Matrixport Research: BTC volatility is approaching multi-year lows, options may be the ideal investment method currently

Matrixport Research Institute's latest study shows that recent focus points are:

• The realized volatility of BTC is approaching multi-year lows, making options investment attractive at this time.

• The SEC is likely to approve S-1 applications, leading to a surge in ETH spot holdings.

• BTC options trading is showing bullish sentiment, with market expectations for a rise in 2025 heating up.

The market has entered a summer consolidation phase, and the decline in volatility allows investors to purchase options at a lower cost without taking on excessive market risk. The demand signal for fiat-to-cryptocurrency exchanges has weakened, indicating a potential period of calm, while the fear of missing out (FOMO) sentiment is relatively low. Therefore, investors should adopt a rational positioning strategy.

The realized volatility of BTC is approaching multi-year lows, making options investment attractive at this time

The realized volatility of Bitcoin is nearing multi-year lows. A year ago, when volatility dropped to similar levels, Matrix on Target suggested that investors could use options to express their views while allocating most of their crypto assets into stablecoins backed by stable government bonds.

The SEC is likely to approve S-1 applications, leading to a surge in ETH spot holdings

As of May 23, the SEC has officially approved 19b-4 applications submitted by eight asset management companies. These companies are applying to list and trade Ethereum ETFs on U.S. exchanges, but the S-1 registration statement has not yet been completed. Consequently, the open interest in Ethereum futures surged from $7.5 billion to $13 billion, with the funding rate annualized at 27%.

While the best market periods often occur just before products are launched (or listed) and are about to receive SEC approval, sell-offs are often seen after products are launched, as evidenced by the Bitcoin futures launch in December 2017, Coinbase IPO in April 2021, futures-based Bitcoin ETF in October 2021, and the Bitcoin spot ETF in January 2024.

However, the market believes the SEC will soon approve S-1 applications, and the ETH ETF will be listed between July and September this year. Once the summer consolidation period ends, the market will welcome another bullish trend. Cautious investors can use the low volatility environment to protect their portfolios with options or purchase call options to gain strategic upside while taking advantage of "risk-free" returns from exposure to mainstream cryptocurrencies.

BTC options trading shows bullish sentiment, diverging from BTC price trends

BTC has fallen over 1% in the past 24 hours to $64,500 (data as of 2 PM on the 21st). However, QCP Capital noted that a significant amount of options with expiration dates in December and March, with strike prices between $90,000 and $100,000, were purchased in the last 24 hours, indicating that the market is bottoming out and preparing for a potential rebound that could last until 2025. The bullish sentiment in the options market diverges from Bitcoin's price trends, especially in the long-term market, showing investors' expectations for future price increases.

The above views are partly from Matrix on Target, contact us for the complete report from Matrix on Target.