Bitcoin's market got calmer in 2025 thanks to yield-hungry institutional investors
Bitcoin's implied volatility decreased in 2025 as institutions sold covered calls to generate yield on their holdings.Summary
The Bitcoin market experienced a significant calming throughout 2025, evidenced by a steady decline in annualized 30-day implied volatility metrics like Volmex's BVIV and Deribit's DVOL, which fell from around 70% to near 45%. This reduction in volatility is attributed to institutional investors, who hold substantial amounts of BTC or spot Bitcoin ETFs, actively selling out-of-the-money call options to harvest premium yield from their idle assets. This practice, known as covered call selling, created a consistent supply pressure on implied volatility. Furthermore, institutional adoption has shifted the options market structure, moving the skew from bullish call premiums to bearish put premiums, indicating that sophisticated, hedged long positions are now dominant, mirroring behavior seen in traditional markets.
(Source：CoinDesk)