Bitcoins Volatility Drops as Institutions Cash In on Options TradingIn 2025, Bitcoins market experienced a calmer year due to institutions using derivatives to generate extra income from their idle coin holdings. The leading cryptocurrencys annualized thirty-day implied volatility decreased, as indicated by indexes like Volmexs BVIV and Deribits DVOL. These indexes started the year around 70% and ended near 45%, dropping as low as 35% in September.Institutions sold call options on top of their spot bitcoin or exchange-traded fund positions to harvest yield, similar to selling lottery tickets. This strategy involved grabbing an upfront premium and keeping the cash if the option expired worthless. Out-of-the-money calls, those higher-strike bullish bets, were focused on, pocketing easy premiums during flat price action.The increased supply of covered call selling pushed volatility lower, with more than 12.5% of all mined bitcoin now in exchange-traded funds and treasuries, generating no natural yield. Call overwriting became the preferred strategy throughout the year.Bitcoin options trading evolved to resemble traditional markets, with puts trading at a premium to calls for most of 2025. This put skew signaled sophisticated players hedging their long positions, not bearish bets, pulling Bitcoin closer to Wall Street norms. Checkout Solipillow.com

The Daily News Now! — Every city. Every story. AI-powered.

---

Hosted on Acast. See acast.com/privacy for more information.