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Bitcoin's Implied Volatility Reaches 2021 Peak Amid Elon Musk Drama

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Mon, 05/17/2021 - 14:57
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Alex Dovbnya
With Elon Musk pulling the strings, the options market expects Bitcoin to become more turbulent
Bitcoin's Implied Volatility Reaches 2021 Peak Amid Elon Musk Drama
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Bitcoin's implied volatility spiked to its highest level in 2021 over the weekend after a series of tweets by Tesla CEO Elon Musk caused a ruckus within the cryptocurrency community, according to data provided by Skew.

The mercurial centibillionaire came up with a scaling proposal for Dogecoin, criticized Bitcoin's alleged centralization, called out "obnoxious" Bitcoiners, implied that Tesla might have sold all of its Bitcoin and then clarified that that was not the case the day after tanking the market.

One-week implied volatility for Bitcoin has now spiked to a whopping 146.5 percent.

Implied volatility

The largest cryptocurrency dropped to its lowest level since Feb. 8 earlier today before clawing back some of the losses. It is currently trading at $44,778 on the Bitstamp exchange.

As

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More turbulence ahead?

Implied volatility, as the name suggests, reflects the options market's expectations regarding how volatile Bitcoin is going to be over a certain period of time.

The recent spike suggests that traders expect the roller coaster ride to continue. On the other hand, falling implies volatility portends sideways price action.

Following Bitcoin's pandemic-induced 50 percent crash on March 13, implied volatility soared 50 points and went on to reach its highest level since Skew started recording it together with the Cboe Volatility Index.

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About the author

Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets, can be contacted at alex.dovbnya@u.today.