Everyone’s awaiting U.S. inflation figures, but bitcoin traders couldn’t care less
There’s a wide gap between how experts are viewing Friday’s inflation data and how the bitcoin market is pricing in the impending figures.
What to know:
- Bitcoin traders are pricing in only a 2.5% move around Friday’s U.S. inflation report, signaling a potential non-event.
- Implied volatility in bitcoin has dropped to its lowest since January, even as March CPI is expected to hit 3.4% amid an Iran war–driven energy shock.
- Analysts say each inflation reading could sway Fed rate-cut expectations and bitcoin’s next move, highlighting a gap between expert concerns and market pricing.
“The bitcoin market is currently pricing in just a 2.5% swing in either direction on the back of the inflation data,” Markus Thielen, founder of 10x Research, told CoinDesk in an email. These probabilities are derived from options and derivatives pricing, which reflect traders’ expectations of how much Bitcoin could move over a given time frame.
A 2.5% swing is well within bitcoin’s recent average volatility, indicating that the market isn’t expecting any major directional moves from the inflation data.
The market calm is also evident in the widely tracked 30-day implied volatility, represented by the BVIV index, which has dropped to 46.5%, the lowest since Jan. 31, according to data source TradingView.
This translates to an expected daily move of about 2.9%, which is well below the 30-day average of 3.4%. Implied volatility is determined by demand for options, or hedging bets, and represents traders’ expectations for price swings over a specific period.
