Thinking about the last couple of months, Bitcoin Options has been discussed massively in many debates and has heated up the options market. Bitcoin options pricing charts reveal that over the last three months, the implied volatility has dropped from 3.5 % to 3.2% in the last week. This doesn’t look good.
Bitcoin options massive interest comes from the fact that popular exchanges like Bakkt and Deribit launched their Bitcoin options contracts. Bakkt was the first to do so, in December while Deribit followed in February. Also, Bitcoin’s tremendous rise since New Year’s eve, by 35%, and crossing the $10,000 mark has also contributed equally to the cause.
Bitcoin options pricing and other factors
Deribit’s stats report that the Open Interest reached its all-time high at $855 million. However, it is being bothered by the drop in the volatility. As a result, the all-time high price of $855 million fell down by more than 16% to $710 million.
However, there are some good signs featuring too. Open Interest has increased by more than 200% considering the year-to-date frame, which is considered to be a huge gain. But again dropping down by 16% is the second heaviest hit of this year.
Bitcoin’s price drop this week from $10000 mark to $9500 also saw the volume bleeding profusely. On Tuesday, 18 February, Deribit reports that Bitcoin Options volume was soaring at $113 million and by the end of the week, it went down by 75% to just $28 million. The volume seems to be going down consistently.
To measure the implied volatility of Bitcoin and its related assets, Bitcoin options pricing is used, which has given some worrying data. The sudden price drop is said to be the major reason for the problem. It is often said that gaining at the time of volatility is only for the short-term and that proves to be right in this very case.
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