Research Summary
The research report discusses the current state of volatility in the crypto-asset market. The report highlights the ultra-low implied volatility of Bitcoin (BTC) and Ethereum (ETH), which is occurring simultaneously with historically low realized volatility across the crypto-asset market. The report also notes that the correlation of crypto-asset realized volatility to that of equities has been low since early May.
Actionable Insights
- Monitor the volatility of crypto-assets: The report indicates that the volatility of major coins like BTC and ETH has reached an all-time low. This trend is also observed in many smaller cap or alt-coins, as well as several benchmark indices for gold, US equities, bonds, and tech stocks.
- Consider the correlation within the crypto-asset cluster: The research shows a strong correlation within the crypto-asset cluster, but a noticeable drop in correlation when considering the realized volatility of a crypto-asset with a traditional asset such as bonds, equities, and gold.
- Pay attention to exceptions: Notable exceptions to the low volatility trend include XLM and XRP, which have shown increased volatility following the dismissal of some regulatory allegations.
