Gate Research: BTC Volatility Consolidates at High Levels, Divergence Emerges in Hedging Demand

Options Market Developments

Recent data shows BTC implied volatility (IV) at 48.6% and ETH IV at 70%, both down from last week, reflecting a moderation in expected future volatility. In terms of skew dynamics, the 25-Delta Skew for BTC and ETH steepened sharply around December 1, with the 7D structure dropping to nearly -9 vol, signaling rising short-term hedging demand. Meanwhile, BTC’s longer-dated skew steepened significantly, indicating stronger demand for medium- to long-term downside protection. In contrast, ETH’s longer-dated skew remained relatively stable, suggesting no parallel increase in demand for downside hedges.

BTC’s realized volatility (RV) has fallen to around 52%, while its volatility risk premium (VRP = IV − RV) has turned from negative to positive and is oscillating near the zero line. This indicates that implied volatility is converging toward realized volatility, with expectations for future volatility returning to a neutral range. ETH’s RV has declined to around 72%, with VRP also near zero.

Block Trade Structure

In the BTC and ETH options markets, dominant block trades this week were primarily bullish diagonal calendar spreads. The largest trades were:

• BTC: Buy BTC-51225-75000-P, totaling ~1,200 BTC, with premium spent of approximately $270,000.
• ETH: Buy ETH-51225-3100-C, totaling ~25,000 ETH, with premium spent of roughly $340,000.

Platform Updates

Gate continued to expand its derivatives offering, adding options trading for HYPE, SUI, and BNB. The platform now supports 11 major assets—including BTC, ETH, SOL, and DOGE—for USDT-settled options. With full support on both web and mobile interfaces, users can flexibly allocate positions across multi-asset, multi-tenor structured products, enhancing efficiency in both hedging and strategy construction.

More Details: https://www.gate.com/options/BTC_USDT