Taking the opportunity to revive this excellent thread
As some followers of Bitcoin options surely already have seen, the BitVol (implied volatility based on option prices) is currently on record low values of 36-39. The previous low was about 43 in January 2023. This means that options are currently very cheap, people seem not to expect much volatility for the short term. I've created
a thread in the Speculation forum about this, but it's only marginally getting the kind of attention I'd desired (it gets some attention, but mainly from low-quality posters).
There's an opinion article of
Glassnode's newsletter which argues that volatility could currently be mispriced, i.e. options being cheaper as they should be. According to Glassnode's article, "volatility premiums [are] trading at less than half the 2021-22 baseline". Also BTC derivatives in general have hit an all time low in terms of trade volume - at least BTC derivatives dominance seems to be trending up, so altcoin derivatives are even seeing lesser volume.
Regarding options only, trade volume seems to have grown up to April/May (like seen in the last post), but then starting with the tight sideways markets have hit quite significant lows (although not all-time lows). And even longer-term options contracts (e.g. for mid-2024) have low volatility premiums.
What do option experts think? Is the market really thinking we're about to see a long sideways market or is there some flaw in the current option pricing like Glassnode suspects? (It doesn't seem to be only a "summer" phenomenon, as in 2022 the situation was quite different).
