- Rise in Bitcoin and Ethereum Volatility
- Increase in Implied Volatility
- Cryptocurrency Market and Major Exchanges
September marked a sharp rise in volatility in the cryptocurrency market, according to data from crypto analytics provider Kaiko.
Rise in Bitcoin and Ethereum Volatility
According to Kaiko, Bitcoin (BTC) and Ethereum (ETH) showed significant increases in their 30-day volatility levels in September. Bitcoin’s volatility rose to 70%, nearly doubling last year’s levels and approaching the peak observed in March 2023 when BTC reached its all-time high. Ethereum’s volatility surpassed both March levels and BTC’s current volatility, marking a notable departure from historical trends.
Increase in Implied Volatility
Forward-looking indicators such as implied volatility (IV) also showed an increase for BTC since early September. Short-term option maturities witnessed the sharpest increase in implied volatility, with September 13 maturities jumping from 52% to 61%. In such scenarios, risk managers may consider reducing market risk to avoid potential losses.
Cryptocurrency Market and Major Exchanges
Despite market turbulence, there is a surge in activity, particularly in the Bitcoin market. Bitcoin’s cumulative trading volume in the first eight months of 2024 is nearing $3 trillion, up nearly 20% from its 2021 peak. The market share of major US crypto exchange Coinbase eroded over the summer, falling from 53% in June to 41% in early September. New exchange Bullish benefited the most from this shift, nearly doubling its market share from 17% to 33% during the same period.
The rise in cryptocurrency market volatility in September highlights increased uncertainty and tension among investors. Paying attention to forecasted changes and strategic risk management becomes crucial in such a market environment.
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