By Omkar Godbole (All times ET unless indicated otherwise)
As the cryptocurrency rally gains momentum, ether has widened its lead over bitcoin regarding volatility expectations. This shift indicates increased activity not only in the second-largest cryptocurrency but also throughout the digital asset market.
Recent data from TradingView reveals that Deribit’s ether implied volatility index (ETH DVOL), which tracks 30-day expected price fluctuations, has surged by 11% to an annualized rate of 7% this week. In contrast, bitcoin’s equivalent (BTC DVOL) has remained relatively stable near multi-month lows at approximately 45%. This discrepancy has expanded the volatility spread between the two assets to 27%, marking the widest difference in two years. Such trends suggest that traders are anticipating heightened volatility in ETH and the general altcoin market.
Notably, some observers attribute ETH’s recent deflationary status to the Pectra upgrade implemented this week, which has accelerated on-chain activities, resulting in over 38,000 ETH being burned in just 24 hours. As a proactive strategy, market participants have begun purchasing higher strike ETH calls on Deribit, betting on continuous price appreciation.
We may soon witness the onset of an altcoin season as the BTC dominance rate shows signs of ending its five-month-long uptrend.
In notable industry news, American fast-food chain Steak ‘n Shake announced on Thursday that it will accept bitcoin as a payment option in U.S. locations starting May 16, allowing its 100 million customers to utilize the world’s largest digital asset. Additionally, T-Rex, a Web3 consumer entertainment platform, raised $17 million in pre-seed funding, indicating ongoing investment enthusiasm in the cryptocurrency space.
Meanwhile, Coinbase has made headlines by agreeing to acquire Deribit, the world’s largest crypto options exchange, for a staggering $2.9 billion in cash and shares, underscoring significant M&A activity within the crypto industry. This acquisition allows Coinbase to offer a comprehensive suite of both spot and derivative products, enhancing liquidity on its platform.
Key Market Events to Monitor
- Crypto:
- May 12, 1 p.m.-5:30 p.m.: U.S. SEC Crypto Task Force Roundtable on “Tokenization: Moving Assets Onchain: Where TradFi and DeFi Meet” at the SEC headquarters.
- May 13: Singapore High Court hearing regarding Zettai, parent company of WazirX, and its plans to restart the India-based crypto exchange.
- May 14: Neo mainnet will undergo a hard fork network upgrade at block height 7,300,000.
Acknowledging Market Dynamics
The performance of various cryptocurrencies emphasizes the evolving nature of digital asset investments. Monitoring developments in the volatility indices, regulatory discussions, and major corporate acquisitions is crucial for stakeholders in the cryptocurrency market. As markets mature, opportunities continue to arise, making it imperative for investors and enthusiasts to stay informed on the latest trends and movements.
