Bybit Crypto Derivatives Report Reveals Insights into Market Volatility and Options Expiration
DUBAI, UAE, Dec. 26, 2024 — Bybit, recognized as the world’s second-largest cryptocurrency exchange by trading volume, has released its latest Crypto Derivatives Analytics Report in partnership with Block Scholes. The report uncovers intriguing market dynamics, particularly the subdued market volatility despite significant options expirations occurring on Friday. While realized volatility for BTC and ETH has risen, short-term options have not fully reflected this shift. This suggests that although spot prices are seeing movement, the options market has yet to align with these changes.
A Closer Look at End-of-Year Options Expiration
With over $525 million in BTC and ETH options contracts set to expire on Dec. 27, this end-of-year expiration is poised to be one of the largest to date. Despite this, market expectations for heightened volatility remain modest. The report also highlights a rare inversion in ETH’s volatility structure, which BTC has not mirrored. Additionally, shifting funding rates, occasionally dipping into negative territory as spot prices decline, signal the potential onset of a new market phase. Notably, BTC’s volatility structure has shown limited responsiveness to spot price changes, whereas ETH short-term options are displaying more significant fluctuations.
Key Insights from the Report
BTC Options Activity:
- Over the past month, BTC’s realized volatility has surpassed implied volatility on three occasions, each time returning to relative equilibrium.
- Open interest in BTC options remains robust, contributing to the possibility of increased volatility as the year concludes.
- Approximately $360 million worth of BTC options, including both puts and calls, are nearing expiration, which could influence price movements.
ETH Options Trends:
- ETH’s volatility term structure saw a mid-week inversion but has since stabilized, reflecting levels consistent with the past month.
- Calls continue to dominate ETH options open interest as 2024 ends, although trading activity is leaning more toward puts.
About Bybit
Bybit is a global leader in cryptocurrency trading, ranking as the second-largest exchange by trading volume and serving over 60 million users worldwide. Since its establishment in 2018, Bybit has been on a mission to create a more inclusive, transparent, and innovative decentralized ecosystem. With a strong focus on Web3, Bybit collaborates with leading blockchain protocols to deliver cutting-edge infrastructure and drive on-chain advancements. Known for its secure platform, diverse offerings, user-friendly interface, and advanced tools, Bybit bridges the gap between traditional and decentralized finance (TradFi and DeFi). Discover the next generation of decentralized finance at Bybit.com.