Stay ahead with expert insights on cryptocurrency derivatives markets, featuring institutional research from Block Scholes.
Key Market Observations
While volatility has risen for both Bitcoin (BTC) and Ethereum (ETH), their derivatives markets reveal diverging trends:
- Volatility Term Structure: Shorter tenors now show inverted volatility, with ETH options trading at a premium vs. BTC.
- Skew Dynamics: Call options dominate for both assets, signaling bullish sentiment—stronger for BTC despite ETH’s spot ETF approval.
- Implied Yields: Futures and perpetual swap funding rates reinforce BTC’s bullish positioning.
ATM Implied Volatility (1-Month Tenor)
BTC Options Highlights
- SVI ATM Volatility: Short-tenor volatility surged above 50%, flattening the term structure.
- 25-Delta Risk Reversal: Skew shifted from puts to calls, mirroring spot price movements.
👉 Explore real-time BTC derivatives data
ETH Options Highlights
- SVI ATM Volatility: Consistently higher than BTC’s but with less front-end rally.
- 25-Delta Risk Reversal: Similar call skew but less extreme than BTC’s recent swings.
Market Composite Analysis
Volatility Surfaces
- Listed Expiry Smiles: Reveals demand for OTM calls across tenors.
- Constant Maturity Smiles: ETH’s premium persists mid- to long-term.
FAQs
1. Why is BTC more bullish than ETH in derivatives?
BTC’s institutional demand and "digital gold" narrative drive stronger futures and options activity, even post-ETF approvals.
2. How does volatility inversion affect traders?
Inverted short-tenor vols imply higher hedging costs for near-term positions—critical for arbitrage strategies.
3. What’s driving ETH’s volatility premium?
ETH’s ecosystem developments (e.g., DeFi, upgrades) add uncertainty, while ETF flows remain a nascent factor.
👉 Dive deeper into crypto derivatives strategies
Disclaimers
- Not financial advice. Crypto markets are highly volatile.
- Past performance ≠ future results. Conduct independent research.
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