Following Implied Volatility Surge

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Last Updated on January 10, 2024 by Bitfinsider

According to Gordon Grant, a cryptocurrency derivatives trader, implied volatility increases as more individuals enter the market and purchase options.

“If we analyze the implied volatility rise saw in the illiquid market circumstances over the weekend, we see that demand is outstripping supply. Bitcoin’s spot price was not changing, but options, especially out of the money calls, were bid swiftly higher, with fixed strikes in January rising by more than 10% in implied volatility in some instances, in anticipation of a future event that may occur this week,” Grant told Bitfinsider.

The derivatives trader said that if a spot bitcoin ETF is approved this week, it would be one of the most momentous occurrences in the asset’s history. “The uncertainty is palpable as everyone has a different opinion, some say its a sell the news event, some say it will be the catalyst for a dramatic upswing in prices,” he went on to explain.

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