Bitcoin derivatives market volatility increases ahead of Trump’s inauguration

PANews reported on January 15 that, according to The Block, as the US president-elect prepares to hold his second inauguration on January 20, the Bitcoin derivatives market shows an expected increase in volatility. Derive.xyz data shows that Bitcoin’s mid-term outlook shows bearish signs, with the share of put options in open contracts increasing to 40%, a sharp rise within a week. Sean Dawson, director of research at Derive.xyz, noted: “This is a significant increase from last week’s 20%, suggesting traders are hedging against possible downside risks as Trump’s inauguration approaches.”

Bitcoin’s implied volatility has climbed and market uncertainty has intensified. In the past week, Bitcoin's seven-day parity implied volatility increased by 3% to 56.5%, and its 30-day implied volatility also increased by 1.5% to 57.5%. Dawson said these trends reflect growing expectations that Bitcoin prices could be volatile in the days leading up to Inauguration Day. Ethereum traders have stronger expectations for volatility. In the past 24 hours, Ethereum's seven-day implied volatility surged 6% to 74%, and the 30-day implied volatility climbed 2.5% to 69.5%. Dawson explained: “Ethereum traders expect greater spot volatility, which may be related to Ethereum’s high sensitivity to macroeconomic changes and more speculation about the direction of post-inauguration policy.”

Derivatives market activity has increased significantly, with Bitcoin options open interest surging to $237 million in the past 24 hours and increased trader participation. Dawson added: “With 38% of Bitcoin call option contracts bought and 37.3% of put option contracts bought, traders are clearly preparing for increased volatility, especially with Inauguration Day approaching. This kind of volatility in the market "