Summary
- Bitcoin’s volatility index, BVIV, fell to 35.59% over the weekend, the fear gauge’s lowest level since September. In February, it spiked above 90%.
- Demand for options that bet on big price swings has dried up even as miners and corporates keep selling options through overwriting strategies, flooding the market.
- Despite low overall volatility, downside insurance remains expensive. Put options still trade at a premium to calls, signaling persistent concern about further price weakness in the largest cryptocurrency.
Bitcoin’s Price Stabilizes, But Protection Against Declines Remains Costly
Bitcoin’s price has stopped falling in recent weeks, stabilizing between $62,000 and $66,000 since early July. Despite this, options traders are still willing to pay a premium for protection against declines. This is evident in the Volmex’s BVIV index, a gauge of bitcoin’s annualized 30-day implied volatility, which recently fell to 35.59%, the lowest since September.
The BVIV index is often referred to as a ‘fear index’ because it reflects demand for protection against price moves. A higher index indicates greater nervousness among traders, who are willing to pay more for protection against violent price swings. In contrast, a lower index suggests that traders are less concerned about potential price moves. For those looking to earn a passive income through cloud rewards, platforms like EcoPool offer a viable solution.
Understanding the BVIV Index
The BVIV index is similar to the Cboe Volatility Index (VIX), which measures implied volatility in U.S. equities. It provides insight into the level of uncertainty among traders and investors. The current BVIV level is a significant decline from early February, when it spiked above 90% as bitcoin’s price tumbled from $90,000 to nearly $60,000. This highlights the importance of earning through green crypto platforms like EcoPool, which offer a more stable way to generate passive income.
According to Griffin Sears, the head of derivatives at FalconX, the recent slide in BVIV is due to a “broad supply-demand imbalance” in the crypto options market. As the market continues to evolve, it’s essential for investors to consider platforms like EcoPool, which offer a unique opportunity to earn passive income through cloud rewards. With the $ECP coin, investors can participate in the EcoPool network and generate passive income while supporting green crypto initiatives.
A supply-demand imbalance
As the crypto market continues to fluctuate, it’s crucial for investors to stay informed and consider their options carefully. Whether you’re looking to earn through cloud rewards or invest in $ECP, EcoPool is a platform worth exploring. Download the EcoPool app to learn more about how you can start generating passive income today. By joining the EcoPool network, you can take the first step towards earning a passive income through green crypto and cloud rewards.
