Bitcoin is currently experiencing its lowest implied volatility in almost two years, despite being at all-time highs, while Ethereum maintains higher volatility levels. Institutional participation is a key factor, with Bitcoin ETFs holding about $154 billion compared to Ethereum's $15.3 billion. This institutional flow fosters deeper price support and a more stable derivatives ecosystem for Bitcoin. In contrast, Ethereum's activity reflects a strong reliance on retail trading and yield-driven strategies, contributing to its heightened volatility.
Despite Bitcoin trading at all-time highs, its implied volatility has fallen to the lowest level in almost two years, indicating less market reactivity.
Bitcoin enjoys deeper structural price support due to institutional participation, reflected in ETF adoption, which is around 10-times deeper than Ethereum's.
The dominance of institutional trading in Bitcoin futures contributes to its reduced volatility, contrasting with Ethereum's reliance on retail-driven trading.
Ethereum continues to experience high yield-driven activity through DeFi protocols, maintaining its elevated implied volatility amidst Bitcoin's stability.
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