CBOE Bitcoin (BTC) Futures Reach Record-Low Volatility
Bitcoin (BTC) futures hit record low volatility in October on the US Chicago Board Options Exchange (CBOE), MarketWatch reported yesterday.
Kevin Davitt, a Senior instructor at CBOE Options Institute, published a video on November 1st outlining the volatility decline.
In the video above, Davitt outlines that the average weekly volatility for XBT-CBOE Bitcoin (BTC) futures on the week ending October 26th was just three percent. This is the lowest level of volatility since the futures contracts launched on December 10th, 2017.
As of the first of November, the average weekly XBT high-low range on front-month Bitcoin futures since inception is 15.65%. Since tax day, mid-April 2018, this weekly average had dropped to 10.6%.
“As it turns out, [Bitcoin] XBT futures and cryptos in general are moving with very little speed. The week ending Oct. 26th was the least volatile since futures were introduced nearly a year ago,” Davitt told MarketWatch.
This CBOE Bitcoin (BTC) futures news is a positive one for institutional investors wanting to get into the crypto space, as high volatility is the reason most have stayed away. Even major banks interested in launching their own crypto products have been hesitant due to the volatility and current low-demand for these products.
Former L/S Equities portfolio manager, Travis Kling, pointed out:
Over the last month, BTC and Crypto markets broadly have hung in INCREDIBLY well in the context of traditional asset class stress. Not making a call on whether or not this will continue, just pointing out the recent divergence. pic.twitter.com/gDhYjUORSe
— Travis Kling (@Travis_Kling) October 29, 2018
In October, the stock market plummeted to its lowest day-losses in seven years. Coincidentally, the cryptocurrency market remained solid and didn’t drop with it. One would expect if investors on Wall Street are selling, the panic would have spread to crypto investors, but as seen in the chart above, crypto enthusiasts remained cool, calm, and collected.
This is a positive sign for the industry, as it shows maturity and stability. While crypto assets still remain a high-risk assessment, institutional investors may now be more inclined to dip their toes in Bitcoin (BTC) as it shows continued stability.
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