The crypto world was briefly shaken by a fake announcement of a spot Bitcoin ETF approval, which later turned out to be false. Data platform Greeks.live highlighted that the false ETF news caused high volatility in Bitcoin (BTC), but the impact on Bitcoin’s momentum was limited. They noted that the Implied Volatility (IV) did not increase but instead decreased until the news was debunked.
Greeks.live analyzed the market’s reaction to the false spot Bitcoin ETF approval, noting that the fake news from the SEC caused high volatility in BTC. However, the Implied Volatility (IV) dropped, contrary to expectations. The data suggested an unusual situation, as the ETF had been priced in for over a month, and many investors had already invested in this narrative, possibly reaching a peak in short-term IV.
The fake ETF approval news revealed that most investors believed the ETF’s push effect on Bitcoin was limited, and it had exhausted the already fragile power of the narrative. Many investors had prematurely executed leveraged and position reduction operations.
Greeks.live pointed out the difference between Realized Volatility (RV) and Implied Volatility (IV), two measures of volatility used in both traditional finance and crypto markets. RV is based on past price movements and reflects actual market conditions, while IV is derived from option prices and indicates market expectations of future price movements.
Both RV and IV play crucial roles in risk management and pricing in markets. RV represents past performance, and IV represents future uncertainty, providing insights for market participants.