Jenny will discuss developing crypto-linked investment products in a bear market, the mood among her clients and her lon...For the first time in nearly two years, crypto options traders are implying that the largest cryptocurrency, bitcoin , will be more volatile than ether , the second-largest and the native token of the Ethereum blockchain.
Implied volatility refers to the options market's expectations for price swings over a specific period. Options are derivatives contracts that offer the purchaser the right, but not the obligation, to buy or sell the underlying asset at a predetermined price on or before a specific date. Spread between the 30-day implied volatilities for ether and bitcoin has flipped negative. Deribit's DVOL measures the implied volatility for bitcoin and ether. this month, complicating the Federal Reserve's fight against inflation and boosting demand for bitcoin as a haven. The leading cryptocurrency has gained over 20% since the start of March, outperforming ether's 11%, CoinDesk data show.
"The negative spread is reflective of the two assets increasingly viewed as similar yet different proxies of risk, both markets are much deeper and liquid than the rest of the coins with established use cases," Patrick Chu, director of institutional sales and trading at over-the-counter crypto derivatives tech platform Paradigm, told CoinDesk.Implied volatility is mean-reverting, meaning that over time it tends to return to its lifetime average.
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