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Ethereum Options Volatility Surges Past Bitcoin in Five-Year High Divergence: Report

Ethereum Options Volatility Surges Past Bitcoin in Five-Year High Divergence: Report

DeFi PlanetDeFi Planet2025/06/17 16:00
By:DeFi Planet

A new report from crypto exchange Bybit and analytics firm Block Scholes reveals a sharp divergence in options market volatility between Ethereum (ETH) and Bitcoin (BTC), with ETH significantly outpacing BTC throughout May.

A new report from crypto exchange Bybit and analytics firm Block Scholes reveals a sharp divergence in options market volatility between Ethereum (ETH) and Bitcoin (BTC), with ETH significantly outpacing BTC throughout May. 

The ETH-to-BTC implied volatility ratio for seven-day options surged past 2.0 by mid-May, marking its highest level since 2020. This suggests traders were pricing ETH options with more than double the expected volatility of BTC, highlighting a surge in risk appetite and speculative positioning around Ethereum.

 

PRNewswire, PRNewswire, 17th June 2025, Chainwire https://t.co/oTlZjSZKLA

— Cryptomode (@cryptomode) June 17, 2025

This volatility gap emerged alongside a strong price rally in ETH, which soared over 23% intraday on May 8, fueled by optimism following positive U.S.-U.K. trade developments. In comparison, Bitcoin posted a more modest 10% gain during the same period. Despite Ethereum’s momentum, it still trades more than 50% below its January 2025 peak, indicating that volatility is being driven more by short-term sentiment than sustained recovery.

At the beginning of the month, the volatility ratio hovered around 1.5 before sharply escalating as BTC’s implied volatility dropped below a 35% threshold, a level it had maintained for 19 consecutive months. This breakdown marked the end of a long-standing stability trend for Bitcoin, while Ethereum’s short-dated options remained persistently elevated.

Reinforcing this trend, realised volatility data showed ETH consistently outpacing BTC across various durations. The seven-day realised volatility ratio peaked on May 15, almost in sync with the spike in implied volatility, suggesting that traders anticipated continued dispersion between the two assets. According to the report, this divergence is part of a broader trend that began in July 2024, indicating Ethereum’s increasing influence in driving crypto market volatility.

Meanwhile, back in January, markets responded with relative restraint following the inauguration of Donald Trump. Despite speculation that the new administration might favour digital assets , a joint Bybit–Block Scholes report noted that the event failed to generate any meaningful shift in crypto market sentiment, underscoring that macro-political events are no longer the sole driver of volatility in this evolving asset class.

 

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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