Bitcoin Volatility Spike May Signal 'Resumption of Flow' in Options-Driven Prices

It has been reported that an environment is reshaping that could potentially see significant movements in both directions in the virtual currency market.
It has been reported that the price volatility of Bitcoin (BTC) has increased significantly, and that option-driven price movements, which have weakened since the introduction of exchange-traded funds (ETFs), may return.
According to Jeff Park, a market analyst at investment firm Bitwise, after the Bitcoin ETF was approved in the United States,
The intrinsic volatility of Bitcoin has never exceeded 80%. However, the chart he shared shows that Bitcoin's intrinsic volatility has now risen again to around 60%.
In January 2021, he commented on Bitcoin's explosive price movement, saying, "This period kicked off the 2021 bull market, peaking at $69,000 (approximately 10.82 million yen) in November."
"Ultimately, the decisive price movement that will drive Bitcoin to a new high will be driven not only by physical inflows but also by option inflows," he said.
"For the first time in nearly two years, volatility may be showing signs that Bitcoin is once again becoming an options-driven asset," he said.
This analysis contradicts conventional theory that ETFs and institutional inflows have permanently reduced Bitcoin's volatility and transformed the asset's structure into a more mature one.
Binance CEO Richard Teng said, "Bitcoin's high volatility is contributing to the general volatility currently seen across all assets."
Bitcoin plummeted below $85,000 on the 20th, raising concerns that a short-term bear market could be prolonged.
Some have warned that this could be the start of a bear market for Bitcoin. The reasons for the current decline include liquidation of overly leveraged positions in the derivatives market, a gap between long-term holders, and a combination of factors.
A variety of factors have been cited, including profit realization and macroeconomic pressures. Analysts at cryptocurrency exchange Bitfinex said, "This correction is due to short-term factors.
"It's more like a tactical rebalancing," he said, explaining that it's not due to the departure of institutional investors or a lack of demand. Analysts believe that such a correction is a reflection of Bitcoin's long-term fundamentals and price stability.
He emphasized that the possibility of a rating upgrade is not a factor that will shake the trend of institutional adoption.