Bitcoin volatility is in meltdown, but downside protection still commands a premium
Bitcoin’s BVIV volatility index hit the lowest level since 2025 as option demand collapsed. Still, overwriting surged and downside protection stayed pricey.
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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.
