Gate Research Institute: BTC Volatility Fluctuates at High Levels, Divergence in Hedging Demand

2025-12-03 05:20:03

Options Market Update

Latest data shows BTC implied volatility at 48.6% and ETH at 70%, both having declined from last week, reflecting a weakening in market expectations for future volatility.

From the skew structure perspective, both BTC and ETH 25-Delta Skew saw a brief steepening around December 1, with the 7D structure dropping to about -9 vol at one point, indicating an increase in short-term hedging demand. Meanwhile, BTC’s long-dated Skew steepened significantly, showing stronger hedging interest against medium- and long-term downside risks. In contrast, ETH’s long-dated skew remained relatively stable, with no simultaneous surge in downside protection demand.

BTC’s realized volatility (RV) has dropped to around 52%, while the volatility risk premium (VRP = IV − RV) turned from negative to positive and hovered near the zero axis, indicating that implied volatility (IV) is gradually aligning with actual volatility and market expectations for future volatility are returning to a neutral range. ETH’s RV fell to about 72%, with VRP near the zero axis.

Block Trade Structure

This week in the BTC and ETH options markets, block trades were dominated by bullish diagonal calendar spreads. The largest block trades for BTC and ETH were as follows:

BTC: Bought BTC-51225-75000-P, with a total volume of approximately 1,200 BTC and a premium outlay of about $270,000.
ETH: Bought ETH-51225-3100-C, with a total volume of approximately 25,000 ETH and a premium outlay of about $340,000.

Platform Updates

Additionally, Gate has further expanded its derivatives offerings, adding options trading for HYPE, SUI, BNB, and other tokens. The platform now covers USDT-settled options for 11 major assets, including BTC, ETH, SOL, and DOGE, providing the market with a richer toolkit. With full support for both web and app, users can flexibly allocate positions across multi-asset and multi-tenor structured products, enhancing risk hedging and strategy-building efficiency.

Trade details: https://www.gate.com/options/BTC_USDT

BTC-1.93%

ETH-1.56%

HYPE-7.87%

SUI-2.62%

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